Apple’s app store power solidified by appeals court
Apple will keep its control over its app store as the sole distributor of apps on its smart devices after a courtroom win over Epic Games, the developer behind the popular Fortnite video game.
Apple’s app store power was solidified Monday when the Court of Appeals for the Ninth Circuit upheld a district court’s decision that favored Apple over developer Epic Games in an antitrust case focused on Apple’s app store rules.
In the lawsuit, Epic Games alleged thatApple’s app state rules are anticompetitive after Apple booted Epic from its app store. The developer tried to offer an alternative way for users to download its app to avoid the 15 to 30 percent commission fees from in-app purchases Apple collects.
The decision comes amid rising scrutiny over the market power of Apple and other tech giants. Ultimately, though, the court decided it was not up to them to make the call on that debate.
“There is a lively and important debate about the role played in our economy and democracy by online transaction platforms with market power. Our job as a federal Court of Appeals, however, is not to resolve that debate—nor could we even attempt to do so,” the decision stated.
Apple takes a victory lap
Apple said the decision “reaffirms” its “resounding victory in this case.”
“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 App Store continues to promote competition, drive innovation, and expand opportunity, and we’re proud of its profound contributions to both users and developers around the world,” the company said in a statement.
Apple has defended its app store rules both in court and in Congressional hearings, arguing that it helps promote security and safety for users.
Epic’s response and next steps
Although the decision was mostly a win for Apple, the court did not overturn part of the lower court’s decision that ruled in favor of Epic Games over Apple’s anti-steering laws, which keep users from learning about alternative payment methods. Apple could choose to appeal that part of the decision.
Epic Games founder and CEO Tim Sweeney tweeted that the company is working on “next steps.”
“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,” he tweeted.
“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,” he added.
In its statement, Apple said “we respectfully disagree with the court’s ruling on the one remaining claim under state law and are considering further review.”
Can Apple be forced to change?
Apple prevailed in the courtroom, but the tech giant could still be urged to change its policies through legislative change.
The bipartisan Open App Markets Act, targets dominant app stores like those run by Apple and Google. It would also add regulations limiting them from rules such as being the sole operator of the app store on its devices or collecting the commission fees.
The proposal advanced out of the House and Senate Judiciary Committees last Congress with bipartisan support, but failed to get floor votes by the end of the session.
The proposal got a boost last week by audio streaming app Spotify CEO Daniel Ek, who made a push for Congress to pass the antitrust proposal this year. However, House Republican leaders haven’t backed the antitrust reform efforts despite some GOP support, meaning the chances of passing appear to be less likely this year than last.
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