Apple Prohibited from Blocking Outside Payment in Epic Ruling
A judge ruled on January 10th issued a ruling in California’s Epic Games v. Apple case prohibiting Apple from blocking outside payments. Effectively, the judge has ruled that Apple cannot prohibit developers from adding links for alternative payments beyond Apple’s App Store-based monetization. The mobile giant’s control over fees on iOS has long been a debate for Epic and its in-gaming micro-transactions.
The decision is the result of a fight that’s been brewing for years between Apple and larger developers, particularly in gaming, whose businesses account for a hefty majority, 70%, the judge noted, of App Store revenue. Epic Games also sued Google and joined up with other app developers to form the Coalification for App Fairness, a group that actively lobbied for app store reform.
In recent weeks, Apple has made a few minor tweaks to its App Store rules as the result of concessions related to other lawsuits and legislation, which included a settlement with a Japanese regulator that saw the tech giant change its policies for “reader apps”– apps that provide access to purchased content — that would allow them to point users to their own website where users could sign up and manage their accounts.
Another settlement gave developers permission to use customer contact information collected inside their app to tell customers about other payment options. And in South Korea, a new law forced Apple and Google to allow developers to use their own third-party payment systems. After the passing of that law, Epic Games asked to reinstate Fortnite to the App Store in that market, but Apple rebuffed that request.
The ruling notes, “Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them (“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.”
Apple’s ongoing refusal to adapt its App Store rules to the changing environment, it has historically argued, is about consumer protections. In prior statements, allowing alternative means of in-app purchases could put users at risk of fraud and undermine their privacy, the company has said.
While today’s ruling will force Apple to now accommodate developers by allowing them the choice to include buttons or links to other places where they can pay, it still won in the sense that it was not deemed a monopoly. U.S. District Judge Yvonne Gonzalez Rogers had disagreed with how both Apple and Epic Games have framed the relevant market, saying that in digital mobile gaming transactions, Apple did not have a monopoly.