Apple wins antitrust court battle with Epic Games, appeals court rules
Apple has won its antitrust-focused appeals court battle with Fortnite maker Epic Games over its App Store policies, according to the opinion issued today by the Ninth Court of Appeals United States circuit. The court upheld the district court’s earlier ruling regarding Epic Games’ Sherman Act antitrust claims in favor of Apple, but also upheld the lower court’s judgment in favor of Epic under California competition law unfair.
The mobile game maker had hoped to prove in its appeal that Apple had acted unlawfully by limiting the distribution of apps on iOS devices to Apple’s App Store, which required payments to go through its own processor while preventing developers from communicating alternative payment methods to customers.
The court’s decision was first reported by Bloomberg.
Apple released the following statement:
“Today’s decision reaffirms Apple’s resounding victory in this case, with nine of the ten claims having been decided in favor of Apple. For the second time in two years, a federal court has ruled that Apple abides by state and federal antitrust laws. The App Store continues to promote competition, drive innovation, and expand opportunity, and we’re proud of its profound contributions to users and developers around the world. We respectfully disagree with the court’s decision on the only remaining claim under state law and are considering further review.
The ruling is a major setback for Epic Games and other developers who hoped the decision could set a precedent for new antitrust claims and force Apple to open iOS devices to app stores and third-party payment systems.
In the ruling, the appeals court panel upheld the district court’s denial of antitrust liability and its corresponding dismissal of Epic’s illegality defense to Apple’s counterclaim for breach of contract. However, he held that the district court erred in defining the relevant antitrust market and finding that the Developer Program Licensing Agreement (DPLA) did not fall within the scope of the antitrust law known as of Sherman Act.
But he then said those errors were “harmless” and that Epic had still “failed to establish, in fact, its market definition proposal and the existence of substantially less restrictive alternative means for Apple to complete the pro-competitive justifications supporting the iOS wall-garden ecosystem.
The panel also upheld the district court’s ruling in favor of Epic Games under California’s unfair competition law.
“The District Court did not clearly err in finding that Epic was injured, erred in law when applying California’s flexible liability standards, or abused its discretion when ‘crafting an equitable remedy,’ the decision said.
Epic Games was asked to comment.
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