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(CNN Business) -
Months after a controversial court battle between the world's most valuable company and one of the world's most popular video games, a judge ordered Apple to allow developers to use external payment options, but it fell short of call the company a monopoly.
Judge Yvonne Gonzalez Rogers, of the US District Court for the Northern District of California, ruled this Friday that Apple had violated California's Unfair Competition Law by forcing Fortnite and its manufacturer Epic Games to use the systems of Apple payment in the App Store.
With this payment method, the iPhone maker gets a 30% commission on every in-app purchase in the process.
The judge issued a court order prohibiting Apple from requiring developers to use its payment system in the app.
But González Rogers sided with Apple in the other claims in the lawsuit, saying he could not conclude that the iPhone maker is a monopoly.
"Given the record of the trial, the Court cannot ultimately conclude that Apple is a monopolist under federal or state antitrust laws," the court documents read.
"Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and behaviors that decrease production or innovation in the relevant market."
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Apple banned Fortnite and is in a war for the future of the App Store.
This is what's at play
(Credit: Andrew Harrer / Bloomberg via Getty Images)
The decision, which is sure to be appealed, came after a months-long legal fight that could change the way we use our smartphones.
Shares of Apple fell nearly 3% in midday trading Friday after the decision.
"Today, the Court has affirmed what we have known all along: the App Store does not violate antitrust law," Apple said in a statement.
"Apple faces stiff competition in every segment in which we operate, and we believe that customers and developers choose us because our products and services are the best in the world."
Epic Games did not immediately respond to a request for comment.
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The Apple vs.
Epic games
The fight started last August when Apple banned Fortnite from the App Store for breaking its rules on in-app payments on the iPhone.
In a Fortnite software update, Epic encouraged iOS players to purchase the game's digital currency, known as V-Bucks, directly from Epic, rather than through Apple's in-app purchase system.
To sweeten the deal, Epic offered a discount to those who bought V-Bucks outright.
While consumers may have viewed it as a loyalty bonus, Apple viewed it as a serious violation of its contract with Epic and an attempt to undermine a key revenue stream.
The iPhone maker plucked Fortnite from the app store and Epic immediately filed what appeared to be a largely premeditated lawsuit.
In a contentious lawsuit that began in May and lasted for nearly a month, Epic argued that Apple's App Store was a monopoly because it is the only way to access hundreds of millions of iPhone users, and that Apple hurt competition by banning other stores. of applications or payment methods on your devices.
The game company stressed that it is not seeking any monetary relief from the lawsuit, but wants the judge to force Apple to relax some of those restrictions.
"Epic is only looking for changes in the future behavior of Apple," the company's CEO, Tim Sweeney, said at the booth.
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Apple and its CEO Tim Cook sought to undermine that argument by noting that the iPhone is one of several devices where Fortnite users can play and purchase V-bucks, including Android smartphones (Epic is fighting a similar lawsuit against Google). and video game consoles such as PlayStation and Xbox, many of which also do not allow alternative payment methods and charge similar fees.
It is not illegal to have a monopoly under United States law;
it is only illegal to try to preserve a monopoly at the expense of competition.
Apple also justified its 30% commission by saying that earnings from in-app payments help improve security and privacy for iPhone users, giving developers a massive captive audience.
"We have made a decision," Cook told the judge.
"There are clearly other ways to monetize, but we chose this one because this is generally the best."
The 'Apple tax'
Apple's commissions on in-app payments, which developers often refer to as the "Apple Tax," have been criticized by developers, lawmakers, and regulators around the world for years.
And while the Epic lawsuit is one of the highest-profile legal challenges, it is one of many in the last year alone.
Music streaming service Spotify and dating app parent company Tinder Match Group have been other notable antagonists, with the former taking on Apple in both the United States and Europe for alleged anti-competitive behavior.
In the weeks leading up to the verdict, Apple made several adjustments to the App Store's policies in a possible attempt to avoid further criticism of its practices.
In late August, the company announced a settlement in a class action lawsuit that allows app developers to email their users about alternative payment methods.
A few days later, the company said it will further relax restrictions on "reader" apps, a designation that applies to companies like Spotify and Netflix that distribute media, and allow those apps to link to external websites for users to use. users configure and manage them.
accounts.
That update, which will take effect in 2022, was in response to an investigation by Japan's Fair Trade Commission.
Those changes have received skeptical reception from major developers who have taken on Apple.
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"This is a stark demonstration of their monopoly power - making fanciful changes designed to stimulate good public relations to their advantage just as legislation, regulatory scrutiny and developer complaints approach them," said a Match Group spokesperson. in response to the Apple class action lawsuit.
I agree to relax the email rules for developers.
"We hope everyone sees this for what it is: a sham."
González Rogers ordered Apple to change that system on Friday, saying the company can no longer prohibit developers from directing users to external payment mechanisms.
The order will take effect in 90 days.
However, it also found in favor of Apple in a counterclaim that Epic violated the contract by subverting the payment system in Apple's application and ordered the developer to pay damages equal to 30% of the $ 12,167,719 in revenue it collected from the iOS Fornite app.
between August and October 2020, plus 30% of the income you earned from the application from November 2020 to the date of the judgment and interest.
Meanwhile, the pressure on Apple continues to mount, and the company still faces antitrust scrutiny from the US Senate, as well as from UK and European regulators.
South Korea has already taken one of the harshest actions against Apple's in-app payment restrictions, passing a law in early September that requires Apple and Google to offer alternative payment systems to their users in the country.
González Rogers' decision is expected to be appealed and the case could drag on for several months or even years.
Manzana