The Epic v. Apple ruling permanently stops Apple from blockading third-party purchasing

Judge says Apple engaged in 'anti-competitive conduct' but Epic didn't prove it was a 'monopolist'

    
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YOUR MONEY IS NOW OUR MONEY, AND WE WILL USE IT TO BUY DRUGS

Happy Friday, and happy one more entry in the longrunning Epic-Apple feud, as today, the judge in the Epic v. Apple lawsuit, Yvonne Gonzalez-Rogers, issued her ruling in the anti-monopoly case.

Readers will recall that Epic’s suit against Apple began in 2020 when Epic used Fortnite as a pawn in its pre-planned campaign to force platforms like Apple and Google to allow it to bypass their profitable protectionist policies that blocked third-party direct payments. The result was Fortnite banned from the platforms and an anti-monopoly lawsuit and countersuit that annoyed pretty much everyone for the last year.

In her judgment, Gonzalez-Rogers ruled in Apple’s favor on nine of 10 counts but essentially handed Epic Games the primary prize it wanted, saying that while she could not “conclude that Apple is a monopolist” under current law based on Epic’s arguments, she did agree that the company has been “engaging in anti-competitive conduct” under California competition law and “incipient antitrust violations” in defiance of “anti-steering provisions”; she further issued a permanent injunction stopping Apple from blocking third-party purchase mechanisms starting in December.

“[Apple is] permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.”

[…]

“While Apple’s conduct does not fall within the confines of traditional antitrust law, the conduct falls within the purview of an incipient antitrust violation with particular anticompetitive practices which have not been justified. Apple contractually enforces silence, in the form of anti-steering provisions, and gains a competitive advantage. Moreover, it hides information for consumer choice which is not easily remedied with money damages.”

For reference, here were the initial counts and the specific requests from Epic Games in the original lawsuit. Counts 1 through 6 were all specific to complaints under the Sherman Act, while counts 7 through 10 focused on California law. It was the count 10 that turned in Epic’s favor. The original suit specifically asked for an injunction against Apple’s anti-competitive conduct.

Apple’s response to the ruling rather disingenuously refers only to the antitrust part. Earlier today, Apple had said it wouldn’t be allowing Epic back on the platform in response to new legislation in South Korea that will similarly require platforms like Apple and Google to permit alternative IAP systems, at least until Epic agrees to “play by the same rules as everyone else.” Gonzalez-Rogers threw out Apple’s original countersuits, but she did command Epic to pay the specific backfees it owed Apple over its contract breach.

“Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers,” Epic’s Tim Sweeney tweeted. “Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.”

The whole ruling is almost 200 pages, so if you have nothing better to do with your afternoon, have fun reading it. Unfortunately, this won’t be the last time we cover the story, as the Epic v. Google suit has yet to begin, and presumably, the appeals will go on half of forever.

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JoeCreoterra

Yet Microsoft was found a monopoly through antitrust law just for including Internet Explorer as the default browser…

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John Doe

What a shame…essentially legalizing theft from Apple :(

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cursedseishi

Aaaand… shocking literally nobody who wasn’t eating up the ‘Epic WINS!’ and knew what they really wanted?

Epic has now officially filed their appeal, though it seems to be pretty much the bare minimum submitted to file for it–so nothing really juicy in it aside from the act itself.
https://www.documentcloud.org/documents/21061142-epic-games-appeal

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Adam Russell

However Apple is explicitly allowed to kick anyone from the store that they want.

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Mercy Forever

it is their store .it should be . steam can kick anyone also .so can microsoft and sony

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Bryan Correll

Ok, I’m going to try to bottom-line it as simply as possible according to my understanding:

If the ruling stands, Apple can no longer broadly prohibit alternate forms of payment for ‘microtransactions.’ That part is, on the surface, a win for epic.

BUT Apple can still require that all software for the platform be installed through their app store and has full control over whether or not any particular program is usable at all on the platform. This aspect of the ruling basically makes the other part irrelevant as they can deny access to the i-phone platform entirely to companies that do implement alternate payment forms.

Is this correct?

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Blaaznar

They can still ask for 30% even if alternate forms of payment are used.

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Brinto Sfj

Imagine Microsoft forcing developers of all kinds of software to only use Microsoft Store if they want to release their software on Windows and at the same time, disallowing users to download and install software on Windows from any and all sources other than Microsoft Store, that is what Apple is doing with IOS. Granted that IOS is for mobile devices but mobile devices are also own privately and paid for by the owners and IOS is as much an OS as Windows. Would anybody here allow Microsoft to do that? Nope, none of us would but somehow, it is fine when Apple does it. The kind of power people are giving to their mobile devices and their manufacturers won’t end well for them.

Apridise
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Apridise

This is exactly what I was thinking but perhaps I don’t understand this 30% cut, even though you can buy and install a Ps4 game without ever putting it in Sony’s store do you owe them a 30% cut still? What about on the Xbox or Switch? Does Apple require the 30% cut for any software you buy and install on a Mac? Google’s Andriod system doesn’t appear to require this as long as you use your own storefront. So is there any store and device other than an iPhone that requires a 30% cut of sales regardless of where you purchased the software? And any other device that doesn’t make it possible to buy and install software outside of its own marketplace?

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Brinto Sfj

I don’t know about the profit sharing, my main concern is how much power a device manufacturer has over a customer who has bought the device and how much power customers are forced to give to the manufacturers. Forcing customers to only buy and install software from the manufacturer storefront and forcing them to use payment methods only allowed by the manufacturers is not at all a good thing for customers in the long run.

Our smartphones should be treated like our purse and/or moneybag and/or wallet, it should be as private as those aforementioned items and we should have the same control over our smartphones as those items. That is my whole point.

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Rob Crowther

> even though you can buy and install a Ps4 game without ever putting it in Sony’s store

You can’t, Sony control physical releases too. Sony even charge developers for cross play based on how many players they have on non-Sony platforms: https://www.pcgamer.com/uk/sony-charges-for-crossplay-support-to-protect-psn-revenue-documents-show/

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Rob Crowther

Microsoft already did try it, that was what “Windows 10 S” was.

Andy McAdams
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Andy McAdams

and it came with an opt out option even if your device shipped with W10S, and was largely gimped by its own obsolescence. I don’t think they still ship devices with W10S because the whole premise “Safer, more secure, more performant” wasn’t really true – they were banking that off of the requirements to be on the Microsoft store and expecting those other things to just “happen” as opposed to any substantive changes to the OS.

Microsoft ran W10S to see if people would ‘like it’ as they try again to mimic Apple, but the demand just wasn’t there, there wasn’t enough on the Microsoft Store to make it a viable option for any but the most lightweight webusers.

Windows 10S was critically panned, was largely a failure. One can only imagine where Apple would be if they tried to pull the same crap today.

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Scorp Gang

PC is an Open Platform that Microsoft did not create. It would be impossible for them to enforce something so silly.

My Personal Opinion is it’s My Device and My Platform so I get to make the rules.

Epic Needs to do what Google and Microsoft did if they want a Mobile Storefront. Sorry. You don’t get to sell your Pizza in My Shop just because I use your brand of Cheese. If you want to start Selling Your Pizza build a Shop for your Pizza.

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KoboldWhite

Epic wanted one thing from this lawsuit and they got it, the Epic haters gleefully thinking this is an Apple win are just letting their bias run amok here. People are just so obsessed with hating Tim Sweeney that they will blindly continue to do so, even when in hurts themselves as consumers, which is just mind-boggling.

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Bruno Brito

“Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers,” Epic’s Tim Sweeney tweeted. “Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.”

Where in this, Sweeney sounds like he got what he wanted? Isn’t Epic literally appealing the decision? You don’t appeal wins.

What Epic wanted was for Apple to be forced into offering other ways of purchasing during the buying process of their store. Instead, all that Apple is forced to do now is to allow third party downloads, and Fortnite won’t even be allowed back into the Apple Store ( at least that’s my understanding ).

Not only that, according to Ark, Epic is paying the proceedings because they broke their own agreement. This was a massive blow to Epic, and no one needs to hate on Tim to see that.

As for me? It’s two mega corporations fighting each other with mud balls. There’s no good side here.

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cursedseishi

It’s been a… funny day since this broke. Lots of people shouting “Epic WON!”, few sites smartly saying ‘no, no not really’.

The only thing Epic ‘won’ here was the Judge saying its fine to allow users to pay for things outside of the app-store–and that isn’t even on Epic. That was settled a week+ ago when Apple agreed to settle with the plaintiffs of the real lawsuit surrounding the App Store. Epic didn’t earn that, the Judge was acknowledging something already settled.

And being the childish babies that they are, Epic (and Sweeney especially) wants to appeal the decision because they’re kicked off the IOS platform–and wholly for their own fault as the Judge acknowledged.

Not even for the ‘you broke the rules’ either. Epic was given the option of allowing Fortnite back onto the App Store provided they remove the ‘ToS-breaking’ update from it early on. And they stamped their foot at it and held their finger and their thumb up in the shape of an L up to their forehead. Because that is their idea of being ‘hip and cool’.
They lost their developer rights because they didn’t want to behave. And good.

Frankly… with how toxic Fortnite has been in general to their employees and harmful to all the projects they decided to drop support for to push their FOMO-fest onward? I would have loved seeing them lose their access to Apple’s dev kit entirely, and then have to pay for the resulting fallout out of pocket. And they’ve only been toxic with the lawsuit as well. Had this really been about ‘developer rights and freedoms’, they’d have not broken ToS and instead simply put their backing behind the ongoing lawsuit over the same thing and stay silent–who knows, that could have been settled much faster had that happened.

But I’ll settle with this. The judge was careful to rule in a way that didn’t set precedence the way Epic wanted, and instead formalized the settlement Apple agreed to prior as possible precedence going forward. But hey…! If Epic keeps kicking sand around? Maybe they’ll lose this and get some extra fines tacked on by the next judge?

Beef Bologna
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Beef Bologna

Honestly, the thing that they did that felt the sleeziest was weaponizing children to fight their battle.

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McGuffn

i feel bad for everyone who thought epic would win this nonsense. Suck on an apple, tim.

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Peregrine Falcon

Epic won the one primary thing that they wanted, prohibiting Apple from blocking third-party purchasing, and they lost a bunch of little things that they didn’t really care about.

(Edited by mod to remove ad hom. Come on guys chill.)

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McGuffn

I can read fine. Don’t be insulting i guess?

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Peregrine Falcon

And saying “Suck on an apple, tim” isn’t insulting?

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McGuffn

Given the way Tim Sweeney conducts himself publicly with regard to this case, no.

And the comment wasn’t necessarily directed at you, it was regarding a moderation issue i had down below which I now consider closed.

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David Goodman

It probably doesn’t help that Tim could have been a Sweeny or a Cook, even within the context :)