Apple wins Epic antitrust suit

Bizar Male

On the main allegations against Apple, though, her ruling offered yet another sign of the high legal bar that Silicon Valley’s critics face in proving antitrust violations.

“Apple enjoys considerable market share of over 55 precent and extraordinarily high profit margins, [but] these factors alone do not show antitrust conduct,” Gonzalez Rogers found. “Success is not illegal.”

The ruling comes as Apple remains under investigation for potential competition law violations by the Justice Department, in Europe and in several Asian countries. But the decision is far from the last word on the case, as Epic Games has already indicated it was likely to appeal.

The lawsuit: The Fortnite-maker sued last year after Apple removed Epic’s game from the App Store, the only place iPhone and iPad users are allowed to download apps. Epic alleged that Apple illegally tied access to the App Store with an in-app payment system that charges a 30 percent commission on sales of digital goods and services.

At a three-week trial in May, Apple argued that its App Store restrictions helped improve security and privacy for iPhone users. The 30 percent commissions, the company said, pay for use of Apple’s intellectual property and fund innovations throughout the iPhone ecosystem.

The ruling: In a 185-page decision, Gonzalez Rogers rejected how both companies had framed the issue, saying the relevant market was the $100 billion market for digital mobile gaming transactions, in which Apple is not an illegal monopolist.

But the iPhone-maker’s restrictions on developers that prevent them from telling customers they can less expensively purchase the same things online break state law by limiting consumer access to information, Gonzalez Rogers found. The “restrictions artificially increase Apple’s market power by preventing developers from communicating about lower prices on other platforms.”

“Without information, consumers cannot have a full understanding of costs,” she wrote. “Apple contractually enforces silence, in the form of anti-steering provisions, and gains a competitive advantage.”

Because it breached a legal contract with Apple, Epic will owe the company 30 percent of the $12 million it collected when it introduced an alternative payment system onto the iPhone version of Fortnite, Gonzalez Rogers ruled.

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