Apple Triumphs in Antitrust Battle with Fortnite Maker Epic Games

Apple antitrust battle with fortnite maker Epic Games
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Apple antitrust battle with fortnite maker Epic Games
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Photo Credit: Ibrahim Abazid

Apple wins its antitrust battle with Fortnite maker Epic Games over its App Store policies but must revise its anti-steering behavior.

According to the U.S. Ninth Circuit Court of Appeals, Apple has won its antitrust appeals court battle with Fortnite maker Epic Games over its App Store policies. The court largely upheld the district court’s earlier ruling on Epic Games’ antitrust claims in favor of Apple but also upheld the lower court’s judgment in favor of Epic per California’s Unfair Competition Law.

The game developer had hoped to prove in its appeal that Apple had acted unlawfully by restricting app distribution on iOS devices to Apple’s App Store, which required payments to go through its own processor while preventing developers from communicating to customers about alternative ways to pay — a notable thorn in the side of Spotify CEO Daniel Ek, as well.

This ruling is a significant setback for Epic Games and other developers who hoped the verdict could set a precedent for further antitrust claims and require Apple to open iOS devices to third-party app stores and payment systems. 

Initially, Epic sued Apple in 2020 after the latter removed Fortnite from the App Store for Epic’s intentional violation of the App Store’s terms over in-app purchases. Although Apple largely won that lawsuit when the judge declared the company was not acting as a monopoly, the court sided with Epic on Apple’s anti-steering policies regarding restrictions on in-app purchases. The court said Apple would no longer be able to prohibit developers from pointing users to other means of payment.

Apple and Epic appealed the ruling; Apple over the required changes to App Store policies about anti-steering, and Epic to push its antitrust case a second time.

The latest decision affirms the district court’s denial of antitrust liability and its corresponding rejection of Epic’s illegality defense to Apple’s breach of contract counter-claim. But it also noted that the district court was in error in defining the relevant antitrust market and in holding that Apple’s Developer Program Licensing Agreement (DPLA) fell outside the scope of the antitrust law called the Sherman Act.

Still, it said those errors were ultimately “harmless” and that regardless, Epic “failed to establish, as a factual matter, its proposed market definition and the existence of any substantially less restrictive alternative means for Apple to accomplish the procompetitive justifications supporting iOS’s walled-garden ecosystem.”

“Apple prevailed at the 9th Circuit Court,” tweets Epic CEO Tim Sweeney. “Though the court upheld the ruling that Apple’s restraints have ‘a substantial anticompetitive effect that harms consumers,’ they found we didn’t prove our Sherman Act case.”

“Fortunately, the court’s positive decision rejecting Apple’s anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there,” he adds in a follow-up tweet. “We’re working on next steps.”

Apple has yet to issue an appeal for the anti-steering part of the decision and will likely weigh its options before making that determination.