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Thursday, March 23, 2023

Epic Games Loses Lawsuit Against Apple, But Dents the Walled Garden

A federal judge on Friday (10th Sept) struck down Epic’s lawsuit against Apple and gave its final verdict in favor of Apple on all accounts. While the loss from dealt a serious blow to Epic Games, the final verdict also instructed Apple to loosen its grip on payment methods on its store.

Back in August 2020, Epic filed a lawsuit against Apple after the tech giant removed Fortnite from its Store for violating store policy by including 3rd party payment system in its app. The inclusion of a direct payment method reduced the price of V-bucks by 20% making it the most prominent method of payment. As a response to this Apple removed Fortnite from the Apple Store and also removed Epic’s developer account. 

In retaliation, Epic sought a legal route to end “Apple’s anti-competitive restrictions on mobile device marketplace.” and launched a hashtag ‘#FreeFortnite’ calling out its player base to take action against “Big Tech”. They also released a short clip on YouTube mocking Apple using Apple’s own old Advertisement.

But all of this was nearly 12 months ago and the final verdict of the Epic Vs Apple lawsuit is finally here and it’s Epic’s loss. While Apple won the lawsuit on all accounts, the Californian judge said Apple violated California’s laws against unfair competition by barring app developers from directing customers to other ways to pay for their services and ordered Apple to start letting developers include links in their apps to other payment methods within 90 days. This is a big win for other app developers as they can get even more revenue from sales and bypass Apple’s 15-30% cut. 

The judge also said that Epic Games had overreached and Apple’s behavior was not monopolistic and the antitrust law doesn’t apply here. The verdict re-iterated the Oct 2020 verdict against Fortnite removal and said Epic had breached its contract with Apple when it allowed Fortnite users to pay it directly and thus removal of the app from the App Store is justified. 

Tim Sweeney, Epic’s chief executive, on Twitter expressed that he was not satisfied with the ruling and will fight on for “fair competition”.

“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.” 

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