WASHINGTON (CN) — Fortnite maker Epic Games lost a Supreme Court appeal on Tuesday asking the high court to review monopoly claims against Apple’s App Store.
Epic brought antitrust claims against Apple, claiming the tech giant violated the law by forcing companies to use Apple’s proprietary tools to develop and distribute apps on its App Store.
Not only do all apps move through the App Store, but Apple requires app developers to use its in-app purchase system to conduct transactions. Apple makes a commission on all of these purchases — about 15-30% of each sale. Game makers were also prohibited from using external links to divert customers to other sites for purchases.
The video game maker equates Apple’s system to a “walled garden,” where iPhone users are locked in a closed platform and only able to download apps from Apple. Epic accused Apple of engaging in anticompetitive practices prohibited by the Sherman Act.
U.S. District Judge Yvonne Gonzales Rogers ordered Apple to halt restrictions preventing developers from adding external links and other buttons in their apps. Rogers stopped short, however, of finding Apple had engaged in monopolistic behavior in violation of federal antitrust laws.
The Ninth Circuit rejected Epic’s appeal asking the panel to reconsider if Apple was running a monopoly. The appeals court also refused to overturn Rogers’ order barring Apple from blocking app developers from using external links.
Both Epic and Apple appealed to the Supreme Court for intervention.
Epic claimed the Ninth Circuit’s ruling went against Supreme Court precedent. The game maker argued that the appeals court applied the wrong test, resulting in serious harm to iPhone users and developers.
“The court recognized that these restraints cause massive harm to competition, affecting 1 billion iPhone users, by imposing huge supracompetitive costs and diminishing innovation and quality,” Thomas Goldstein, an attorney representing Epic, wrote. “By contrast, the court found that the only procompetitive rationale that Apple could not achieve without blocking competition was its ‘nebulously defined and weakly substantiated’ interest in recovering ‘some compensation’ for its intellectual property.”
Apple argued that Epic failed to prove any of its claims at the trial stage and that’s why the game maker lost on appeal.
“Petitioner Epic Games, Inc. lost this case because it ‘failed to demonstrate,’ ‘failed to convince,’ ‘failed to produce,’ ‘failed to present,’ ‘failed to show,’ ‘failed to persuade,’ and ‘failed to prove’ essential elements of its antitrust claims against respondent Apple Inc. at trial,” Mark Perry, an attorney with Weil Gotshal representing Apple, wrote.
Justice Elena Kagan had previously allowed Apple to retain a pause on the portion of Rogers' order regarding external links, but the order is now certain to take effect since the high court won't intervene.
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