Apple declares victory following decision reached in Epic Games’ appeal

Apple CEO Tim Cook visits the Fifth Avenue Apple Store on September 16, 2022 in New York City.

Kevin Mazur Getty Images

An appeals court on Monday mostly sided with Apple on the App Store rules in its lawsuit with Epic Games.

The decision indicates that Apple’s control over the iPhone App Store and the fees it charges likely won’t change significantly as a result of an ongoing legal challenge by Epic Games.

Apple hailed it as a victory.

“Today’s decision reaffirms Apple’s resounding victory in this case, as nine out of ten claims have been decided in Apple’s favor,” an Apple spokesperson told CNBC. For the second time in two years, a federal court has ruled that Apple complies with antitrust laws at both the state and federal levels.

Apple tightly controls the App Store, which is the only way to sell iPhone apps to consumers. Apple employees check every update before it’s released and can reject entire apps. The company takes up to 30% of all digital sales within iPhone apps. Apple’s App Store remains an important source of profit for the company, contributing to Apple’s services revenue of $78.1 billion in fiscal 2022.

App and game developers have been annoyed with Apple’s App Store rules and fees for years, and Epic Games has claimed to represent not only itself, but the interests of the broader developer ecosystem by suing Apple for allegedly violating antitrust law.

Epic sued Apple after the gaming company introduced its own payment system in Fortnite, which broke Apple’s rules and eventually got the company banned from the App Store. It culminated in a multi-week trial in California in 2021 where Apple CEO Tim Cook and Epic Games CEO Tim Sweeney testified.

Monday’s ruling in the Ninth Circuit Court affirmed a decision that essentially found that Apple did not violate antitrust law by blocking competing app marketplaces for iPhones.

Apple mostly won the initial court battle, with the judge finding that it had no market monopoly.

However, Apple lost one claim and had to allow developers to place links within their apps so that users could make purchases outside of the App Store.

The appeals court did not overturn that decision, which was tied to California law, and is the only claim Apple says was not decided in its favor. Whether Apple is forced to allow external payment links will be determined in potential upcoming hearings.

In its statement, Apple said it was considering further action, which could include an appeal to the Supreme Court. Whether Epic Games will help pay Apple’s legal fees will also be determined in a lower court.

An Epic Games representative declined to comment.