In a major blow to Fortnite maker Epic Games, the 9th US Court of Appeals upheld an earlier district court ruling that Apple did not violate antitrust laws by forcing app developers to use the App Store’s in-app payment system. However, Monday’s decision delivered a small win for Epic Games, as Apple was found to be violating California’s unfair competition law over its use of “anti-routing” language, which barred app developers from associating with third-party payment methods.
Epic Games’ popular video game Fortnite was kicked off the App Store in 2020 when it urged people to purchase in-game items via an external site. This violated the Apple Developer Program License Agreement. The parcel launched an antitrust lawsuit as Epic Games claimed that Apple had a monopoly on the App Store. Epic Games has launched a similar lawsuit against Google and its Play Store policies.
“Today’s decision reaffirms Apple’s resounding victory in this case, as nine out of ten claims were decided in Apple’s favor,” an Apple spokesperson said in a statement. For the second time in two years, a federal court has ruled that Apple complies with antitrust laws at both the state and federal levels.
The Apple App Store is big business. Last year, the App Store made more than $85 billion, according to a CNBC analysis. App developers are forced to use Apple’s payment system for in-app transactions, which allows Apple to charge 15% to 30% of all sales, depending on what deal the app maker has with the company.
Apple said it does not agree with the court’s ruling on California’s unfair competition law and that it is “considering further review,” though changes have already been made. With iOS 17, Apple will reportedly allow people to sideload apps, meaning people will be able to download apps outside of the App Store. It would be like downloading an app online and installing it on your MacBook. This may be to ensure compliance with European regulations that are due to come into force next year.
Throughout the court battle with Epic, Apple has largely prevailed, except for its “anti-routing” language, which barred app developers from allowing people to process transactions outside of the App Store.
When asked for comment, Epic Games referred to CEO Tim Sweeney’s tweet Acknowledging the appeals court’s decision but praising the court for rejecting Apple’s anti-directive rulings.
“Apple prevailed in the Ninth Circuit Court. Although the Court upheld the ruling that Apple’s restrictions had a ‘significant anti-competitive effect detrimental to consumers,’ they found that we did not prove the Sherman Law case,” Sweeney wrote on Twitter. “Fortunately, the court’s positive decision to reject Apple’s anti-directive rulings frees iOS developers to send consumers to the web to do business with them directly there. We are working on the next steps.”
There is still no word on when Fortnite will be allowed to return to Apple devices.