The antitrust standoff between Epic Games and Apple continues in a US court – both sides have appealed after their case was reviewed in one of the US district courts last year. At the time, the court largely sided with Apple and failed to recognize that the company acted as a monopolist in the App Store.
This decision, of course, did not sit well with Epic Games, which required Apple to support in-app payments through third-party payment systems – this would allow the developers of the popular game Fortnite to maximize profits, suffering from the App Store’s high commission. Meanwhile, Apple is unhappy with the court’s decision to allow apps to use links to third-party payment systems for payment.
The outcome of the court hearings are very important as they determine Apple’s future in the app market and whether it has the right to set its own rules regarding payments and commissions in its marketplace.
Now the US Department of Justice and representatives from the state of California have an opportunity to speak in court – they have their own arguments in this dispute. Although the Justice Department can’t formally support either party, officials are now beginning to prepare their own antitrust lawsuit against Apple, so the court’s decision one way or the other may hurt the Department’s ability to effectively influence Apple’s future.
The Justice Department’s lawsuit raises concerns that the lower court interpreted parts of US antitrust law, the Sherman Act, too narrowly, as well as concerns about the lower court’s “misunderstanding” of the market and Apple’s monopoly position.
The appeals process also takes into account the opinions of Apple critics such as Tile, Match, Basecamp and the Coalition for App Fairness Group, as well as other technology companies such as Roblox and Microsoft, consumer organizations such as the Electronic Frontier Foundation Consumer Federation of America, etc. In addition, Epic Games was supported by Assisted 35 Attorneys General of US Territories.
Epic Games originally filed a lawsuit against Apple in 2020 after the latter banned the game Fortnite from the App Store for using a new payment mechanism that allowed it to bypass the company’s in-app purchase rules. This formed the basis of an antitrust lawsuit – the dispute looks set to last for years.
Despite the judge’s decision that Apple had not acted like a monopolist, Cupertino decided to appeal because the final decision affected the company’s right to set its own very strict rules in the App Store. The original decision said that Apple cannot prevent developers from leaving hints about the possibility of using other means of payment outside of Apple’s payment system.
Epic Games has also appealed to get permission for iOS users to use other forms of payment – including using alternative app stores and using third-party payment systems. Apple categorically opposes software downloads bypassing the App Store, linking its position with concern for user safety.
Hearings before the Ninth Circuit Court of Appeals began Monday. Epic has previously reported that the company has provided insufficient evidence on some points. According to the lawyers involved in the case, a decision can be made in about nine months.
The previous court decision was based on not violating any antitrust laws, since the clauses of the agreement proposed by developers for approval are not discussed – they can either agree to the default option or refuse to use the App Store. Similar agreements are used by other tech giants. The Justice Department has joined the hearing because it believes such a decision could be made by a lower court “materially impair the application of antitrust law outside the specific context of this proceeding”.