The Epic / Apple Lawsuit: Both Sides Win and Lose

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The Epic / Apple Lawsuit: Both Sides Win and Lose

On Friday, Sept. 10, Epic Games v. Apple, a lawsuit filed in August 2020 and argued in May of 2021, finally reached its conclusion, and no one is happy except for those of us that wanted to see everyone mad. At least, that’s one conclusion that can be drawn when the bigger of two multinational conglomerates wins most of a lawsuit, but has to start letting the other party keep more of the consumer money they generate by selling skins in a free-to-play battle royale game.

Tom Krisher of the AP confirms that Epic Games is appealing Judge Yvonne Gonzalez Rogers’s 185-page ruling in the U.S. District Court for Northern California, where she found in favor of Apple on nine of 10 counts. Adi Robertson at The Verge writes that Judge Gonzalez Rogers decided that, while Epic claimed Apple’s income extraction in the iOS app ecosystem was a monopoly, and Apple disputed that by claiming Fornite’s market of competition was digital gaming beyond just the App Store, the actual question of the case was over “digital mobile gaming transactions.”

Krisher wrote yesterday that the final ruling in Epic’s favor does stand to “chip away at the so-called ‘walled garden’” Apple has built to keep money for third-party applications on its first-party software coming through its hands. The judge concluded that Apple isn’t a monopolist and that the multibillion dollar corporation doesn’t have to let competitors open full stores for apps on Apple hardware.

Judge Gonzales Rogers also said that Apple was acting noncompetitively according to California state law, and that companies with apps on the App Store should be allowed to link to their own merchant portals. Isaiah Colbert reports for Kotaku that Epic’s big win here is that companies won’t have to let Apple wet their beak. However, that seems contingent. As I’m not a legal scholar, I’m very confused as to what is preventing Apple from just removing any app that attempts to actually do this, like they did with Epic’s cash cow, Fortnite.

The opening salvo in this legal battle happened last summer when Epic started routing Fortnite players to their own portal to make purchases of their digital currency, V-Bucks, which are used, as aforementioned, to buy things like character and weapon skins. This circumvented Apple’s policy of extracting 15% to 30% of revenue on all App Store purchases, so Apple removed Fortnite from the store. Judge Gonzazlez Rogers’s ruling does not require Apple to allow Fortnite back on the App Store. I guess that exclusion is grandfathered in? My attorney and law student friends tell me that it’s because Epic breached the contract that already existed.

Regardless, starting in 2022, Apple won’t be able to limit developers and publishers linking to external payment portals through their applications. In order for Fortnite to come back to the App Store, Epic will have to renegotiate their contract, or hope they win some appeals.