US Appeals Court Rules in Favor of Apple against Fortnite Maker Epic Games over App Store Policies

UTC by Steve Muchoki · 3 min read
US Appeals Court Rules in Favor of Apple against Fortnite Maker Epic Games over App Store Policies
Photo: Depositphotos

The ruling, though it was a huge win for Apple, had minimal effects on AAPL shares.

After more than two years of litigation, the United States Ninth Circuit Court of Appeals affirmed a lower-court judge’s 2021 decision that largely rejected claims by Epic Games – the maker of Fortnite – that Apple Inc (NASDAQ: AAPL) violated federal law through its online marketplace policies. Notably, the Court of Appeal’s panel upheld the lower-court judge’s ruling in Epic’s favor on California state law claims.

Closer Look at Apple Inc’s Victory against Epic Games

As a result, application developers tapping on the App Store will keep paying Apple 30 percent of their income, which collectively contributed to $78.1 billion in services revenue in the fiscal year 2022.

“There is a lively and important debate about the role played in our economy and democracy by online transaction platforms with market power,” the three-judge panel said. “Our job as a federal court of appeals, however, is not to resolve that debate – nor could we even attempt to do so. Instead, in this decision, we faithfully applied existing precedent to the facts.”

The Judges ruled 9 out of 10 in favor of Apple, but Epic Games won a ruling that allowed developers to make payments for subscription apps outside of Apple’s payment system. Nevertheless, Apple welcomed the ruling as a resounding victory, having been acquitted for the second time by a federal court over violating antitrust laws.

“The App Store continues to promote competition, drive innovation, and expand opportunity, and we’re proud of its profound contributions to both users and developers around the world. We respectfully disagree with the court’s ruling on the one remaining claim under state law and are considering further review,” Apple noted.

Epic Games founder and CEO, Tim Sweeney, went to Twitter to accept the 9th Circuit Court ruling in favor of Apple. Notably, the court indicated that Epic Games did not prove the Sherman Act case

Bigger Picture

The ruling, although a huge win for Apple, had minimal effects on AAPL shares. According to market data provided by MarketWatch, AAPL shares closed Monday trading around $165.33, having gained 0.19 percent during the day.  Nonetheless, Apple shares have gained approximately 27.25 percent YTD. With a market capitalization of approximately $2.61 trillion, Apple is revered as one of the top tech companies shaping the global markets.

Apple is not, however, out of the woods yet as the European Union legislators are about to pass laws that push Apple to allow outside applications on its App Store through the upcoming iOS 17 software update.

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Steve Muchoki
Author Steve Muchoki

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