Epic Games Vs. Apple

The lengthy legal battle between tech giants Apple and Epic Games over App Store policies and commissions has largely come to an end in the United States, with the Supreme Court denying requests from both companies to hear appeals. This leaves in place a prior District Court ruling that was mostly favourable to Apple’s arguments, but with one notable exception forcing Apple to change some controversial policies.

The conflict originated in August 2020 when Epic intentionally violated Apple’s App Store terms by implementing its own in-app payment system in the popular game Fortnite. This system bypassed Apple’s standard 30% fee on all purchases, prompting Apple to remove Fortnite from the App Store. Epic hit back with an antitrust lawsuit accusing Apple’s walled garden iOS ecosystem and control over app distribution as monopolistic.

The conflict originated in August 2020 when Epic intentionally violated Apple’s App Store terms by implementing its own in-app payment system in the popular game Fortnite

Over months of court proceedings, Epic failed to convince judges that Apple’s actions violated antitrust laws. A September 2021 ruling by Judge Yvonne Gonzalez Rogers sided largely with Apple, saying its commission fees and restrictive ecosystem did not constitute anti-competitive monopoly behaviour since it is a private business setting terms for its own platform.

However, Judge Rogers did agree with Epic that Apple cannot prohibit developers from including external links or alternative communication options to reach customers outside of iOS apps. This anti-steering policy was deemed illegal, and Apple was ordered to allow developers, at minimum, to inform users of other legitimate purchasing avenues.

Both companies filed appeals, briefly claiming victory while attempting to override aspects of the decision not in their favour through higher courts. But with the Supreme Court declining to hear arguments from either side this month, the case has reached its conclusion in the U.S. legal system.

Epic CEO Tim Sweeney proclaimed, “the court battle to open iOS to competing stores and payments is lost.” But Apple must now comply with letting App Store developers inform users of external payment links subject to strict guidelines about pricing and disclosures. Sweeney contends that Apple has followed these rules in bad faith, planning to take 30% commission on many external purchases while making the alternative process overly complicated. More legal challenges seem imminent.

Contrastingly, Epic recently won a resounding courtroom victory over Google’s similar Play Store commission and distribution policies. But Google plans extensive appeals there also. For Apple, changes in Europe could pose larger threats with E.U. legislation coming into effect soon that challenges gatekeepers of core platform services.

The Apple v Epic Games saga encapsulates ongoing tensions around mobile app marketplaces. Even diminished by court orders, Apple’s App Store dominance largely persists over its proprietary iOS ecosystem. Companies like Microsoft still aim to penetrate its walled garden by bringing Xbox gaming storefronts to iOS. And Epic now turns attention beyond the U.S. to continue its crusade prying open the foundations of Apple’s mobile app empire.