Epic v. Apple: Changes in the Apple App Store to Come

Epic Games, Inc. v. Apple Inc.
Decided September 10, 2021
United States District Court for the Northern District of California
Case No. 4:20-cv-05640

As we have previously covered, Epic Games, Inc. (“Epic”) sued Apple Inc. (“Apple”) after being removed from the Apple App Store (“App Store”) for implementing its own currency for in-app purchases on the app version of its popular game, Fortnite. There is also ongoing litigation in other countries between these two parties and several involving Google and Epic on these facts.

Now, the verdict has come.

In antitrust law an extremely important definition for parties to establish is the definition of the relevant market that is affected. The court determined that both parties’ arguments as to the relevant definition of the market was wrong, and determined the market was, “digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store.”

Further the court found that Epic failed to prove Apple was an illegal monopolist. However, the court did find that Apple was engaged in anticompetitive behavior, sufficient to warrant some remedies in antitrust law.

The court issued a permanent injunction nation-wide against Apple, stopping it from blocking developers from including certain information in their apps, such as:

“…external links, or other calls to action that direct customers to purchasing mechanisms, in addition to [in-app purchases]. Nor may Apple prohibit developers from: Communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.”

This means that developers on the App Store will likely have more agency over design of purchase systems in their apps, and be less restricted in their communications with and access to consumers.

Apple, of course, did not take Epic’s allegations sitting down and issued its own counter claims against Epic. These claims included breach of contract and unjust enrichment, among others. Epic was primarily found to have breached contract, resulting in Epic having to pay damages equal to 30% of the $12,167,719 that Epic collected from users off of the Fortnite app on the App Store through Epic Direct Payment between August and October 2020, plus 30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgement. There was also a declaratory judgement that Apple’s termination of contract with Epic was lawful.

Though this verdict marks an initial resolution of the issues in this case, it seems inevitable that the case is not over.  Apple and Epic both indicated an intent to appeal, and on September 12, Epic submitted a Notice of Appeal. We will provide relevant updates in the future. In the meantime, please check back here for more posts concerning video game law!