Epic wins legal victory over Apple

Apple required to make immediate changes to App Store policies after court loss to Fortnite developer Epic

Epic has won its long-running legal battle with Apple over Apple’s demands for commission payments for purchases related to App Store downloads, but paid for outside of Apple’s “walled garden”.

The legal judgement by Judge Yvonne Gonzalez Rogers this week compels Apple to make immediate changes to its App Store policies, with Epic’s popular Fortnite game returning to the Apple App Store next week as a result. It comes after Apple appealed against an injunction granted to Epic in 2021 and brings the legal dispute to a close after almost five years.

In her summing up, Judge Gonzalez Rogers did not hold back, even accusing Alex Roman, Apple’s vice president of finance, of lying under oath.

“This is an injunction, not a negotiation. There are no do-overs once a party wilfully disregards a court order. Time is of the essence. The court will not tolerate further delays.

“As previously ordered, Apple will not impede competition. The court enjoins Apple from implementing its new anti-competitive acts to avoid compliance with the injunction. Effective immediately, Apple will no longer impede developers’ ability to communicate with users nor will they levy or impose a new commission on off-app purchases,” she wrote.

The US District Court of Northern California found that Apple’s 30% commission was anti-competitive and its 27% commission on off-app purchases – purchases related to an app made outside of the app, such as the developer’s website – was solely to “maintain its anti-competitive revenue stream”.

Unlike PC app stores, like Steam, which charge a similar commission, users of Apple smartphones and tablets have no choice but to download and run apps from the Apple App Store. The company had devised rules over in-app purchases in a bid to prevent free-to-use apps and games from circumventing its App Store commission structure.

Internal Apple documents disclosed to the court indicate that Phillip Schiller, currently an Apple Fellow, but previously senior vice president of worldwide product marketing at the company, had urged CEO Tim Cook to accept the 2021 injunction. Instead, Cook was convinced by the arguments of chief financial officer Luca Maestri to resist.

In March 2024 Apple went as far as to terminate Epic Games’ developer account citing contractual rights allowing termination at its sole discretion.

The 80-page judgement also went into details to prevent Apple from stymieing or defying the spirit of the judgement. For example, it prevents Apple from demanding details of off-app revenues from developers, or interfering with buttons taking users to sites outside iOS to make payments that might otherwise be made in-app – apart from a neutral warning that the link is taking the user to a third-party site.

The conflict between the two companies dates back to 2020 when Epic Games accused Apple of monopolistic practices, particularly its hefty commissions on in-app purchases. With Fortnite a free-to-play game, Epic makes money from in-game purchases, such as “skins” and “battle passes”.