Court hands Apple fresh loss in Epic App Store appeal

The 9th U.S. Circuit Court of Appeals has issued a mixed ruling on Apple’s appeal of a contempt order, delivering a “fresh loss” to Apple in some respects while at the same time granting partial relief. 

Apple was held in contempt by Judge Gonzalez Rogers who tagged its actions a “willful violation” and a “cover-up” to preserve billions in revenue. 

The federal appeals court sided with Epic Games Inc. in its long-running dispute with Apple Inc., by upholding a lower-court contempt ruling against the company  and directing a judge to decide what commission the company is allowed to charge developers on transactions that occur outside of the App Store.

Apple and Epic Games continue legal bout

In the 54-page ruling on Thursday, the 9th US Circuit Court of Appeals in San Francisco found Apple guilty of violating a lower court’s injunction by imposing a 27% fee on transactions and affirmed US District Judge Yvonne Gonzalez Rogers’ decision to hold the company in contempt. 

At the same time, the three-judge panel urged Gonzalez Rogers to reconsider what commission Apple can charge developers for use of its intellectual property.

“Apple is entitled to some compensation for the use of its intellectual property that is directly used in permitting Epic and others to consummate linked-out purchases,” the court claims.

It is the latest episode in the feud between Apple and Epic which has continued for more than five years with Epic accusing Apple of illegally blocking competition to its App Store. 

Rogers’ ruling in April accused Apple of deliberately flouting her 2021 order to allow developers to direct consumers to cheaper payment options online. Apple enjoys a 15% to 30% cut of most in-app purchases, a fact that has long angered developers and one Apple sought to protect by reducing the commission it charges by 3% from 30% for purchases made outside the App Store within seven days of clicking a link. 

Epic had complained about the new 27% commission, claiming it flouted the earlier injunction and urged the court to hold Apple in contempt which it ultimately did. Apple’s appeal argued that the new order had improperly expanded on the original injunction. 

Of course, the appeals court order rejected Apple’s arguments that the injunction should not have applied beyond Epic Games itself.

Fortnite is reinstated in the US Google Play Store 

The win against Apple comes just as Epic Games’ popular battle royale, Fortnite, secured a return to the U.S. Google Play Store following a court order.

“Fortnite is back on the Google Play Store in the U.S. following Google’s compliance with the U.S. District Court’s injunction. We’re continuing to work with Google to seek court approval of our settlement. Stay tuned for news of Fortnite’s return to Google Play to the rest of the world,” an official announcement shared via Epic’s newsroom read. 

This comes after the game maker settled its five-year legal battle with the tech giant, which stemmed from a dispute around the percentage of in-app purchase sales that app developers were required to share with the platforms. 

Apple and Google removed the game from their respective app stores in 2020 because Epic Games launched a version of the Fortnite game that routed around the existing in-app payment systems on iOS and Android devices. 

In response, Epic Games filed antitrust lawsuits against both companies.

For Apple, the court’s ruling rejected the idea that it was a monopolist but acknowledged that Apple needed to allow developers to point to other payment mechanisms if they so decided. Apple has been contesting the specific terms of that agreement, which were partially overturned by the recent appeals court ruling that called some of the restrictions “overbroad.”

Unlike Apple, Google Play Store lost its court battle with the game developer, where it was found guilty of having engaged in anticompetitive behavior, which has led to the drafting of a new agreement, which forces Google to allow app developers to point to alternative payment mechanisms and also caps the fees Google could charge.

Epic Games CEO Tim Sweeney has hailed the ruling as a “comprehensive solution” that doubles down on Android’s reputation as an open platform.

Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.