Epic Games vs. Apple: iOS apps may soon get payment options in addition to in-app purchases

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A federal judge for the Northern District of California on Friday permanently restrained Apple from mandating developers to only use the in-app purchase option managed by Apple.

The Cupertino giant charges a 30% commission on every purchase made through the App Store, whether an initial download or an in-app purchase. The order was part of the ruling in a case brought in by game developer Epic Games. Critics call the system an “Apple tax” on the developers.

Last year, Epic sought to implement a direct payment option in its popular game “Fortnite” which was rejected by Apple. In the version 13.40 update for Fortnite, Epic Games covertly introduced a “hotfix” permitting a direct payment option that would be activated when signaled by Epic Games’ servers.

Relying on the representations that intentionally omitted the full extent and disclosure of this hotfix, Apple removed Fortnite from the App Store. Epic subsequently sued Apple alleging violations of federal and state antitrust laws and California’s unfair competition law.

In the Friday verdict, Judge Gonzalez Rogers stopped short of declaring that Apple had a monopoly in the market of mobile games. She further held that Epic had breached its contract with Apple when it allowed Fortnite users to pay it directly, instead of via Apple, inside its iPhone app. The ruling also requires that Epic compensate Apple for the money collected when the direct payments option was made available.

The Court ruled in favor of Apple on all counts except concerning violation of California’s Unfair Competition Law (Count Ten) and concerning its claim for Declaratory Relief. While developers can now direct users to other payment options, they cannot still implement their own in-app payment system. In a tweet, Epic CEO Tim Sweeney said the order isn’t a win for developers and Fortnite will only return to iOS when Apple’s platform offers fair competition among in-app payment methods.

Apple, in a legal settlement announced last month with a group of app developers, said it would allow developers to urge customers to pay them outside their iPhone apps. So technically Apple had already agreed to the part of the ruling that went against it. In a similar case, Epic sued Google over Playstore policies earlier this year which is currently pending trial.