9th Circuit Ruling Could Offer Redress For Anti-Competitive Conduct

Epic Games and Apple have been squabbling in and out of court for thirteen years about Epic’s access to Apple’s consumer list and developer tools that facilitate the development of iOS apps for phones and other mobile devices.

They first agreed on a flat $99 fee and an ongoing 30 percent commission on iOS revenue, but Epic took exception to that system, dubbed the “walled garden,” by which Apple precludes developers and users from transacting freely without its mediation. Epic sought terms that would allow iOS users distribution through its Epic Game Stores app, and competing payment processing options through Epic Direct Pay. Apple said no.

Epic Games submitted a software update to its game, Fortnite, to Apple for review. It contained a surreptitious code that would permit Fortnite users to make purchases through Epic’s direct pay option. Apple agreed at first, but soon became aware of the code, and removed Fortnite from the App Store. Epic sued Apple under both the federal antitrust laws and California’s Unfair Competition Law (UCL).

As reported by the Hausfeld firm, the litigation over the UCL wound its way through district court, the Ninth Circuit, and is now before the US Supreme Court. One issue is whether Apple’s policy of limiting app developers’ ability to communicate the availability of alternative payment options to iOS device users (commonly referred to as its “anti-steering rules”) is unfair under the UCL.

The Ninth Circuit agreed with the lower court that an injunction against Apple’s prohibition on Epic directing developers to its own store violated anti-steering rules. According to Hausfield, the ruling presents a possible road map for claimants in California to seek redress for conduct that may not satisfy all of the requirements for relief under the antitrust laws. Apple has petitioned the Supreme Court for review.