Context
For starters, the app market is a perfect duopoly (2-player market), Apple controls the iOS world whereas Google commands the android ecosystem.
Whenever any user purchases something inside of an iOS or Android app, the app developers essentially have to pay a certain cut to either of these players.
In Apple’s case, it takes 15-30% of the amount off the table as its commission, also known as the Apple tax.
Epic steers away!
So, the policy of Apple clearly states that any app trying to avoid Apple’s payment mechanism, in other words, the 30% commission rate will simply be removed from the app store.
This is exactly what Fortnite (Epic’s flagship game) did, providing gamers a discount to move beyond iPhone apps to make a payment for the in-app purchases.
Apple did what it had to, booted Fortnite off the store, not letting the app onboard new users and the existing users download the updated version.
Battle begins!
Apple’s move infuriated Epic’s top brass and consequently, a lawsuit was filed against Apple about its monopoly & antitrust activities in a federal court in Oakland, California.
The proceedings took place in May 2021, and the verdict came last week.
The result was largely in Apple’s favor.
How did it go?
Right off the bat, the judge in her verdict announced that Apple is not a monopoly & all its success in the gaming ecosystem is via fair means.
Whenever you call a business monopoly, it’s imperative to gauge the market size, then the market share of the particular business in it.
Whilst Epic considered the market to be iPhone apps, the federal judge perceived it to be total digital gaming transactions effectively adding all of Apple’s competitors.
The result was quite obvious, Apple was not a monopoly in that scheme of things!
More worse
On top of this ruling, the judge also asked Epic to pay 30% of the revenue it raked in via its alternative payment system from August 2020 to the current day, to Apple.
The saving grace for Epic was the anti-steering activity, the judge ordered Apple to not prohibit developers from getting their revenue from other payment sources. The programmers can provide their users’ third-party links that take them beyond iPhone apps for payment.
All in all, Epic is not happy with the verdict and will continue to maintain its stance and fight against all the odds!