Shortly after appeals court judges ruled against Apple’s contempt appeal in a years-long antitrust dispute against the makers of Fortnite, I got to talk to Epic Games CEO Tim Sweeney in an interview. According to Sweeney, today’s ruling “completely shuts down” Apple’s App Store rules that allow it to collect “junk fees.”
The three-judge Ninth Circuit Court of Appeals panel largely affirmed an April ruling that Apple failed to comply with Judge Yvonne Gonzalez Rogers’s 2021 order allowing app developers to link to external payment options, which Sweeney said “… is really awesome for all developers.”
Perhaps the most notable part of the appeals court ruling is that the panel is asking Gonzalez Rogers to look at ways Apple could charge developers reasonable fees for purchases made in apps using outside payment links. In her April ruling, Gonzalez Rogers blocked Apple from taking any fees from external payments because of decisions like slapping external payments with a 27 percent fee and forcing developers to make their payments links in plain text.
But the appeals court says Apple “should” be able to charge a fee based on “the costs that are genuinely and reasonably necessary for its coordination of external links for linked-out purchases, but no more” and that Apple is “entitled to some compensation for the use of its intellectual property that is directly used in permitting Epic and others to consummate linked-out purchases.”
“If you want to have an app go through review with custom linkouts, maybe there’s several hundred dollars of fees associated with that every time you submit an app, which is perfectly reasonable because there are real people at Apple doing those things and Apple pays them, and we should be contributing to that,” Sweeney says. But he says that the ruling, “completely shuts down, I think, for all time, Apple’s theory that they should be able to charge arbitrary junk fees for access.”
With these two areas that Apple would be allowed to charge for, Sweeney says that “I can’t imagine any justification for a percentage of developer revenue being assessed here.”
Weeks after the April ruling, Fortnite returned to the US App Store — nearly five years after Apple originally kicked it off when Epic introduced its own in-app purchase system to Fortnite. And there are efforts globally to require Apple to allow third-party app stores on iOS, like the Digital Markets Act in Europe, which is the reason you can get Fortnite from the mobile Epic Games Store in that region.
“So far, Apple has taken the strategy of collecting junk fees and every territory until they’re forced by law enforcers or regulators to stop,” Sweeney says. “I’m not sure if they’re going to continue that until they’ve lost every single battle around the entire world, or if they are at some point going to harmonize their global policies. I certainly hope that Apple would, at some point, just try to come to a soft landing and have a single worldwide policy that works for everybody.”
Sweeney expects that the Ninth Circuit’s opinion will unblock “a lot” of regulatory efforts around the world. “Why on earth would any self-respecting country in the world allow Apple to charge fees that the United States court has found to be illegal in the United States?” he says.
The ruling wasn’t the only big news for Epic and Fortnite on mobile today: the game also returned to Google Play in the US after similarly being booted by Google when Epic added the in-app payments system to Fortnite. Epic and Google announced last month that they have agreed to settle their lawsuit, and while the two sides are still seeking court approval for their settlement, it resolves their disputes worldwide.
“I’ve been very impressed with the new generation of the Android leadership,” Sweeney says. “They turned over a new leaf here.”
