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Apple must allow other forms of in-app purchases, rules judge in Epic v. Apple

Judge Yvonne Gonzalez-Rogers issued a permanent injunction in the Epic v. Apple case on Friday morning, handing a major setback to Apple’s App Store model.

Under the new order, Apple is:

permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.

In the full ruling, Judge Gonzalez-Rogers explained her thinking on the issue in greater detail. Notably, the judge rejected both parties’ definition of the marketplace at issue in the case. “The relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store,” Gonzalez-Rogers wrote.

Under that market definition, “the court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” she continued. “Nonetheless, the trial did show that Apple is engaging in anti-competitive conduct under California’s competition laws.”

Neither Epic Games nor Apple immediately responded to a request for comment.

For years, Apple and Epic Games (which makes Fortnite) have been at odds over the transaction fee system in the iOS App Store, which Apple sees as a necessary operating cost, but Epic sees as a monopolistic tax. The fight came to a head in August 2020 when Epic installed an alternative payment system in Fortnite to circumvent the App Store’s transaction fees. Apple responded by removing Fortnite from the app store, which sparked an immediate legal complaint from Epic.

The subsequent trial was a brutal tug-of-war over the app store model and Apple’s efforts to maintain control over software on iOS. Among other things, we learned about Apple’s strange accounting methods and charm offensive to keep major players like Netflix using in-app purchases.

The ruling is likely to have significant impacts outside of Apple. Google is already facing a similar lawsuit from Epic Games over its own efforts to maintain the Google Play Store as the central source of software on Android, drawing on elaborate deals with phone manufacturers.

Developing…

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