Apple emerged mostly victorious in its legal battle with Epic Games over App Store rules as an appeals court ruled in its favor on Monday. The decision suggests that Apple’s control over the App Store and the fees it charges developers are unlikely to change significantly. Apple’s strict control over the App Store is critical as it is the only way to sell iPhone apps, and the company takes up to 30% of all digital sales inside iPhone apps. The App Store remains a significant source of profit for Apple, contributing to $78.1 billion in services revenue in fiscal 2022.
Epic Games lawsuit and court ruling
Epic Games sued Apple after introducing its own payment system into Fortnite, which broke the App Store rules and led to Epic Games being banned from the App Store. Epic Games claimed that Apple violated antitrust laws by dominating the App Store and charging excessive fees. The multiple-week trial culminated in a California court in 2021, with both Apple CEO Tim Cook and Epic Games CEO Tim Sweeney testifying.
The Ninth Circuit Court’s ruling affirmed the decision that primarily found Apple did not violate antitrust law by banning competing app marketplaces on iPhones. Although Apple mostly won the initial court battle, it lost one claim and had to allow developers to place links inside their apps so users could make purchases outside the App Store. The appeals court did not reverse that decision, which was related to California law, and is the one claim that Apple says was not decided in its favor.
Apple considers further action, including an appeal to the Supreme Court, as it believes the ruling is a victory for the company. Meanwhile, Epic Games declined to comment on the matter. The final decision on whether Apple is forced to allow links to outside payments will be determined in possible forthcoming hearings. Additionally, whether Epic Games will help pay Apple’s legal fees will also be decided at a lower court.
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