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Apple Loses 'Fortnite' Ruling, Can't Force App Store Partners to Pay 30% of Sales

(Image credit: Epic Games)

A federal judge on Friday ruled that Apple cannot force Epic Games to use its online payment system in order to sell its games in the Apple App Store.

Apple has 90 days to comply. 

With Apple and Google both grabbing as much as 30% in commissions off sales made in their respective app stores, the ruling, made by Judge Yvonne Gonzalez Rogers of the U.S. District Court in the Northern District of California, could have major effects on a business that generated as much as $100 million for Apple over just a 30-month period, according to earlier trial testimony

The ruling, coming after a three-week trial in May, also removed Apple's ability to restrict App Store companies from communicating directly with their customers using contact info gleaned during signups for app services conducted in the Apple App Store. 

Both Apple and Google were sued by Epic Games in August of last year, after the company began selling in-game trinkets for its popular online videogame, Fortnite, through third-party vendors, and Fortnite was subsequently pulled from the Apple App Store and Google Play Store for alleged policy violations. 

Gonzalez' ruling, however, stopped far short of Epic Games' full anti-monopolist ambitions. For example, the judge refused to compel Apple to open its iPhone platform to third-party app stores. 

"Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws," 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 conduct decreasing output or decreasing innovation in the relevant market."

Apple said in a statement: "As the Court recognized ‘success is not illegal. Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world."

Epic didn't immediately release a statement of its own, but the verdict will almost undoubtedly be appealed.

Added advocacy group Fight for the Future: “Unfortunately, this court decision does nothing to address the real harm of Apple’s restrictive and monopolistic app store policies. As long as Apple maintains an authoritarian stranglehold over what software millions of people can and can’t run on their phones, the company will be actively helping repressive governments undermine human rights and censor apps used by journalists, dissidents, and vulnerable communities. The bottom line is that you can’t be a values-driven privacy company and an aspiring monopoly at the same time."

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!