Report from the New York Times
In Brief – More than four-and-half years after blocking Epic Games’ highly popular Fortnite gaming app from its app stores in a massive antitrust dispute, Apple has allowed the app to again be in the US App Store. The move came after Federal District Judge Yvonne Gonzalez Rogers, who has overseen the case since mid-2020, ordered Apple to reinstate Fortnite or return to court with the executive in charge of the decision to prove it had a legal basis for not doing so. The next day, Fortnite was back on iPhones and iPads in the United States, and Epic and Apple signed a joint statement to Rogers saying they had resolved that dispute. Back in 2021, Judge Rogers ruled in Apple’s favor on the federal antitrust claims, but determined that the company’s anti-steering practices violated California’s Unfair Competition Law and ordered Apple to allow app developers to process their own in-app payments. Apple lost its appeal and instituted new processes that warned its users about making purchases outside of Apple’s system and still charged app developers a 27% commission. Epic complained that the new processes violated Rogers’s order. The judge recently agreed, blasting the iPhone giant in a contempt order, requiring it allow all app developers to direct users to external websites for in-app purchases without any limitations or commissions, and deriding the 27% fee as barely less than the 30% she repeatedly called “supracompetitive”. Apple has appealed that latest order claiming the judge cannot force it to “permanently give away free access to its products and services.”
Context – Despite siding with Apple on the federal antitrust charges, Judge Rogers referred to them as an “incipient monopolist” and was skeptical they deserved 30% commissions, calling them a “windfall”. Despite Epic’s lawsuit being about payments processing, and Rogers’s injunction being about anti-steering, the real issue was always Apple’s fees, meaning prices. And who sets them. The Ninth Circuit Court of Appeals will next determine the extent to which a federal judge can use California’s Unfair Competition Law to take over pricing nationally for a company that is not a monopolist under federal law.