Apple vs. Epic Games: The Outcome and Its Ripple Effect on App Payments

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By Gaming News
19 January 2024 no comments

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Navigating the Legal Tussle: How Apple’s Latest Decision Impacts iPhone App Developers

In a recent US Supreme Court ruling, Epic Games seemingly lost its ongoing court battle against Apple, in which it alleges the iPhone manufacturer violated US antitrust laws when it removed the Fortnite developer from the iOS App Store.

Epic Games Vs Apple

The legal battle between Epic Games and Apple began in 2020 when Epic sued Apple after the iPhone maker after it was removed from the iOS App Store when it tried to circumvent the Apple payment system by offering direct billing for Fortnite on iPhone and iPad.

A week-long trial in 2021 saw Apple win the case brought on by Epic, which alleged Apple was breaking US antitrust laws by monopolizing the App Store. In that ruling, Judge Gonzalez Rogers said Apple was fully entitled to remove Epic from their app store permanently but also told developers must have the chance to offer alternative payment methods in the future.

The ruling in 2021 was a loss for both Epic and Apple. Epic Games was kicked from the iOS App Store, meaning Fortnite was removed, and they were told to pay $3.6 million, the 30% cut Apple was rightly owed from the £12.2 million Epic made in Fortnite going around the Apple payment system. But Apple also lost because the new ruling meant developers could offer alternative payment methods for their apps, resulting in a lower cut for Apple.

Epic Games and Apple appealed the decision, but the US Supreme Court dismissed both appeals. Epic Games CEO Tim Sweeney took to X to express his disappointment in the ruling, saying, “The Supreme Court denied both sides’ appeals of the Epic v. Apple antitrust case. The court battle to open iOS to competing stores and payments is lost in the United States. A sad outcome for all developers.”

Although it wasn’t the outcome Epic had hoped for, Sweeney went on to urge all developers on the iOS App Store to exercise their rights and tell their users of alternative payment methods.

The legal battles for Epic are not over, however, as Google is set to appeal their antitrust case in which Epic says it proved “Google’s app store practices are illegal and they abuse their monopoly to extract exorbitant fees, stifle competition and reduce innovation.”

As for Apple, they could be set to lose billions. The company charges developers a 30% cut for any payment on the iOS App Store but as devs can now offer alternative payment methods to their users, the company could see a significant loss on its revenue which saw it rake in $85 billion in fiscal 2023.

To sum it all up, I think Jason Schreier of Bloomberg said it in best in 2021 when he said, “So Epic lost on just about every count & will have to pay millions, while Apple now has to let apps use external payment processors, potentially costing them billions. Big win for everyone who was rooting for both companies to lose.”

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By Daniel Burrows Daniel

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