Apple declares victory after decision in Epic Games appeal

Apple CEO Tim Cook visits the Fifth Avenue Apple Store on September 16, 2022 in New York City.

Kevin Mazur | Getty Images

An appeals court on Monday mostly sided with Apple over App Store rules in a case involving Epic Games.

The decision signals that Apple’s control over the iPhone App Store and the fees it charges are unlikely to change significantly as a result of an ongoing legal challenge by Epic Games.

Apple hailed it as a victory.

“Today’s decision confirms Apple’s resounding victory in this case, with nine out of 10 claims decided in Apple’s favor,” an Apple spokesperson told CNBC. “For the second time in two years, a federal court has ruled that Apple is in compliance with state and federal antitrust laws.”

Apple tightly controls the App Store, which is the only way to sell iPhone apps to consumers. Apple employees check each update before it goes live and can reject entire apps. The company takes as much as 30% of all digital sales in iPhone apps. Apple’s App Store remains a critical source of profit for the company, contributing to Apple’s $78.1 billion in services revenue in fiscal 2022.

App and game developers have chafed under Apple’s App Store rules and fees for years, and Epic Games claimed to represent not only itself but also the interests of the wider developer ecosystem by suing Apple, claiming they violated antitrust laws.

Epic sued Apple after the game company introduced its own payment system in Fortnite, which violated Apple’s rules and eventually got the company banned from the App Store. It culminated in a multi-week trial in California in 2021 where Apple CEO Tim Cook and Epic Games CEO Tim Sweeney testified.

Monday’s ruling in the Ninth Circuit Court upheld the ruling that primarily found Apple did not violate antitrust laws by banning competing app marketplaces from iPhones.

Apple largely won the initial court battle, and the judge found that they did not monopolize any market.

However, Apple lost one requirement and had to allow developers to place links in their apps to allow users to make purchases outside of the App Store.

The appeals court did not overturn that decision, which related to California law and is the one claim that Apple says was not ruled in its favor. Whether Apple will be forced to allow links to external payments will be decided in possible upcoming hearings.

Apple said in its statement that it is considering further action, which could include an appeal to the Supreme Court. Whether Epic Games will help pay Apple’s legal fees will also be decided by a lower court.

A representative for Epic Games declined to comment.

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