In 2020, Epic Games (the Fortnite maker) dragged Apple (the iPhone maker) to court in an antitrust case. At the end of the hearing in 2021, U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple cannot stop developers from including payment buttons and links in their apps that take consumers outside the App Store. That ruling could affect the sales commission paid to Apple.
Trouble started when Epic Games questioned the fees Apple imposed on developers on in-app payments. Consequently, Epic Games sought an injunction to stop the practice and was not necessarily seeking monetary damages. Although Rogers ruled against most of the claims brought forward by Epic Games, she issued the order that Apple wants to contest at the Supreme Court.
Apple disclosed its plans to head to the Supreme Court to try and upturn the ruling by Rogers on Monday, July 3, 2023. In a court filing by Apple at the 9th U.S. Court of Appeals, said it will ask the Supreme Court justices to appeal the 2021 ruling by Rogers.
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“Apple Inc. respectfully requests that this Court stay the mandate pending the resolution of a petition for a writ of certiorari that Apple intends to file in the Supreme Court,” the part of the court filing.
The iPhone maker argued that if the stay of execution is not granted, “Apple will be required to change its business model to comply with the injunction before the judicial review has been completed”.
Also, the iPhone maker claims that there was clear evidence “that the injunction will limit Apple’s ability to protect users from fraud, scams, malware, spyware, and objectionable content”.
Epic Games can also challenge a key part of the 2021 ruling that favored Apple
Epic Games also filed an appeal to the 9th Circuit challenging key parts of Judge Rogers’ ruling that favored Apple. In April, the 9th Circuit upheld most of Roger’s decision and on Friday, June 30, the 9th Circuit rejected petitions brought forward by Epic and Apple urging the court to revisit its April decision.
In the appeal to the 9th Circuit, Epic sought to revive the antitrust claims against Apple bothering on its payment services and restrictive app distribution.
“Apple forces software developers offering apps and digital goods to iPhone owners to use only Apple’s own distribution and payment services,” Epic wrote in its appeal. “Then, Apple imposes a huge commission on every sale the developers make to Apple’s 1 billion captive customers.”
Apple is likely pushing forward with the case because a win for Epic Games may inspire other developers to launch an even stronger protest in the future. This was also the view expressed by Sam Weinstein, a professor of antitrust law at Cardozo School of Law.
Epic Games is fighting for developers and gamers
Epic Game’s legal battle with Apple is likely going to be a long one. However, a positive outcome in their favor will benefit developers and gamers alike. Platforms like Apple Store, PlayStation Store and so on will not exist if not for the developers that spend their time creating games that players would love.
Sadly, these platforms rip off developers by charging as high as 30% commission for developers to sell their games through the platforms. From Apple Store to PlayStation Store, and Xbox digital store, developers pay 30% to the platform on every sale—which is definitely a lot.
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Epic Game Store wants to break the monopoly and allow developers to keep more of their hard-earned money by charging a 12% commission. Independent platform itch.io has a default 10% but allows developers to tweak it if they wish.
The 30% commission is the reason why digital copies of games are often more expensive compared to physical copies, notwithstanding the associated cost of making and shipping physical copies. A win for Epic Games may spur other developers across other platforms to challenge the 30% commission.
Do you think It is OK for platforms to charge developers 30% on all their sales and in-game purchases? Share your thoughts in the comment box below.
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