Apple And Epic Continue Antitrust Battle Over App Store Policies

Apple and Fortnite developer Epic Games are both asking a federal appeals court to reconsider its recent mixed ruling in a long-running antitrust fight over Apple's restrictive app store policies.

The appellate ruling -- issued in April by a panel of the 9th Circuit Court of Appeals -- cleared Apple of antitrust violations, but found that the company's anti-steering restriction, which prohibited developers from offering in-app links to outside payment platforms, violated California's unfair competition law.

Now, both companies are seeking a new hearing in front of a majority of the 9th Circuit's judges.

The businesses' moves mark the latest development in a battle dating to the summer of 2020, when Epic first offered gamers a way to make purchases directly, in violation of an Apple policy requiring developers to use its payment platform for in-app purchases.

Apple responded by removing Fortnite from the iOS app store -- a move that prompted Epic to sue Apple for allegedly monopolizing the iOS app distribution market, and unlawfully forcing developers to use Apple's payment platform.

Apple takes a commission of up to 30% of purchases made through its platform.

U.S. District Court Judge Yvonne Gonzalez Rogers in the Northern District of California issued a mixed ruling after conducting a 16-day trial at which Apple CEO Tim Cook testified that Apple's policies boost privacy and security for iPhone and iPad users.

Rogers ruled that Epic failed to prove that Apple's app-store policies violated antitrust law. But she also said Apple's anti-steering policy violated California's unfair competition law, and ordered Apple to let developers add in-app links to non-Apple payment options.

Both companies appealed to the 9th Circuit, which upheld Rogers' decision in April.

“Epic failed to establish ... the existence of any substantially less restrictive alternative means for Apple to accomplish the pro competitive justifications supporting iOS’s walled garden ecosystem,” Circuit Judge Milan Smith wrote in an opinion joined by District Court Judge Michael McShane.

The panel also agreed with Rogers that Apple violated California's unfair competition law, and upheld the injunction requiring it to allow in-app links to outside payment options.

Apple now says the portion of the ruling dismissing the antitrust claims is inconsistent with a finding that the company engaged in unfair competition.

“Where the same conduct is challenged under both the antitrust laws and the [unfair competition law], a determination that the conduct does not violate the antitrust laws (including in the crucible of a trial on the merits) means that the same conduct cannot be enjoined as 'unfair' on the same basis -- period,” Apple writes.

The company adds that its rules protect consumer's privacy and security.

“Even though Epic failed to prove that those rules violate the antitrust laws, Apple is now prohibited from enforcing them,” Apple argues.

For its part, Epic argues that the panel didn't properly weigh how Apple affected competition, writing that a “rigorous inquiry into the balance of pro- and anticompetitive effects” of the company's policies “would easily find in Epic’s favor.”

“Apple forces software developers offering apps and digital goods to iPhone owners to use only Apple’s own distribution and payment services,” Epic writes. “Then, Apple imposes a huge commission on every sale the developers make to Apple’s 1 billion captive customers.”

The appellate court hasn't yet indicated when it will rule on the companies' requests.

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