Epic v. Apple: Alternative payment systems must be allowed

[BenG]

Summary:

• Apple must allow external links within apps that direct customers to (other) purchasing mechanisms
• Apple is not an illegal monopoly in mobile gaming
• Epic must pay Apple 30% of the revenue collected via Epic Direct Payment

Conclusion:

This trial highlighted that “big tech” encompasses many markets, including as relevant here, the submarket for mobile gaming transactions. This lucrative, $100 billion, market has not been fully tapped and is ripe for economic exploitation. As a major player in the wider video gaming industry, Epic Games brought this lawsuit to challenge Apple’s control over access to a considerable portion of this submarket for mobile gaming transactions. Ultimately, Epic Games overreached. As a consequence, the trial record was not as fulsome with respect to antitrust conduct in the relevant market as it could have been.

Thus, and in summary, the Court does not find that Apple is an antitrust monopolist in the submarket for mobile gaming transactions. However, it does find that Apple’s conduct in enforcing anti-steering restrictions is anticompetitive. A remedy to eliminate those provisions is appropriate. This measured remedy will increase competition, increase transparency, increase consumer choice and information while preserving Apple’s iOS ecosystem which has procompetitive justifications. Moreover, it does not require the Court to micromanage business operations which courts are not well-suited to do as the Supreme Court has appropriately recognized.

A separate judgment shall issue based on the findings of fact and conclusions of law set forth above, the Court will enter a separate permanent injunction barring the noted restraints.

For the reasons set forth herein, the Court finds in favor of Apple on all counts except with respect to violation of California’s Unfair Competition law (Count Ten) and only partially with respect to its claim for Declaratory Relief. The preliminary injunction previously ordered is terminated.

Each party shall bear its own costs. No party shall file any post-trial motions based on previously-made arguments.

https://www.documentcloud.org/documents/21060628-epic-apple-injunction

Edited September 10, 2021 by BenG

[BenG]

On 9/10/2021 at 5:05 PM, Nightwing said:

That is so BS. How is Apple not monopolizing the mobile gaming transactions market when they only allow for Apple Pay to be used? Either way it’s still a win for Epic Games

Probably because Android exists. And consumers can also buy from developers' websites.

[BenG]

I think this judge has shown common sense in her judgement.

It is a pretty decent outcome for Apple tbh. They don't need to allow alternative app stores. Of course, both parties will appeal to higher courts.

Apple will probably adjust the developer fee to absorb the revenue loss here. Maybe charge developers by tiers, based on app downloads. Maybe offer rebates for those that only offer Apple In-App Purchase system.

[BenG]

Another nugget in the ruling: Apple is permitted to terminate Epic Game's developer account due to breach of contract.

So Fortnite might not even be back

[BenG]

Looks like Epic will have to lobby Congress to allow alternative app stores now, barring any successful appeals in higher courts.

[BenG]

Further digging in the ruling shows that Apple is still entitled to the 15% to 30% commission even if developers use an alternative payment system.

[ProjectJoanne PronounsHe/Him]

What a mess 

[BenG]

Update: Apple calls ruling “resounding victory”. Epic files appeal.