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Epic Files Appeal After Loss to Apple in App Store Case

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·2 min read
Epic Files Appeal After Loss to Apple in App Store Case
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(Bloomberg) -- Epic Games Inc. filed a notice of appeal Sunday following a judge’s decision in its antitrust lawsuit against Apple Inc.

U.S. District Judge Yvonne Gonzalez Rogers mostly sided with Apple, rejecting Epic’s claims that the iPhone maker is a monopoly. She also didn’t rule that Apple needs to restore Fortnite, Epic’s hit game at the center of the lawsuit, to the App Store or Epic’s Apple developer account. She also rejected the need for third-party App Stores and didn’t force Apple to lower its App Store revenue cut of 15% to 30%.

The judge, however, said that Apple has engaged in some anticompetitive conduct and she ordered the Cupertino, California-based technology giant to allow all app and game developers to steer consumers to outside payment methods on the web. All developers for the first time could be able to include a button in their apps to let users pay for transactions online, circumventing Apple’s fees.

Read: Apple’s App Store Grip Loosened as Judge Raps Pricing Power

She also ordered Epic to pay at least $4 million in damages to Apple for breach of contract, which included collecting payments outside of Apple’s in-app-purchase system.

While her decision could take a potentially big bite out of the profitability of the App Store -- estimated at more than $20 billion a year with a profit margin above 75% -- she didn’t go as far as Epic had sought.

Still, the evidence outlined in the three-week Epic trial in Oakland, California, cast a harsh light on tech’s power and will help build the larger case against Apple and other technology giants including Alphabet Inc., Amazon.com Inc. and Facebook Inc.

Apple called Friday’s ruling a vindication. An Epic representative confirmed the filing and declined further comment.

Why App Store Fees Are Drawing Fire Worldwide: QuickTake

Epic sued Apple in August 2020, after the iPhone-maker removed the Fortnite game from its App Store because the gaming company created a workaround to paying a 30% fee on customers’ in-app purchases. Epic wasn’t seeking monetary damages, but sought a court order to stop what it called Apple’s “illegal restraints” on competition.

This case is part of Epic’s global campaign against the world’s most valuable company. Epic, which took in more than $5 billion from Fortnite last year, also has filed complaints against Apple in the European Union, U.K. and Australia, and the game maker is suing Google over its Google Play store.

The case is Epic Games Inc. v. Apple Inc., 20-cv-05640, U.S. District Court, Northern District of California (San Francisco).

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