Apple has won its antitrust-focused appeal with Fortnite maker Epic Games over its App Store policies, according to advice released today by the U.S. Ninth Circuit Court of Appeals. The court largely affirmed the earlier district court ruling regarding Epic Games’ antitrust claims in favor of Apple, but also affirmed the lower court’s ruling in favor of Epic under California’s unfair competition law.
The mobile game maker had hoped to prove in its appeal that Apple had acted illegally by limiting the distribution of apps on iOS devices to Apple’s App Store, which required payments to be made through its own processor, while developers could not deal with customers. communicate about alternative ways to pay.
The court ruling was first reported by Bloomberg.
Apple issued the following statement:
Today’s decision reaffirms Apple’s resounding victory in this case, ruling nine out of ten claims in Apple’s favour. For the second time in two years, a federal court has ruled that Apple is in compliance with state and federal antitrust laws. The App Store continues to foster competition, drive innovation, and expand capabilities, and we’re proud of its profound contributions to both users and developers around the world. We respectfully disagree with the court’s ruling on the sole remaining claim under state law and are considering further review.
The ruling is a major setback for Epic Games and other developers who hoped the ruling could set a precedent for further antitrust claims and require Apple to open up iOS devices to third-party app stores and payment systems.
Epic originally sued Apple in 2020, after it forced Apple to remove Fortnite from the App Store after it deliberately violated the App Store Terms over in-app purchases. While Apple largely won the lawsuit when the judge ruled that Apple was not acting as a monopolist, the court sided with the Fortnite maker on Apple’s anti-steer policy regarding restrictions on in-app purchases. It said Apple would no longer be able to ban developers from directing users to other means of payment.
Both Apple and Epic appealed the ruling – Apple due to the required changes to App Store policies regarding external links and Epic to retry its antitrust suit.
In today’s decision, the appeals panel upheld the district court’s denial of antitrust liability and corresponding rejection of Epic’s illegality to Apple’s breach of contract counterclaim, the ruling said. However, it also noted that the court erred in defining the relevant antitrust market and ruling that Apple’s DPLA (Developer Program Licensing Agreement) fell outside the scope of the antitrust law known as the Sherman Act.
But it said those mistakes were ultimately “innocuous” and that in any event Epic had “failed to actually establish the proposed market definition and the existence of substantially less restrictive alternative means for Apple to challenge the pro-competitive justifications.” to support iOS’s walled garden ecosystem.”
In other words, while these types of contracts may fall within the scope of a Sherman Act claim, that was irrelevant to the court’s decision in this case.
The panel also affirmed the district court’s ruling in favor of Epic Games under California’s unfair competition law.
“The court did not clearly err in finding that Epic was injured, committed a legal error in applying California’s flexible liability standards, or abused its discretion in formulating equitable compensation,” it said. the pronounciation.
That would mean that the anti-steering changes that the court previously decided on would be necessary again.
Apple has not yet appealed this part of the decision. It will probably weigh its options before making that decision.
In another bright spot for Apple, the appeals court ruled that the court erred when it ruled that Apple was not entitled to attorney’s fees related to the DPLA breach of contract claims.
Epic Games responded to a request for comment by citing founder and CEO Tim Sweeney’s rackshared on Twitter.
“Apple prevailed in the 9th Circuit Court,” Sweeney wrote. “While the court upheld the ruling that Apple’s restrictions have ‘a substantial anti-competitive effect that harms consumers,’ they found that we had failed to prove our Sherman Act case. We took consumers to the Web to do business with them directly. We working on next steps.”
Updated on 4/23/23 at 4:35 PM et with Epic Games’ comment