Apple has prevailed in an appeals court battle, resulting in the upholding of the company’s prohibition on the sale of third-party software within its own apps.
A decision with significant implications for the increasing antitrust pressure from the courts, the White House, and Congress on the app platforms of Big Tech.
Epic’s Apple Claims Dismissed
Monday, the U.S. Court of Appeals for the 9th Circuit upheld a lower court’s dismissal of the Fortnite publisher’s claims in Apple v. Epic Games.
Epic claimed that Apple’s App Store policies violated federal law by prohibiting it from selling in-game currency directly to players instead of processing all transactions through the App Store. This decision comes several months after Apple began allowing third-party app stores by modifying its policies.
The underlying business conflict has prompted a bipartisan group of legislators to advance the Open Apps Market Act, a bill that would mandate the approval of third-party app sellers.
There is a lively and significant debate about the role that online transaction platforms with market power play in our economy and democracy.
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Apple’s In-App Purchase Policies were violated
However, as a federal court of appeals, it is not our duty to do so, and we would be unable to do so anyway. Instead, the three judges wrote, “We faithfully applied existing precedent to the facts in reaching this decision.”
In August 2020, Epic Games filed a lawsuit against Apple after the iPhone manufacturer banned Fortnite’s download because the app allows users to purchase its premium currency, V-Bucks, through the in-game interface.
Epic Games’ decision to allow in-app purchases of V-Bucks violated Apple’s App Store policies, which impose a 30% tax on all purchases.
On nine of ten counts, the lower court judge ruled in favor of Apple, stating that its policies did not violate federal antitrust law. However, the company was compelled to allow apps to display information about purchasing alternatives to the App Store.
In December, Apple engineers were working to adapt the App Store to the requirements of European regulators.
The National Telecommunications and Information Administration of the Department of Commerce issued a report in February urging the Biden administration to pass antitrust tech legislation.
In February 2022, the Senate Judiciary Committee advanced the Open App Markets Act. The bill has not been reintroduced in the current legislative session.
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