Apple must allow other forms of in-app purchases, rules judge in Epic v. Apple

Friday's Epic v. Apple case was decided by Judge Yvonne Gonzalez Rogers. This injunction is a significant setback for Apples App Store model. It also brings an end to months of bitter legal jousting.
Apple will be:

Permanently restrained and enjoined to prohibit developers from including their metadata buttons, links to external sources, or any other calls of action that direct customers towards purchasing mechanisms. In-App Purchasing is also available. Customers can communicate with each other through points of contact through their accounts within the app.

Shortly, iOS apps must allow users to access payment options other than those offered by Apple. Unless an order is made by a higher court, the injunction will take effect in 90-days.

The court also ruled that Epic Games violated its contract with Apple by implementing an alternative payment system for Fortnite. Epic Games must pay Apple 30% of the revenue it has collected from the Fortnite app since its implementation, a sum that exceeds $3.5 million.

Judge Gonzalez-Rogers explains her views on the matter in more detail in the full ruling. The judge rejected the definitions of both the market and the parties in this case. Gonzalez-Rogers stated that the relevant market is digital mobile gaming transactions and not gaming in general, nor Apple's internal operating systems related with the App Store.

She continued that the market definition does not allow the court to conclude that Apple is a state or federal monopolist. The trial showed that Apple was engaging in anti-competitive conduct as per California's competition laws.

Apple declared the ruling a victory for its App Store model when Apple was reached for comment. The Court today confirmed what we knew all along: that the App Store isn't in violation of antitrust laws, a representative stated. Apple is constantly under pressure in all segments where we do business. We believe that our products and services are world-class and customers and developers choose to do business with us. We will continue to work hard to ensure that the App Store remains a trusted and safe marketplace.

Epic Games did not respond immediately to a request for comment.

These new restrictions echo some existing provisional anti-steering limitations Apple has placed outside the US. After a Japanese regulatory investigation, Apple granted outside signup links to reader apps such as Spotify and Netflix on September 1. A South Korean law has opened the doors to alternative payment systems. However, the practical implications of this law are still unknown.

Apple and Epic Games have been at war for years over the iOS App Store transaction fees. Epic views them as an operating cost, while Apple considers them a tax. Epic Games installed an alternative payment method in Fortnite in August 2020 to avoid the transaction fees charged by the App Store. Epic filed a legal complaint against Apple, and Apple removed Fortnite from its app store.

The trial that followed was a fierce tug-of-war about Apple's app store model and Apples attempts to keep control of iOS software. We learned about Apple's bizarre accounting practices and charm offensive in order to keep major players such as Netflix using in-app purchase.

This ruling will have major implications beyond Apple. Epic Games is currently suing Google over similar claims. Epic Games is claiming that Google's efforts to keep the Google Play Store the main source of Android software are in violation of complex deals made with phone manufacturers.

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