A decision was made today in Epic Games’ popular lawsuit against Apple, with U.S. District Judge Yvonne Gonzalez Rogers ruling that Apple’s anti-executive conduct is anti-competitive and ruled in favor. of Apple in other cases.
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In a 185-page ruling, Judge Rogers said that “the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” but said the trial “showed that Apple is leading conduct anti-competitive conduct in accordance with California competition laws. ” Rogers concluded that “Apple’s anti-management provisions hide critical consumer information and illegally stifle consumer choice”:
After defining the relevant market as digital mobile gaming transactions, the Court assessed Apple’s conduct in that market. Given the background to the lawsuit, the Court cannot ultimately conclude that Apple is a monopolist under federal or state antitrust laws. While the Court finds that Apple enjoys a considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct. Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and behavior that decrease production or decrease innovation in the relevant market. The Court does not consider it impossible; only that Epic Games failed to prove that Apple is an illegal monopolist.
However, the lawsuit showed that Apple is conducting anti-competitive conduct under California competition laws. The Court concludes that Apple’s anti-management provisions hide critical consumer information and illegally drown out consumer choice. Combined with Apple’s incipient antitrust violations, these anti-management provisions are anti-competitive and a nationwide appeal is justified to remove these provisions.
Thus, Judge Rogers issued a standing court order requiring Apple to allow U.S. developers to direct customers to payment options other than the purchase system built into Apple’s application:
Apple Inc. and its officials, agents, servers, employees, and any person active or engaged with them (“Apple”) are permanently restricted and are prohibited from including (i) developers in their applications and metadata buttons, links external or other calls to action that direct customers to the purchasing mechanisms, in addition to the in-app purchase and (ii) communication with customers through contact points voluntarily obtained from customers through registration from account to application.
Apple already announced last week that in early 2022 it would allow developers of “reader” apps like Netflix, Spotify and the Amazon Kindle app to include a built-in link to their website so users can set up or manage an account. . However, if this ruling is confirmed, Apple will have to extend this bonus to all types of applications. The resolution also ensures that developers can explicitly mention alternative payment options.
The saga began in August 2020, when Apple removed Fortnite from the App Store after Epic Games introduced a direct payment option to the app, in violation of App Store rules. In an orchestrated move, Epic Games quickly filed a lawsuit against Apple, accusing Apple of having a monopoly on app sales and in-app purchases through the App Store. (See our test-related event history for more details.)
Judge Rogers ruled that Epic Games will pay damages equal to 30% of the $ 12,167,719 in revenue that Epic Games charged users of the Fortnite app on iOS using the direct payment option between August 2020 and October 2020, in addition to 30% of this Epic Games revenue collected from November 1, 2020 to the date of the trial, plus interest.
Apple is likely to appeal the decision. We have contacted the company to comment and we will update this story if we receive news.
Update: Apple has issued the following statement, as: shared by Nick Statt:
Today the Court has stated what we have always known: the App Store does not violate antitrust law. As the Court acknowledged “success is not illegal”. Apple faces stiff competition in every segment in which we do business and we believe that customers and developers choose us because our products and services are the best in the world. We are committed to ensuring that the App Store is a secure and trusted marketplace that supports a thriving community of developers and more than 2.1 million jobs in the United States and that the rules apply equally to everyone.
The judicial documents associated with the resolution are included below.