A New Ruling Against Apple Could Change the Mobile App Ecosystem Forever

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Slate 10 September, 2021 - 02:24pm 7 views

Who won the Apple vs epic lawsuit?

In her decision, Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California said she agreed with Apple's claim that Epic had violated its developer agreements, and awarded damages equal to 30% of the $12 million Epic collected from iOS users between August and October 2020, plus 30% ... CNETApple mostly wins in Epic Games Fortnite trial, but must ease payment rules

Judge rules Apple DID breach unfair competition law in Epic Games lawsuit

Daily Mail 12 September, 2021 - 01:31am

By Stacy Liberatore For Dailymail.com and Reuters

Epic Games founder Tim Sweeney is not satisfied with Judge Yvonne Gonzalez Rogers' Friday ruling and announced on Twitter that Fornite will not return to Apple's App Store until 'Epic can offer in-app payment in fair competition with Apple's in-app payment.'

The US District Court for the Northern District of California ruled that Apple cannot bar developers from providing buttons or links in their apps that direct customers to other ways to pay outside of Apple's own in-app purchase system, which charges developers commissions of up to 30 percent. 

However, the decision only supported one of Epic's request in its lawsuit against the tech giant and the gamemarker plans to appeal the court's ruling as a result, according to The Verge that received confirmation from an Epic Games spokesperson. 

Sweeney also made it clear on Twitter Friday afternoon that Epic does not see the decision as a win, specifically after Apple released its statement saying: 'Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law.'

Although the Epic CEO and founder plans to 'fight on,' users hope he can put his pride aside and let them play Fornite on iOS. 

One Twitter user by the name of 'RicXGaming' tweeted: 'Bruh, nobody cares about payment. Jesus stop being stubborn. We just want to play Fornite. 

Epic may not have been granted all of its wishes because Gonzalez Roger concluded the company failed to demonstrate Apple is an illegal monopolist, but did show the smartphone giant engaged in 'anticompetitive conduct' under California laws. 

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Epic Games founder Tim Sweeney is not satisfied with Judge Yvonne Gonzalez Rogers' Friday ruling and announced on Twitter that Fornite will not return to Apple's App Store until 'Epic can offer in-app payment in fair competition with Apple in-app payment'

Friday's decision follows a three-week trial in May, which also caused Apple shares, to drop about 2.5 percent when news of the verdict broke. 

'Once acceptable, Apple's commission rate is now questioned by some consumers and some developers, like Epic Games, as being overly burdensome and violative of competition laws. Indeed, two related lawsuits were already pending before the Court well before the commencement of this action,' she wrote as part of her ruling Friday.

'The Court is not persuaded by Epic Games' broad-brush argument that it should not be bound by certain portions of the agreement.' .

The US District Court for the Northern District of California ruled that Apple cannot bar developers from providing buttons or links in their apps that direct customers to other ways to pay outside of Apple's own in-app purchase system, which charges developers commissions of up to 30 percent 

Sweeney also made it clear on Twitter Friday afternoon that Epic does not see the decision as a win, specifically after Apple released its statement saying: 'Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law

Although the Epic CEO and founder plans to 'fight on,' users hope he can put his pride aside and let them play Fornite on iOS. One Twitter user by the name of 'RicXGaming' tweeted: 'Bruh, nobody cares about payment. Jesus stop being stubborn. We just want to play Fornite'

Friday's news follows a long legal battle between Apple and Epic, which began August 13 when the tech giant barred Fornite from its App Store 

The move, according to Apple, was due to Epic launching its own payment feature for Fortnite where users could purchase tokens directly from them and bypass Apple's in-app payment system.

Epic filed a lawsuit days after, arguing that pp distribution and in-app payments for Apple devices constitute their own distinct market for anti-competition purposes because Apple users rarely leave its 'sticky' ecosystem.

Although Gonzalez Rogers issued a nationwide order that allows developers to put into their apps 'buttons, external links, or other calls to action that direct customers to purchasing mechanisms,' the judge did not grant Epic all its wishes.

Many users are not happy with Epic Game's decision to not let Fortnite return to the App Store

One Twitter user said the court ruling should be seen as a win instead of a loss

This included forcing Apple to open the iPhone up to third-party app stores.

However, Epic did come out on top with other decisions -  Apple can no longer stop communication between developers and customers via contact information that the developers obtained when customers signed up within the app.  

The judge also issued a nationwide injunction blocking Apple 'anti-steering provisions' - rules that limit app developers from pointing users outside of Apple´s ecosystem.

Gonzalez Rogers also said these rules 'hide critical information from consumers and illegally stifle consumer choice.

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In a huge blow, judge rules Apple can't force developers to exclusively use its App Store payment system

CNN 12 September, 2021 - 01:31am

Updated 8:50 PM ET, Wed September 8, 2021

CNN's Melissa Alonso contributed to this report.

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Epic Games V. Apple: A Breakdown Of The Split Ruling

NPR 12 September, 2021 - 01:31am

A federal judge on Friday issued a long-awaited ruling in Fortnite maker Epic Games' legal battle with Apple over its App Store policies.

Both sides are using the 185-page ruling to double down on their own positions, which is possible because the details are complicated.

If anything, though, Apple and Google did land small wins, but neither got what it wanted.

U.S. District Judge Yvonne Gonzalez Rogers said Apple is breaking the law by forcing people to pay for apps and in-app items through the App Store, where it usually takes a 30% slice of the payment as commission. Gonzalez Rogers told Apple to ease up and let in other payment options, within 90 days. That will please Apple, but it is far from what Epic sought.

For Apple, Gonzalez Rogers upheld the App Store's overall structure as legal, a major victory for the tech giant. She also said Apple does not have an illegal monopoly over how developers can process payments for mobile games, which Apple applauded.

"It's a split decision," said Mark Lemley, a Stanford Law School professor who studies antitrust issues and technology. "It will improve competition on the edges, but it's not the fundamental change that Epic and advocates of the antitrust case would have hoped for."

It means that when you pay for, say, a Spotify subscription on your iPhone, or a cool new outfit for your avatar in the mobile version of Roblox, you could get the option to pay through Spotify or Roblox's own systems.

Apple long has banned app developers from offering these alternative payment methods. Gonzalez Rogers ruled that Apple was hiding information from consumers and limiting choice. That's prohibited under California competition laws.

It could. When Epic violated Apple's rules and allowed people to buy credits for Fortnite through its own system, it offered a 30% discount, since there was no Apple levy involved.

If developers are no longer forced to use Apple's payment system — and can avoid the 30% commission — they could lower their prices. Or, they could just pocket the savings.

Maybe. You might see a new button in some of your favorite apps that lets you buy things through the developer's own payment system, for example. Or, there could be a link inside the app directing customers to complete a payment on a browser. Whatever it looks like, Apple solely controlling what critics call a "toll booth" in the App Store will be no longer.

The appeals process will likely cause delays, so don't expect changes any time soon.

No, but Apple can choose to drop the rate, and for certain developers, it has.

Epic Games considered Apple's take of most purchases "exorbitant" and an abuse of its market power. The judge did not completely buy this.

Yvonne-Gonzalez was skeptical of the 30% fee during the trial, and in the ruling she was suspicious about Apple's justification of the commission, writing that "the 30% is not tied to anything in particular and can be changed," but did not order Apple to do so.

She noted that while Epic chose to target Apple (and Google) over the fee, it seemed odd considering that Nintendo's Switch, Microsoft's Xbox and Sony's PlayStation all charge a similar cut on game sales.

"Antitrust law doesn't let you complain that the prices are too high," Stanford's Lemley said. "You have to show that some sort of conduct is preventing competition."

A separate case Epic filed against Google is scheduled to go to trial this year.

Apple's App Store, and the commission that critics call the "Apple tax" are just one aspect of the tech giant's empire. But developers' complaints about feeling mistreated and getting a raw deal on the App Store have grown louder in recent years. South Korea recently banned Apple and Google from forcing developers to use its payment system. Congress has introduced legislation to rein in the tech giants' strict App Store policies.

The ruling on Friday from U.S. District Judge Yvonne Gonzalez Rogers could trigger the most consequential changes yet to the multibillion-dollar mobile economy. Although she didn't go as far as Epic Games had hoped, she still put a dent in the all-powerful fortress Apple has built and maintained over how apps are distributed on iPhones and iPads.

"Apple has so far gotten a pass in the Big Tech antitrust scrutiny of the past several years, but this says that is not going to continue," Lemley said. "Apple's control over what goes on the phone and at what price may get hard for Apple to sustain."

Apple is expected to fight Gonzalez Rogers' determination that it is violating the law by blocking alternative ways to make payments, known as an "anti-steering provision." Ever notice why Netflix makes you visit its website to sign up for a subscription in iPhones and iPads? This is why. It wanted to avoid Apple's commission.

Epic was unhappy with the judge's decision that Apple is not an illegal monopoly because it has competitors in its definition of the "relevant market" — the $100 billion world of digital gaming transactions.

In antitrust cases, the term "relevant market" is important. It's legalese for: what exact part of the economy are we talking about?

Gonzalez Rogers said this fight was not about how digital video games are distributed, as Epic had argued, but how digital video game payments are processed. And in that market, which includes gaming outside of iPhones and iPads, the judge said there's a lot of competition, so Apple is not a monopoly. Epic is expected to try to convince an appeals court that the judge got that wrong.

"An appellate court can look at the market definition and say, 'wait a minute,'" Lemley said. "And if that piece was overturned, Apple could be found to be a monopolist."

When Epic introduced its own payment system for Fortnite, breaking the App Store rules and effectively challenging Apple to kick it out, the judge ruled that it breached its contract with Apple.

During this time, Epic made more than $12 million of revenue. None of it went to Apple. So now, the judge said Epic owes Apple 30% of that amount, per the terms of its contract.

Epic turned Apple's move booting it from the App Store not just into a lawsuit, but a publicity stunt dubbed "Project Liberty" complete with the #FreeFortnite hashtag and a video mocking a famous Apple ad from 1984.

Unless revised by an appeals court, Friday's ruling means the cost of its PR crusade against Apple just got $3.6 million more expensive.

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