September 26, 2021

This is what’s at stake in Epic’s appeal against Apple


Last week’s ruling in Epic Games v. Apple which basically allowed app developers to direct customers away from the App Store payment platform for in-app transactions was praised and panned across the spectrum. But in the view of Epic, it did not go far enough in stopping what it alleges to be Apple’s harmful practices on its iOS app distribution monopoly. So it went on Sunday as the gaming giant filed an appeal.

The appeal, obtained by TechCrunch, draws attention to two issues.

One of them is a separate, resulting order (via The Verge) which is related to U.S. District Judge Yvonne Gonzalez Rogers’s decision where Epic, despite the injunction, would have had to pay Apple approximately $3.6 million in back commissions for a breach of contract when it had offered only its own payment platform and not Apple’s in the Fortnite app against the iPhone maker’s rules.

The other issue is Gonzalez Rogers’s interpretation of the “relevant market” in which Epic’s original allegations apply.

  • Epic argued the market to be the distribution of iOS apps and the sales within them, which Apple has a monopoly on.
  • Apple argued the market to be the overall video games market and, thus, the machinations of the App Store had little to do with the success or failure of Epic.
  • Gonzalez Rogers held that the market was “digital mobile gaming transactions” as Epic was motivated by its success on consoles to compete in the mobile sector where game revenue outpaces money made from all other app types combined.

It seems in both Apple’s and Gonzalez Rogers’s interpretation, Apple’s costs of running the App Store are justified to be passed along to app publishers as the cost of doing business. The only anti-competitive behavior Apple exhibited, it was ruled, was preventing app-using customers from being steered away to other payment platforms — this was addressed with the injunction.

Epic is hoping for the appellate court to side with its interpretation and determine not that Apple owns a monopoly, but that its rules caused harm. Having the rules tossed out would also preclude the company from having to pay Apple’s 30% commission fees from doing its payment platform stunt.

Apple told reporters that it has yet to communicate to developers on how its guidelines will change with the injunction, which is set to take effect December 9 barring a hold with Epic’s appeal. Epic had no further comment for press on its plans.

Meanwhile, the app-crafting world waits with bated breath.

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