Epic Games v Apple case: What does it mean to iPhone users

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Epic Games v Apple case: What does it mean to iPhone users

Last week, Judge Yvonne Gonzalez Rogers, of the U.S. District Court for the Northern District of California, handed down a ruling in the high-profile Epic Games v. Apple antitrust case that has the potential to bring real changes to the App Store.

All of this stems from Epic’s decision in August 2020 to place an alternative payment system within the iPhone and Android versions of its popular game, Fortnite — a move that allowed the company to ignore the 30% in-app purchase fee both Apple and Google levy. Previously, every time a player bought a new costume, weapon or dance move in Fortnite on the iPhone or iPad, Apple took 30% of the money.

The judge’s ruling is set to take effect within 90 days, unless a higher court steps in and changes things.

Both Apple and Google then booted Fortnite from their respective app stores, leading Epic Games to sue both companies for violating antitrust laws in the way they operate their app stores.

Story Highlights

  • The way you buy things inside of apps on your iPhone, like news subscriptions or a signature dance move on Fortnite, is poised to change.

  • But the decision, which pitted Cary-based Epic against the largest tech company in the world, is far from settled.

On Sunday, Epic Games asked for a higher court to review Gonzalez Rogers’ decision, filing an appeal to the United States Court of Appeals for the Ninth Circuit.

So, it might be some time before these changes end up taking effect.

Here’s what you need to know about the fallout from Epic Games v. Apple. In the 185-page judgment of Epic’s lawsuit, Gonzalez Rogers (the lawsuit was not heard by a jury) ruled that Apple no longer can block developers from communicating alternative payment options to customers outside of the App Store.

That is a change from how the App Store has operated since its inception. The iPhone maker has historically barred developers from telling customers that they can pay for in-app items, like subscriptions or virtual currency in a video game, outside of the actual app themselves. Apple did this because it takes a 30% cut — a 15% cut for some smaller developers — of all purchases made within an app, and forces developers to use Apple’s own payment system.

Gonzalez Rogers’ decision means that developers now have more leverage to tell users how to pay for things outside of the app. However, Epic’s larger point of contention — that Apple operates the App Store as an illegal monopoly — was denied by Gonzalez Rogers, who said that the video-game maker did not prove that in court.

While the way you download apps will not change, be prepared for more notifications from apps asking you to pay for things outside of the App Store. The ruling means for the first time that when you go to buy something within an app, developers can now say you don’t have to pay for it via Apple’s payment system.

WHAT DOES THE RULING MEAN FOR HOW I USE APPS? “While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct,” she said. “Success is not illegal.”