Apple Forced to Allow Other Forms of In-App Purchases in Epic Games Lawsuit
Epic Games' lawsuit against Apple has resulted in a major change to the latter's App Store, as Judge Yvonne Gonzalez-Rogers issued a permanent injunction in the case Friday.
The order says Apple must allow developers to link out from their apps to alternative payment systems, thereby making it possible for developers to circumvent Apple's App Store commission. The decision is a blow against Apple, which analysts say brings in $20 billion in revenue each year, with a profit margin above 75%, per Bloomberg.
Reading through the ruling...
— Stephen Totilo (@stephentotilo) September 10, 2021
"Although Epic Games claims that it would not have a viable way of monetizing Fortnite without being able to sell in-app content, the record shows it monetizes Fortnite in nine other ways"
Judge Gonzales-Rogers' full ruling rejected both Epic and Apple's definition of the marketplace at issue in the case. "The relevant market here is digital mobile gaming transactions, not gaming generally and not Apple's own internal operating systems related to the App Store," she wrote.
Judge Gonzales-Rogers also said the trial revealed Apple as engaging in "anti-competitive conduct under California's competition laws." That decision could spell further trouble for Apple, as scrutiny around its market practices continues to grow among regulators.
Apple has recently been forced into similar setbacks internationally. A regulatory investigation in Japan led the company to allow outside signup links for "reader" apps such as Netflix and Spotify, and a subsequent law in South Korea made alternate payment systems possible — though that law's practical impact is still unclear.
The ruling wasn't a complete win for Epic Games, as Judge Gonzales-Rogers ordered it to pay damages to Apple for the breach of contract it committed by adding an alternate payment to Fortnite for iOS, which was the action that set the entire saga rolling.