If it seems like we’ve been writing about this Epic vs. Apple Fortnite case for years, it’s because we have. The case has been raging since 2020, and finally ended (sort of) with a ruling in 2021.
The gist of it is that Apple makes developers who sell digital goods process all payments through its own in-app purchase system and payment processing, and takes a cut of up to 30%. If a vendor sells physical goods and services (like Amazon or Uber) it can use its own external payment systems. Epic Games wanted to have a button in Fortnite that allowed users to go buy the game’s “V-bucks” in-game currency on their website, avoiding Apple’s commission.
Back then, Judge Yvonne Gonzalez Rogers ruled that Apple was not a monopolist, but it did engage in anticompetitive conduct under the law and ordered the following remedy:
Apple…is hereby 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.
Apple spent years fighting the decision, appealing to the 9th Circuit Court of Appeals, which upheld it. Then to the Supreme Court, which decided not to take up the case.
Apple’s proposed solution, after several delays and evidentiary hearings (a stall tactic, the court found), was to impose a whopping 27% commission on all purchases made outside the App Store, instead of the 30% commission for using App Store payments. It would also place a set of restrictions on how apps would be allowed to communicate that these external purchase options even exist.
Apple would offer discounts to that 27% rate for some developers that participate certain other programs, like the Video Partner Program or News Partner Program.
Judge Rogers is not pleased
Apple’s compliance offer was not in keeping with the remedy imposed by the court back in 2021. In fact, one could say it’s just as bad or worse than the status quo, making it even harder to developers to simply sell their own things on their own sites without paying the so-called “Apple Tax.”
It was, in effect, a middle finger to the court, telling them that they’ll comply only under protest and in the most twisted way possible, to keep effectively charging all app developers its cut.
Judge Rogers is having none of it, writing:
It chose to defy this Court’s order and manufacture post hoc justifications for maintaining an anticompetitive revenue stream. Apple’s actions to misconstrue the Injunction continue to impede competition. This Court will not play “whack-a-mole,” nor will it tolerate further delay.
The judge concludes her document with this fierce wording:
Apple willfully chose not to comply with this Court’s Injunction. 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.
Apple is going to pay the price. The court has imposed several new rules on Apple, summed up here:
- It can impose no fees on any purchase a consumer makes outside the app, and cannot monitor, track, audit, or require developers to report such purchases.
- It can’t restrict the way developers choose to link to outside purchases; not the language, formatting, placement, flow, or anything else.
- It can’t prohibit any kind or category of app from obtaining the links necessary to make purchases outside the app.
- It can’t interfere with the link out of the app in any way other than to have a neutral message that tells users they’re leaving the App Store to an external site.
The court is not giving Apple any time to make these changes—they are to take effect immediately. And Apple doesn’t get to file for a stay: “The Court will not entertain a request for a stay given the repeated delays and severity of the conduct.”
What’s more, the Judge has referred this matter to the U.S. Attorney for the Northern District of California to investigate whether or not this constitutes a criminal contempt charge.
Fortnite is coming back in the U.S.
In response to this ruling, Tim Sweeney (CEO of Epic Games) said that Fortnite will be coming back to the App Store in the U.S. beginning “next week.”
He also offered a truce of sorts, saying, “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.”
But this has implications far beyond Fortnite. Now, any app developer that wants to sell in-app purchases on its own, outside of the App Store and Apple’s payment processing systems, can do so. They can simply put up a button or link anywhere they want and have you go to an external site to make your purchase, just as countless apps that sell physical goods and services can choose to do.
You can read the entire court order here.
