Apple's 'Resounding Victory' Cedes Small Win for Third-Party Payments

In a major blow to Fortnite maker Epic Games, the 9th US Circuit Court of Appeals has upheld a previous district court ruling stating that Apple didn't violate antitrust laws by forcing app developers to use the App Store's in-app payment system. The decision on Monday, however, did eke out a small win for Epic Games, as Apple was found to be in violation of California's Unfair Competition Law over its use of "anti-steering" language, which has prohibited app developers from linking out to third-party payment methods. 

Epic Games' popular video game Fortnite was kicked off the App Store in 2020 when it prompted people to buy in-game items via an external site. This violated Apple's Developer Program Licensing Agreement. The expulsion launched an antitrust lawsuit where Epic Games claimed Apple held a monopoly on the App Store. Epic Games launched a similar suit against Google and its Play Store policies.

"Today's decision reaffirms Apple's resounding victory in this case, with nine of 10 claims having been decided in Apple's favor," an Apple spokesperson said in a statement. "For the second time in two years, a federal court has ruled that Apple abides by antitrust laws at the state and federal levels."

The Apple App Store is big business. Last year, the App Store grossed more than $85 billion, according to a CNBC Analysis. App developers are forced to use Apple's payment system for in-app transactions, allowing Apple to take a 15% to 30% cut of all sales, depending on the deal an app maker has with the company. 

Apple said it disagreed with the court's ruling regarding California's Unfair Competition Law and is "considering further review," though changes are already being made. With iOS 17, Apple will reportedly allow people to sideload apps, meaning people will be able to download apps outside of the App Store. It would be the equivalent of downloading an app online and installing it on a MacBook. This could be to ensure compliance with European regulations that are set to go into effect next year. 

Throughout the court battle with Epic, Apple has largely reigned victorious, except in regards to its "anti-steering" language, which prohibited app developers from allowing people to process transactions outside of the App Store. 

When asked for comment, Epic Games pointed to a tweet by CEO Tim Sweeney acknowledging the appeals court's decision but praising the court for rejecting Apple's anti-steering provisions. 

"Apple prevailed at the 9th Circuit Court. Though the court upheld the ruling that Apple's restraints have 'a substantial anticompetitive effect that harms consumers,' they found we didn't prove our Sherman Act case," tweeted Sweeney. "Fortunately, the court's positive decision rejecting Apple's anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there. We're working on next steps."

There's still no word on when Fortnite will be allowed back on Apple devices.