Epic Wins Big in Case Against Apple

Posted on September 10, 2021 by Paul Thurrott in Apple with 104 Comments

Tim Sweeney, CEO and founder of Epic Games. Source: Travis Dove for The New York Times

Judge Yvonne Gonzalez-Rogers has handed Epic a major legal victory in its case against Apple and its illegal App Store policies: Apple can no longer require app developers to use its in-app payment system, nor can it prevent developers from communicating with their own customers.

In other words, common sense has prevailed.

“Apple are hereby permanently restrained and enjoined from prohibiting developers from (i) 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,” the ruling reads.

The ruling is only part of the Epic v. Apple legal case, but it cuts right to the heart of Apple’s abuse of its market power. Effective December 9, 2021, developers will finally be free of the onerous 15 or 30 percent fees that Apple applies to all App Store purchases, and they will finally be able to communicate to their own customers about alternative payment options from outside the App Store ecosystem. Naturally, Apple will appeal this ruling, so the obvious and correct outcome could be delayed quite some time.

The court disagrees with both companies’ definition of the impacted market, defining it as that for “digital mobile gaming transactions” and not for just gaming or for Apple’s operating systems. This market, the court found, is worth $100 billion annually, and most of that comes from games, not mobile apps.

“On a revenue basis, gaming apps account for approximately 70 percent of all App Store revenues,” the ruling explains. “This 70 percent of revenue is generated by less than 10 percent of all App Store consumers. These gaming-app consumers are primarily making in-app purchases which is the focus of Epic Games’ claims. By contrast, over 80 percent of all consumer accounts generate virtually no revenue, as 80 percent of all apps on the App Store are free.”

While Epic won big here, the ruling isn’t entirely in the game maker’s favor. The judge says that Apple, while successful, is not a monopolist based on the evidence introduced during the trial. That doesn’t mean that Apple isn’t a monopolist, the ruling concludes, only that “Epic failed in its burden to demonstrate Apple is an illegal monopolist.” And the judge found many examples of abuse on Apple’s part, including that it is in violation of California’s competition laws.

“The Court concludes that Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice,” the ruling explains. When coupled with Apple’s incipient antitrust violations, these anti-steering provisions are anticompetitive and a nationwide remedy to eliminate those provisions is warranted.”

And the judge ruled that Epic was guilty of a breach of contract with Apple by implementing an alternative payment system in the Fortnite app for iOS. Because of this, Epic must pay Apple 30 percent of the revenues it collected through its own system, or $3.5 million.

Apple, naturally, declared victory.

“Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” an Apple representative said, apparently unaware of what the ruling actually states. “Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace.”

“Today’s ruling isn’t a win for developers or for consumers,” Epic CEO Tim Sweeney tweeted in reply to Apple’s statement. “Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers.”

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Comments (104)

104 responses to “Epic Wins Big in Case Against Apple”

  1. Chris_Kez

    I remain confident that even if Apple loses the appeal to this case, they will seek to recoup as much of this revenue as they can by charging developers in some other way; and also that this will have no material impact on the cost of anything in the App Store.

    • Paul Thurrott

      They can try. But just giving developers choices in IAP solves one of the major areas of abuse.

      • cavalier_eternal

        That isn’t what the ruling was. Developers can’t offer their own IAP. They can direct customers outside of the App to make purchases. But, and this is a huge one, the judge specifically ruled that Apple could charge a commission on purchases done outside of the app. So Epic can route people to their website and sell vbucks there Apple can still charge Epic 30% on those purchases.

      • rbgaynor

        Maybe, but I believe the court said they were still entitled to a "commission or licensing fee," much like how Epic charges the monetized users of the Unreal Engine.

    • bettyblue

      It won’t change a single when it comes to the cost to consumers, since 80% of apps are free already.

      It could irk users if they have to now setup another account to pay for something they get from the App Store. I personally will not buy an app unless I can pay for it through the Apple App Store.

  2. Chris_Kez

    Reading more about this, I think it may be worth clarifying that developers are now allowed to link out to another payment system. This ruling does not compel Apple to allow an alternative in-app purchase system.

    • curtisspendlove

      Yup. It’s pretty much a version of the one that came from Japan or Korea a while back that disallows Apple from enforcing the “steering” rules (which prohibit app devs from communicating alternate payment options).

      This is good for consumers. The steering rules are lame. But this isn’t much of a victory for Epic.

    • toukale

      Yep, per usual when it comes to this site and Apple's coverage, bias got in the way.

  3. briantlewis

    Epic can pound sand. They threw their iOS users under the bus for this stunt. User hostile. Not really sure how you see this a victory for Epic as they don't get to have their own app store hosted on iOS.

  4. teamswitcher

    Misleading headline.. EPIC won nothing.. Other than the right to advertise that you can buy things outside of the iOS game. Which you could do before. Apple on the other hand, won money, as EPIC must pay Apple for breach of contract. This is why I never read this site anymore... The information is wildly inaccurate.

    • retcable

      The judge did agree with Apple that Epic had violated Apple's Developer Terms of Service Agreement as it stood at the time that Apple dumped Epic from the store. This is a significant detail and means that Apple does not have to allow Epic back onto the App Store.

    • Dan

      Yep you are correct and Pauls' entire opinion article is factually incorrect.

    • IanYates82

      You couldn't direct users to your own site before. No link, and not even any text indicating it was possible

      Now you can. That's massive.

      It's exactly what the Hey email service wanted too.

      You're in my app. I want you to pay for something. I can now link you out to my external site to pay.

      You, as a user, benefit from having more portable payments too. If you switch to Android, or open my app on a pc, then you can still link to your account on those other devices. That's definitely a plus for consumers.

      This is absolutely a win. It doesn't matter if 9 of 10 points weren't won by Epic. This is the key one they wanted. Apple being defined as a monopoly would've helped in other ways for sure, but wasn't necessary for what Epic was trying to originally do.

      • Greg Green

        Apple still gets to charge a commission if the purchase is for the apple device, whether you use the Apple Pay or not.

      • cavalier_eternal

        If this were the key one Epic wanted then they would be adding Fortnight back in the App Store, they have said they aren’t, and they wouldn’t bother with an appeal. Sweeney also said they lost. So, yeah… it’s clearly not what they wanted.

      • toukale

        Not sure this is as big of a deal as you are trying to make it out of. We have a ton of data on this, there is nothing more powerful than the power of the default combined with convenience. Those data have though us that 80% of user will use the default every time, we've seen it time after time. Let's take Apple maps for example, by all measures Google maps is better yet over 60% of iOS users use it because its the default according to comScore study with the Guardian that was from 2019. Same with just about everything in life, most will pick convenience and the default.

        Sure some users will go the extra steps but we are only talking about a few bucks here (based on historical low prices of apps or iap). I am sure Apple will lose a bit of revenue but not as much as think. Remember Android already allows more than that and Epic even took Fortnite off the playstore but came back when most users chose to use the default. Also how much does small developers will actually save if Apple starts to bill them for using external payment for things like I described? They are already only paying 15%, once you factor in the 2-3% they will pay for the external payment processing combine with whatever other fees Apple will charge, will it be worth it for them? As usual, big companies will benefits (Microsoft, Amazon, Spotify etc).

    • toukale

      This is what I leaned coming to this site, come for the Microsoft stuff (pretty good). Anything Apple related (take with a big grain of salt).

    • vladimir

      I wonder why you are still here to comment then

    • toukale

      Exactly, specially since for anyone who followed this case knew what Epic was after. Epic sued Google and got even less here than they can already enjoyed on Android. A resounding victory for Apple if you asked me, Epic got greedy and have certainly made it worst for everyone else in the future.

  5. mcgillivray

    Put yourself in a developer's shoes... what would you do now?

    1. Keep the price of your game FREE. Apple gets nothing.
    2. Install an option to pay for IAP's that Apple isn't part of. Apple gets nothing.

    How is this sustainable? Every app and game will just be Free - and to continue using it or buy IAP's you pay full price etc outside of Apple.

    So - How would Apple counteract this?

    • cavalier_eternal

      The ruling says that developers are allowed to offer their own IAP options along side Apple’s. Apple is still allowed to require developers to offer their IAP option. So they can[‘t side step Apple all together. It will be interesting to see how Apple implements this in their store rules.

    • scovious

      That's exactly what all developers should do.

      Why should Apple get another trillion dollars for collecting inflated tax rates for simple app hosting and "review"?

      • jason_e

        If you think hosting and reviewing is all that Apple (and Google) do with regards to their stores then you have a LOT to learn. What all they offer to developers is very expensive and they have the right to make money off their efforts regardless of what Paul thinks. Now I will agree that 30% seems unnecessarily high but I do not know exactly what Apple's costs are so this is just my opinion.

  6. behindmyscreen

    I mean...she split the baby. To paraphrase: "Apple did bad but is not a monopoly. Success isn't illegal but their practices with mobile game payments is"

    • Greg Green

      Only the part about not allowing outside pay options is illegal. The commission remains for in app and out of app purchases if apple chooses.

  7. toukale

    One more thing to take note of, unreal engine which the judge made Apple reinstated during this case is terminated, meaning if Apple is feeling vindictive can terminate as of today and unreal will be done on every Apple's platform (Mac/iOS). All those things points to a resounding victory for Apple. I don't see Apple appealing this result at all, they got 90% of the verdict in their favor (that's the best they could have hoped for when this started). Unlike this site bias headline in my opinion, this is a big lost for Epic anyway you look at it.

  8. pecosbob04

    “Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” an Apple representative said, apparently unaware of what the ruling actually states.

    Totally agree; someone is unaware of what the ruling actually states, but it isn't 'an Apple representative' it's Paul.

  9. markbyrn

    Epic lost big, Sweeney admitted they didn't win, Epic has to pay Apple, and Apple isn't letting them back in the App Store until they bow down & affirmatively agree to follow their rules. The one concession against Apple (which Epic wasn't looking for) was an allowance for developers to include a link to pay for in-app purchases outside the App Store. Ergo, that means a game can't use the in-app purchase system that Epic wanted and instead will have to pay to use a 3rd party payment system which they have to build into their app. Apple will lose some revenue over this but probably not anywhere close to what various journalists wish would happen. By the way, such a precedent will certainly apply to Google as well.

    • Mr_MDavis

      Several lawyers who have commented on this ruling have also pointed out that Apple could either overturn or at least reduce the scope of the injunction requiring information on outside sources for payment if they appealed it. The injunction is based on a California law not a Federal statute, which brings into question if the court can enforce the injunction outside of the state of California, as the US Constitution’s commerce clause may not allow it.

  10. curtisspendlove

    I don’t see how this is a win in any respect for Epic or other developers.

    In fact, all the other devs should be pissed at Epic and Sweeney. Why?

    • Apple is now required to allow a link out to external payment options
    • Apple can now charge 30% for all of those purchases, in addition to their 30% charge for using Apple’s payment systems
    • Apple was handed the 3.5mil (30% of their external payments due to the breach of contract)

    Why is this a problem? The judge set a precedent for Apple now forcing *all developers* using external payments to track and report that income. And Apple can now charge their standard rates (15/30/etc) for external transactions now.

    If you’re a developer, and you’ve somehow been able to skirt Apple’s 30% (using your own external payment system), try to get as many sales as you can in the next few months. I think you’ll be billed 30% of all of that soon (and be kicked off the App Store if you don’t pay it).

    • cavalier_eternal

      An additional way Epic bungled this was trying to get the 30% lowered to 0%. In her ruling the judge said Apple was entitled to a cut but she thought 30% was to high but since Epic wasn’t asking for it to be lowered she ruled on what Epic was asking for and denied it. They totally had the opportunity to fee lowered for everyone and complete blew it.

      • toukale

        Correct, if I were one of those conspiracy nuts I would say Epic is doing Apple’s bidding and has been this thing started. This verdict will empower Apple even more (thanks Epic).

  11. Brett Barbier

    It has never made sense logically that I can buy a paperback book via the Amazon iOS app, but not the Kindle version of that book. I think all non-game related digital content should be exempt from the 30% fee.

    For game related IAP content (digital fake coins, gems, V-Bucks, etc.), I'm fine with Apple taking a percentage of that stuff - the judge here defined the mobile gaming market as its own thing, and thus it can be treated differently, and most people recognize there's a difference between buying a digital copy of a comic book, movie, book, etc., vs. buying some V-Bucks for Fortnite costumes or dance moves, or gems for Bejeweled.

    I think what Apple may do is to create API's that approved/vetted payment processors can use for in-app purchases, that don't bypass iOS parental controls in terms of spending limits, and meets certain other standards (refund policies, privacy policies, etc.). Then Apple could tell developers that they can use any payment processor that is approved (including, if they're big enough, themselves, like Amazon, Netflix, etc,). Apple would then modify the rules so that only in-app game purchases are in scope for their IAP fees.

    • Hawaiianteg

      Apple has explained this over and over again, They don't require in app purchasing for apps that sell physical goods or services like amazon marketplace selling physical goods and uber or Lyft giving a you a ride because they can't verify you got the promised goods after paying where as IAP's they can verify you get what you pay for because they are the ones that deliver it to you through the App Store. You can't buy a book from the kindle app because Amazon doesn't want to pay the fee that is required for all in app digital purchases. Amazon the Middle man to book sellers doesn't want to pay the middle man apple to customers.

      • jdawgnoonan

        Yes, you are correct in what you say, but if I bought a book in the Kindle App on my phone my intention is to read it on my Kindle Oasis because I don't enjoy reading ebooks on OLED or LCD screens. If I read a book at all on my phone it will be for 5 minutes when I am waiting someplace and don't have my Kindle. Apple doesn't deliver the book to my Kindle or even to my Kindle app, Amazon does. All the Kindle App really is is a web browser in disguise. I agree that Apple has the right to do what they do, but that does not mean that it is right or good for the people who buy their devices.

        • sglewis

          Any particular reason you wouldn't use the Kindle store on your Kindle Oasis, if your intent was to read it on your Kindle Oasis?

  12. shameer_mulji

    If Epic won the case then why are they appealing the verdict?


    • Paul Thurrott

      Epic didn't win the entire case, for starters, as Apple wasn't declared a monopoly. Epic is looking for total victory here, not just the partial (but important) victory it did get.
      • markbyrn

        To quote Epic's Tom Sweeney on the verdict from his own Twitter account, "Today's ruling isn't a win for developers or for consumers"; Epic lost on everything they asked for and the concession against Apple (a link to pay outside the App Store) isn't what Epic wanted. Now that Epic has appealed, Apple can counterclaim the one ruling against them.

  13. hal9000

    If I wanted the App Store to become like the Play Store, I would have gotten an Android phone...

    But yes, a 30% cut is way too much.

    • spiderman2

      Ok let's say you have a business, but if you sell a service to a client trough the app store, they'll keep 30% of every of your user future payment... Enjoy!

  14. Hawaiianteg

    If you want to actually what really happened watch the Listen to Hoeg Law Virtual Legality on YouTube as he goes through the judgment. He nailed what actually happened because he's lawyer and understands. One of the first things he talks about is almost every news outlet got the headlines wrong. Go figure....

  15. txag

    This should be labeled “opinion”, not “news”.

  16. ringofvoid

    The value of allowing a link to external payment is all in the details. There are ways for a developer to make it super simple where clinking the "buy on my store" link automatically authenticates and makes the purchase after initial setup. If they're able to setup any kind of advantage to buying on the Dev's store "buy on Epic & get 500 Megabucks bonus" to create an advantage over using Apple, this could help them out. Otherwise, this could easily be a nothingburger other than being a precedent to be cited in future cases against Apple

  17. lvthunder

    Yay now I get to type my credit card number into my phone more often and get more junk mail. Thanks Epic.

  18. Hawaiianteg

    They didn't really lose. They have to let developers use third part payment systems. They don't have to allow external stores. They still can collect the 30% or whatever % they deem now. They are not considered a monopoly. Even Tim Sweeney said this wasn't a win. Apple overall won this hands down. And again per the judge Apple is not a Monopoly.

    • shmuelie

      The judge only said Epic failed to prove Apple is a monopoly, meaning another case could. And there's no way for them to collect anything from third-party IAP. Apple can still collect on initial purchase of an app but that's it. Is it a victory for Epic? No, since they want complete control over not just money but other things too. Is it a victory for Apple? No, since they must let third-party IAPs. Is it a victory for consumers? I'd say yes since this means things like buying books in the Kindle app or subscribing to Netflix in app will now happen.

      • Brett Barbier

        "And there's no way for them to collect anything from third-party IAP. Apple can still collect on initial purchase of an app but that's it."

        Sure they could - here's a scenario - Apple creates a set of API's to support third party IAP (like they have done for third party keyboards, third party browser content blockers, third party VPN apps, and so on). Apple sets some logical and impartial rules (they must support certain privacy features, cannot bypass parental control settings, and so on). Apple then also collects a certain percentage of each transaction (the current ruling apparently states that's fine).

      • behindmyscreen

        They could just do what they said they would do in Australia (we will figure out how to bill them)

      • Hawaiianteg

        now we have to search for our subscriptions or manage multiple payment paths or even now have to go to the individual developer to get a refund. Boy that sounds like fun.

        • wright_is

          I am hoping it allows developers to use their own service and Apple’s. The user then has the choice, cheaper direct from the developer or expensive, with peace of mind from Apple.

          • cavalier_eternal

            The ruling allows for IAP by Apple or leaving the app and paying elsewhere. There is literally no evidence that this will result in cheaper prices for customers. Epic charged the same for vbucks no matter where they were purchased. So in that case they just pocketed the 30% if you bought directly from them (they did temporarily lower the price when they added the in app purchase option to the iOS version but that was just part of their PR stunt). Also, Apple could require price parity between IAP and purchases made outside of the App. The whole idea that customers would get a reduction in price by purchasing directly from developers is wishful thinking at best.

      • Chris_Kez

        I wouldn't be so sure about Apple not collecting from 3rd party IAP. During his testimony, Tim Cook said "Also, we would have to come up with an alternate way of collecting our commission. We would then have to figure out how to track what's going on and invoice it and then chase the developers, it seems like a process that doesn't need to exist".

        • Daishi

          Honestly, attempting to bill someone to get a cut of a transaction in which you played no part just feels like another lawsuit waiting to happen.

          • Greg Green

            The app item ended up on an apple device, using the iOS to run it. If you’re charging for installing things on an apple device, apple gets 30% no matter how the charge was incurred. The ruling doesn’t change that.

          • toukale

            What are you talking about? Apple can charge for hosting, app reviews, api access, developer tools etc.. aren't developers using all those things? if the answer is yes then what's the issue? Are we going to also tell Apple they can't charge a certain amount? Because the other day I had a license electrician doing some work that only took 20 min. I had to agree to pay for a two hour minimum at $120 per hour. I thought it was excessive but I could not tell him he could not charge me as much as he did.

        • Chris_Kez

          Footnote 335 in the ruling: Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional.


          • Hawaiianteg

            Actually someone did lose in this case, us the consumer. Now we have to deal with multiple payment services for developers who don't see what's actually going on here and won't understand the ruling.

            • bettyblue

              This is the only real change for users. Epic is not going to make anything really cheaper. Maybe a tiny break (free game money) for moving your payments to their store, one time. After that it will be the same price but now the consumer has to deal with another payment system.

              This is one of the reasons I quit PC gaming and moved all of my gaming to my Xbox Series X. One store to buy and get my games from.

            • Greg Green

              But why would a developer go through the trouble of using a third party payment app when 30% still goes to apple. Wouldn’t it be easier and cheaper to keep everything in the apple world?

          • Hawaiianteg

            Exactly, something everyone seems to be missing and was the biggest sticking point. Apple lost nothing.

        • Hawaiianteg

          Exactly, Apple literally explained this in the Korean case. They will bill the developer after the fact and collect the % minus the payment processing fee. Developers did not get out of the fee like everyone keeps saying. And if the developer refuses to pay or doesn't report what they are making then they will be booted right out of the App Store.

      • Greg Green

        But apple still gets 30% of the third party iap fee. This is no win for developers. Why make an app that still gives apple 30%. Just use the apple payment and avoid making paying for a third party iap.

  19. crunchyfrog

    While I am sympathetic of what Apple is trying to achieve with a controlled environment for its users, they definitely over-stretched their reach here in many respects and forced devs to move gaming to the system browser to compensate.

    I do fear that if this does stick that the app stores from Apple and Google could become rife with fraud and garbage apps like Microsoft's app store. Not as likely but still is a concern.

  20. pecosbob04

    "Naturally, Apple will appeal this ruling, so the obvious and correct outcome could be delayed quite some time."

    Obvious and correct to whom?

    The appeal process decides whether the law was correctly applied in rendering the decision. Best to wait on the results of the appeal process before popping the corks.

    • pecosbob04

      Upon further review (after a cursory glance at the ruling): Not sure Apple will even bother to appeal. Calling it a "win" for EPIC is irrational.

      • rbgaynor

        Interestingly, Sweeney has already tweeted that Epic will appeal.

      • toukale

        Agreed, Apple will not appeal this, this the best they could have hoped for. They won 9 out of the 10 ruling, Epic has to pay them their 30% fees, they can keep fortnite off the Appstore, and as of this ruling can revoked and permanently ban unreal engine on all of Apple's platform if they want to be vindictive (I know I would, I am petty like that :).

  21. sykeward

    I'm not sure I agree with your conclusion here - this seems like a pretty big win for Apple. Epic lost on 9 of 10 counts, and the court even agreed that Epic breached their contract with Apple and ordered them to pay Apple the 30% cut they normally would have paid for iOS purchases made during the course of the trial.

    Where I do agree - and where it's being overlooked in the media generally - is that the court found that Apple actually was engaged in bad behavior all over the place but that Epic failed to present more evidence to those points, even after repeated prompting from the judge. She wrote in her ruling: "While the Court has found that evidence suggests Apple's 30% rate of commission appears inflated, and is potentially anticompetitive, Epic Games did not challenge the rate. Rather, Epic Games challenged the imposition of any commission whatsoever... Ultimately, Epic Games overreached. As a consequence, the trial record was not as fulsome with respect to antitrust conduct in the relevant market as it could have been."

    Alas, Epic got greedy. And in the process lost on almost every point and squandered a rare opportunity to subject a huge company's anti-competitive and anti-consumer behavior to scrutiny by a technically-literate judge who would have been able to issue a comprehensive, durable ruling on all this. What a shame.

    • toukale

      Of course you are right, leave it to Mr. *ias to see it as a lost for Apple. Apple is simply going to allow 3rd party payment, which is already the country rule in S Korea. Plus the details matter here, remember Android already allowed this and Epic still sued them. Epic wanted a way to place their store in Apple's store without paying rent, they got non of that (I agree with the Judge there). Apple can simply allow developer to have a link that take users to an outside payment system and place as many hurdles along the way (they don't need to make it easy and seamless). Apple can still charge/bill the developers the 30% fee (not illegal).

      Developers will get a bill which they will have to pay, if they don't, Apple will simply boot them off the Appstore. All of this sounds like a resounding victory for Apple. Like I have been saying for years, Apple maybe overcharging but they are not breaking the law as currently written. Some just don't like Apple because they are so successful because Apple is not their preferred company du jour.

      • Daishi

        Apple can still charge/bill the developers the 30% fee (not illegal).

        Developers will get a bill which they will have to pay, if they don't, Apple will simply boot them off the Appstore. 

        Not illegal? What you just described is just extortion.

        ”Give me a 30% cut of a transaction I had no part in or I’ll take your whole business away” is functionally no different to “it’s a lovely store you’ve got here. It’d be a shame if something happened to it”. It’s a protection racket.

        • cavalier_eternal

          I think I see where the disconnect is here. You see the 30% cut as being a commission on just the transaction but that isn’t what Apple is charging for. Apple licenses the use of their intellectual property ( iOS, Developer Tools …) to developers. Rather than charge a flat rate to everyone they charge a commission of 30% on revenue made by using their intellectual property. So, when you make a purchase in an App on an iPhone the developer is making money off of their use of Apple’s IP. The app uses the OS and the developer used the developer tools to make the app. Apple excludes some purchases (real world items services) from the commission but digital items and services are fair game.

          You may not like how Apple has decided to license their IP and that is totally fine. People are allowed to disagree with things but the judge in this case ruled that Apple is fully entitled to license and collect a commission on the use of the IP. It’s really not that different than how Epic handles the Unreal engine. Licensees pay a commission in the form of a percentage of all revenue a project that uses Unreal makes. So if I buy a game that uses Unreal and I use PayPal Epic gets a percentage of that transaction and it doesn’t matter that the transaction was between me, PayPal and the seller. Epic is entitled to compensation for their IP just as Apple is.

        • cavalier_eternal

          If you look at the actual ruling the judge made two points:

          1. Apple’s commission on purchases is payment for a suit of services that Apple provides developers and completely legal.
          2. Apple is entitled to that commission no matter how the purchase is made (IAP or through the developers own payment system)as the developer still benefits from Apple’s suit of services.

          You may consider that extortion and you are totally entitled to your opinion but a judge disagrees with that assessment and has ruled otherwise.

        • toukale

          No part of? Aren't developers getting their app hosted on Apple's Appstore? Aren't developers using their tools, api's, appstore reviews etc... if the answer is yes then how can your statement be true?

          • Daishi

            But those aren’t part of the transaction. By all means they can charge developers a hosting fee and a review fee etc, because those are actual fees for service. In fact that’s what they should be doing. But that’s not what we’re talking about.

            If I bought a new skin in Fortnite, using PayPal to process the payment Apple have not been involved. So they have no right to demand a cut of a transaction between that occurred between myself, Epic and PayPal. And saying that the transaction took place on an iPhone makes no difference, because I have already paid them for that and that transaction is over.

            Saying that Apple deserve a cut of every payment that happens on an iPhone whether they were involved or not is like saying the Toyota deserve a cut from ever tank of petrol I put in my car or Sony have right to a percentage of my Spotify subscription because I’m using headphones they made.

            • Greg Green

              If the out of app purchase lands on an apple device it’s using apple’s IP. There’s no extortion, it’s a fee for using the IP of apple.

            • bettyblue

              From day one Apple’s payment for services rendered to developers has been the 30% cut of transactions. This is the same for any successful app/game store.

              If developers don’t like it then don’t put your app in those stores. If enough pull out Apple, Google or Microsoft will either change their ways or lose money.

              • Daishi

                Really? If developers don’t like it they can take their mobile app elsewhere can they? Where are they going to go?

                Google have all the same policies on Android. Windows Phone’s dead. BlackBerry’s dead. Zombie Nokia just use Android.

                So there is no alternative and the only options are to give up an extortionate portion of your revenue or give up on your app entirely. And we’re all just hoping that everyone else will also give up on theirs as well in an unorganised collective effort until the duopoly cave in?

                • Hawaiianteg

                  Yes they can go pound sand. This was the standard from day one and when those developers signed the agreement they signed it explicitly knowing that was the case. Also for any app that came into the App Store complaining they don't want to pay the 30% cut because there would be no money left for themselves, that's not apples fault. You knew the business model going into it. Its not apples responsibility to adapt to other peoples business models. They can if they want and they did on a few occasions but ultimately that's not their responsibility. You know the rules before you sign up and you agree to it, if you don't like it you got android. The only reason why people are making a big deal about it is because Apple is where the $$$ is at and they know just going to android isn't going to get them more money regardless of how much market share android has.

            • toukale

              I think this is what we are going to see because if not what are we trying to say, that Apple/Google should provide all those things for free or they should run the Appstores at a lost? Some people argues this is about just payment when we all know this option was chosen because it was the easiest and convenient way for Apple/Google to get pay for those things. Anyone who argues that the Appstore only process payment and that Apple should only charge 2-3% like any other payment processing is lying and we all know it.

  22. jcbeckman

    Epic thinks they lost - they owe 30% of $12m, and aren't allowed back on the store unless Apple want to. Apple was ruled within its rights to terminate their access for violating the terms. Apple will have to end the "you can't tell anyone there are other ways to pay" BS, but won on the other points.

    • captobie

      This is the part of the ruling that has me scratching my head. Apple's practices are anti-competitive, and therefore illegal, but Epic still needs to pay up to play?

      • shameer_mulji

        Only Apple's anti-steering rules were considered anti-competitive, nothing else, even the 30% fee. That's why Epic had to pay back money that to Apple that it withheld.

      • Greg Green

        Epic knowingly and deliberately violated their contract with apple. That resulted in a real financial taking from apple. That’s usually a bad way to start a lawsuit.

      • sykeward

        The judge did allude to other conduct by Apple being anticompetitive (like the 30% commission), but Epic didn't pursue that route; they only presented evidence that bolstered their case that they should be able to have their own store so they didn't have to pay *any* commission, and it wasn't enough. The judge said so herself: "While the Court has found that evidence suggests Apple's 30% rate of commission appears inflated, and is potentially anticompetitive, Epic Games did not challenge the rate. Rather, Epic Games challenged the imposition of any commission whatsoever... Ultimately, Epic Games overreached."

        The judge also issued a separate ruling that the contract Epic signed is still valid. They have to pay Apple the 30% commission on in-app sales that they had been withholding, and crucially it appears that Apple is under no obligation to allow Epic back into the App Store. The ruling that did go against Apple will benefit other developers and ultimately their customers - this is a good thing. But I can't find anything in this ruling that could be construed as a win for Epic themselves. No wonder Tim Sweeney is so pissed.

      • IanYates82

        The ruling isn't retrospective. Epic pays due to the agreement in place at the time - Apple's 30% cut. But that agreement can't stand as-is going forward.

      • teamswitcher

        HINT: <whispering>The judge actually ruled that Apple is NOT, I repeat NOT, anti-competitive.</whispering>

    • toukale

      Exactly, Epic basically got what they already have on Android, even less from what I can tell (does not bode well for they Android case). At least on Android they can have alternative stores, not so on iOS. I don't know how anyone who knew what this case was about can say its a victory for Epic from this verdict.

  23. Chris_Kez

    One of the things I really appreciate about the App Store is being able to track and manage all of my subscriptions in one place.

    • Chris_Kez

      Also managing and approving kids' app purchases.

    • michael_goff

      If Apple were truly pro consumer, they could have a way to tie third party payment options into their subscription page on the store. But it isn't about being pro consumer, it's about tying you to their payment option.

      • Chris_Kez

        They could charge developers a small fee to tie into the system that provides subscription management, family sharing and parental approval. Wouldn't it be ironic if that fee turned out to be roughly equal to whatever amount developers shave off the price to entice users to purchase outside the app store in the first place?

    • rm

      Until you see the price for those subscriptions cheaper else where. Because a company might charge $10 in the app store, but can charge just $7 from their own store. And, the app can tell the consumer right the app that the can pay just the $7 and have it setup to recurring charges there. That is $36 a year savings on a monthly subscription. For just one app.

      • toukale

        Just like everything else in the world I expect less than 20% of the users to take advantage of this if ever (since this ruling did not find against Apple 30% fee), convenience will win most of the time. Apple can still charge those developers their 30% and if they don't pay will then be able to kick them off the store.

  24. djross95

    If Epic 'won' this suit, then why are they appealing and not Apple? Grossly misleading headline...