The San Francisco-based US Court of Appeals for the Ninth Circuit upheld the lower court’s ruling in the long-running antitrust fight between Apple and Epic Games. Most of Epic’s allegations that Apple violated federal competition law by banning alternative app stores on its devices have been dismissed.
However, the jury upheld much of the original ruling, which ruled in favor of Epic, which maintains the status quo unless further appeals move the case to a higher court. This decision therefore reaffirmed Apple’s victory giving her reason in nine of the ten points discussed.
According to Epic Games in its indictment, Apple:
- It restricted the distribution of apps to iOS devices to the App Store
- It prevented developers from informing customers about alternative payment systems within the App Store.
- It required in-app purchases on iOS devices to use its payment processing systems.
The court ruled that Apple was not violating antitrust rules on the first two pointsbut agreed that developers should be able to promote external payment systems when users make in-app purchases.
In a note sent to the media, Apple said this represents a “resounding victory”:
“For the second time in two years, a federal court has ruled that Apple complies with state and federal antitrust laws. The App Store continues to foster competition, drive innovation and expand opportunity, and we are proud of its profound contributions to both users and developers worldwide. We respectfully disagree with the court’s ruling on the only remaining claim under state law and are considering further review.”
The ruling also raised a debate about the role of online transaction platforms with market power. This is what the Court of Appeal stated in its decision:
“There is a lively and important debate about the role played by online transaction platforms with market power in our economy and democracy. Our job as a federal appeals court, however, is not to resolve that debate, let alone be able to to attempt to do so. In this decision we have faithfully adhered to pre-existing facts”​​.
The original 2021 ruling ruled that while Apple prevented users from being able to pay less for apps or in-app purchases by making external transactions, it didn’t operate the App Store as a monopoly. However, the judge confirmed that Apple will have to allow developers to be able to direct users to alternative payment systems, which would allow them to bypass the 15/30% commissions that Apple usually takes.
In late 2021, Apple got a slip on the implementations of these changes but in 2022 still began to allow some developers to make payments outside the App Store. Epic has also sued Google for similar facts. The case should be heard next November.
Following the European Union’s new antitrust laws, Apple is preparing to allow the download of apps from third-party stores as early as next year. According to Epic CEO Tim Sweeney, if and when he does, his company will be ready. Even Microsoft is already preparing its own app store.
