LogInEpic win.
After over four years of legal battles, wins, and losses, Epic Games has secured its biggest courtroom victory against Apple to date, with Judge Yvonne Gonzalez Rogers banning Apple from collecting fees on purchases made outside of App Store apps and prohibiting the company from restricting developers from directing users to external purchasing options.
As per the ruling, the Court found Apple in willful violation of its 2021 injunction, which was issued to restrain and prevent Apple's anticompetitive conduct and pricing practices. According to Judge Rogers, Apple defied the order and created post hoc justifications to preserve its anticompetitive revenue stream.
"Apple willfully chose not to comply with this Court's Injunction," the judge declared. "It did so with the express intent to create new anticompetitive barriers which would, by design and in effect, maintain a valued revenue stream; a revenue stream previously found to be anticompetitive. That it thought this Court would tolerate such insubordination was a gross miscalculation. As always, the cover-up made it worse. For this Court, there is no second bite at the apple."
"To summarize: One, after trial, the Court found that Apple's 30 percent commission 'allowed it to reap supracompetitive operating margins' and was not tied to the value of its intellectual property, and thus, was anticompetitive," reads the ruling. "Apple's response: charge a 27 percent commission (again tied to nothing) on off-app purchases, where it had previously charged nothing, and extend the commission for a period of seven days after the consumer linked-out of the app. Apple's goal: maintain its anticompetitive revenue stream.
Two, the Court had prohibited Apple from denying developers the ability to communicate with, and direct consumers to, other purchasing mechanisms. Apple's response: impose new barriers and new requirements to increase friction and increase breakage rates with full page 'scare' screens, static URLs, and generic statements. Apple's goal: to dissuade customer usage of alternative purchase opportunities and maintain its anticompetitive revenue stream.
In the end, Apple sought to maintain a revenue stream worth billions in direct defiance of this Court's Injunction."
Under the court's ruling, Apple is now prohibited from:
- Imposing any commission or any fee on purchases that consumers make outside an app.
- Restricting or conditioning developers' style, language, formatting, quantity, flow, or placement of links for purchases outside an app.
- Prohibiting or limiting the use of buttons or other calls to action, or otherwise conditioning the content, style, language, formatting, flow, or placement of these devices for purchases outside an app.
- Excluding certain categories of apps and developers from obtaining link access.
- Interfering with consumers' choice to proceed in or out of an app by using anything other than a neutral message apprising users that they are going to a third-party site.
- Restricting a developer's use of dynamic links that bring consumers to a specific product page in a logged-in state rather than to a statically defined page.
"As these are restrictions on the specific actions Apple took to violate this Court's Injunction and as they require no affirmative action on Apple's part, the injunction is effective immediately. The Court will not entertain a request for a stay given the repeated delays and severity of the conduct. Time is of the essence. Every day since January 16, 2024, the date of the Supreme Court's refusal to hear its appeal, Apple has sought to interfere with competition and maintain an anticompetitive revenue stream. This Injunction terminates the conduct."
Naturally, Apple wasn't too pleased with the court's verdict. "We strongly disagree with the decision. We will comply with the court's order and we will appeal," said Olivia Dalton, Apple's Senior Director of Corporate Communications, in a statement.
On the other hand, Epic Games CEO Tim Sweeney was thrilled with the outcome. He celebrated the victory on Twitter, announced that Fortnite would be returning to the US iOS App Store next week, and even offered a peace proposal to Apple: "If Apple extends the court's friction-free, Apple-tax-free framework worldwide, we'll return Fortnite to the App Store worldwide and drop current and future litigation on the topic."
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