A judge ruled on Friday that Apple can no longer prevent app developers from directing users to payment options outside the App Store. The decision, which came after a contentious court battle with the creator of the massively popular Fortnite video game, is a major setback for Apple, but it also represents a partial victory for the company, as the judge refrained from calling it a monopoly.
On Friday, Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California ruled that Apple had broken California’s Unfair Competition Law by forcing Fortnite and its creator Epic Games to use Apple’s payment systems on the App Store, with Apple taking a 30% commission on every in-app purchase.
She issued an injunction declaring that Apple can no longer prevent developers from including links to external payment options within their apps, such as alerting users to the option of paying for a subscription via a web browser rather than the app.
Gonzalez Rogers, on the other hand, sided with Apple on the suit’s other claims, saying she couldn’t conclude that Apple is a monopoly.
“Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” court documents read. “Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market.”
The decision, which is almost certain to be appealed, came after a months-long legal battle and has the potential to change how we use our smartphones.
Following the announcement, Apple’s stock dropped nearly 3% in midday trading on Friday. Apple framed the decision as a victory for the company in a statement and a follow-up press call, emphasizing that the court found it was not a monopolist.
“Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” Apple said in a statement. “Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world.”
Epic Games founder and CEO Tim Sweeney said the company “will fight on” in a series of tweets.
“Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers,” Sweeney tweeted, continuing: “Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.”
Epic’s decision will be appealed, according to a company spokesperson.
Last August, Apple removed Fortnite from the App Store for breaking its rules regarding in-app payments on the iPhone.
Epic Games encouraged iOS players to buy V-Bucks, the game’s digital currency, directly from Epic rather than through Apple’s in-app purchase system, in a software update to Fortnite. Epic offered a discount to those who purchased V-Bucks directly to sweeten the deal.