Fortnite' Will Remain Out of Apple's App Store Ahead of Trial, Judge Rules -- 2nd Update
10 October 2020 - 11:45AM
Dow Jones News
By Sarah E. Needleman
A California federal judge said Apple Inc. doesn't have to
return the popular videogame "Fortnite" to its App Store but
maintained that the tech giant can't block the game's creator from
accessing its critical software development tools.
The ruling Friday on Epic Games Inc.'s motion for a preliminary
injunction yielded a split decision similar to Judge Yvonne
Gonzalez Rogers's order in August.
"Given the novelty and the magnitude of the issues, as well as
the debate in both the academic community and society at large, the
Court is unwilling to tilt the playing field in favor of one party
or the other with an early ruling of likelihood of success on the
merits," Judge Gonzalez Rogers wrote in her ruling.
The decision sets the stage for a trial next year that could
have broader implications on the market for mobile apps and the
companies that operate app marketplaces.
It also comes a few days after a report from the Democratic-led
House Antitrust Subcommittee accusing Apple of abusing its market
power with regard to how it operates the App Store. The report
referenced an article by The Wall Street Journal last year that
said Apple's apps routinely appeared in search results in its App
Store ahead of those from rivals. At the time Apple said it doesn't
give its own products an advantage over others and that it uses an
algorithm reliant on machine learning and past consumer preferences
to determine results, and that app rankings fluctuate.
"Our customers depend on the App Store being a safe and trusted
place where all developers follow the same set of rules," Apple
said in a statement. "We're grateful the court recognized that
Epic's actions were not in the best interests of its own customers
and that any problems they may have encountered were of their own
making when they breached their agreement."
A spokeswoman for Epic said the company appreciates the judge's
decision to preserve its access to Apple's software-development
tools but that it will continue to fight the tech giant on
antitrust grounds. "We will pursue all avenues to end Apple's
anticompetitive behavior," she said.
Epic sued Apple as well as Google in August after the companies
yanked its shooter-survival game from the App Store and Google
Play, citing the addition of an unauthorized payment system that
skirted their 30% commission on in-app purchases of digital
goods.
Epic claims that Apple's App Store commission is excessive, that
Apple unfairly prohibits developers from processing customer
transactions themselves and that the tech giant abuses its control
of the marketplace to stifle competition. The Cary, N.C., company
said in its lawsuit that Apple violated the Sherman Antitrust Act
in addition to California state rules regarding anticompetitive
conduct.
Apple, which countersued Epic, disputes Epic's
characterizations, saying that the developer can distribute its
software through multiple other channels and that its own app
marketplace's commission -- used to cover expenses such as security
and maintaining user privacy -- is similar to what other app
marketplaces charge. It also accused Epic of deliberately flouting
its rules and engaging in a campaign aimed at hurting its
business.
Epic has to prove Apple has monopoly power in the relevant
market and that it willfully acquire or maintain that power, the
judge's ruling said. The "Fortnite" maker has argued that Apple is
a monopolist in forcing developers to use only its App Store to
reach iPhone and iPad users as opposed to other app stores.
Friday's outcome undermines Epic's case, according to David
Hoppe, a tech and media attorney at Gamma Law in San Francisco.
"The judge is indicating skepticism over Epic's narrow definition
of the relevant market," he said. If Apple's App Store "isn't the
relevant market then Apple is not a monopolist."
As of late August, Epic Games' mobile titles had been downloaded
more than 159 million times since 2012 across Apple's App Store
globally, generating approximately $1.2 billion in consumer
spending, according to Sensor Tower Inc. Thirty percent of this
revenue, or about $360 million, went to Apple, the app analytics
firm said.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
October 09, 2020 20:30 ET (00:30 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Apr 2024 to May 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From May 2023 to May 2024