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The Epic vs Apple judgement leaves much undecided | Opinion

Apple must allow app developers to point consumers at alternative payment methods - but there will be many more legal wrangles before the impact on mobile games is clear

After many months and endless dissection of the various revelations which emerged from the evidence made public in the legal battle between Apple and Epic, we have a judgement.

Much and more has been written about that judgement, which largely speaking does not uphold the bulk of Epic's claims against Apple, while also being careful not to fully exonerate Apple either -- but one thing that seems increasingly clear as lawyers and commentators analyse the ruling is that far from being the white smoke that indicates a decision has been finalized, this is only the start of a much longer and more complex process to decide exactly how digital marketplaces and app stores are to be regulated.

In a sense, it's the shapes of the negative spaces in this ruling that are its most interesting aspects -- the things the court did not address or chose to leave to interpretation in future legal, or perhaps even legislative, proceedings. Even those aspects of the ruling which do have clear substance may not be set in stone; it's clear already that Epic intends to appeal the judgement. It's much less clear whether Epic can reasonably expect to overturn significant portions of the ruling on appeal -- a judge in an appeal case may tweak the edges of things somewhat, but it seems unlikely that Epic will find a judge who disagrees profoundly with the core of the existing ruling, namely the decision that Apple is not a monopoly, even if it does engage in certain anti-competitive behaviours.

Judgment in the Epic vs Apple trial isn't the end of the story; it's at most a key paragraph in the prologue to a complex, evolving situation

Honestly, even with the case now concluded (pending appeal proceedings), one thing I'm still very unsure about is to what extent Epic actually anticipated significant legal victories, versus the extent to which it's using the courts as a way to draw attention to its claims and frame itself as a crusader in the public eye. Several comments in the judgement are fairly critical of how Epic handled its legal case and one can reasonably interpret them as hints that the judge also felt that her courtroom was being used as a stage for a PR battle to some extent.

The key decision about Apple's status as a non-monopoly in this market may be unlikely to change, but there are still plenty of negative spaces in the ruling that are left wide open to be clarified on appeal, or interpreted and explored through future court cases.

A major aspect here is the detail of the ruling that Apple must permit app developers to inform users about non-Apple payment options both within their apps and games, and through direct contact with them using contact details requested in-app. The order is deceptively simple, but once you start digging into it, it's very unclear what the boundaries on what is permitted will be. The language in the judgement mentions adding links or buttons to apps, and the definition of "button" will probably be heavily contested in future -- is it possible, for example, that much of the external payment process can be incorporated into an app, culminating in a "button" that actually does the transaction externally? Or can the button really only be a link of sorts, saying "there's an alternative payment method", with all the details and functionality being on a website somewhere?

The specifics of how these external payment options will function within the broader ecosystem of the App Store also remain hazy and require further definition. Will it be possible, for example, for developers to use external payment options exclusively, or will Apple remain within its rights to demand that App Store payments be available as an option -- perhaps even a primary, or default option? Will it be possible for Apple to somehow demand or enforce price parity between App Store payments and external payment services, and what will the company's rights be with regard to collecting its revenue share (30% or otherwise) from purchases on external platforms?

While developers can now offer alternate payment options, consumers may continue to use iOS' built-in system as a tried and trusted method to buy things

The assumption that off-store purchases won't be subject to Apple's revenue share isn't supported by the ruling, not least by the aspect of it which demands that Epic pay Apple 30% of the revenue it collected for Fortnite during the period when it was processing IAP for the game off the App Store. The implication here is that Apple's contract terms regarding revenue share continue to apply even if a developer uses an external payment processor, though that will no doubt be challenged in future cases.

An appeal case may tweak the edges of things somewhat, but it seems unlikely that Epic will find a judge who disagrees profoundly with the core of the existing ruling

These are really important questions, because depending on the answers that emerge in the coming months and years, the ruling may have a very major impact on the in-app payments ecosystem -- or almost no impact at all. Generally speaking, paying for IAP using the default, OS-level system provided by Apple (or Google) is going to be the path of least resistance for most consumers: fast, easy, safe, and well-trusted. Just permitting other payment options to exist and to be promoted within apps doesn't really matter much if there's no effective way to differentiate those options and offer significant benefits to consumers who use them. That's a fact that Apple is keenly aware of, judging from its decision to pre-empt the judgement in the Epic case by changing its policies to allow the promotion of external payment options in some cases. It will now have to make that policy change universal; but the details of how it will be implemented and enforced will make an enormous difference to the potential impact of the change.

Even beyond these unspecified aspects of the ruling, an even bigger source of uncertainty is the fact that while the Epic vs Apple case has attracted a great deal of attention -- not least due to the glimpses it provided at the industry's inner workings -- it's far from the only legal tussle involving App Stores. The next few years are set to see a whole host of different judgements and decisions that will impact how these digital marketplaces function and are governed. Within the United States, there's an ongoing, if slow-moving, set of antitrust investigations into technology giants -- though this is wrapped up in a lot of partisan political grandstanding and seems relatively unlikely to yield major change in the near future as a result.

More likely to pull the rug out from under the industry to some extent is the EU's exploration of monopolistic and anti-competitive behaviour in digital marketplaces. This points to the troubling possibility that what's going to emerge in the coming years is a patchwork of regional and national regulations, rather than a global consensus on an effective new status quo.

We've already seen Apple strike a deal over promotion of external payment services with Japanese regulators, and the South Korean government enacting a law (whose implementation specifics, like the California judgement, remain quite unclear) that forces App Store operators to open up IAP payment processing options. It's very possible that no one-size-fits-all regulatory approach to App Stores will emerge, ultimately creating a complex and tricky environment for app and game developers to navigate, with a different set of options and functions for monetization depending on the user's region.

The one thing that seems, thus far, to be entirely off the table is the one thing that Epic appeared to want most of all -- the possibility of putting third-party app stores on iOS, bypassing Apple's storefront entirely. The California ruling acknowledged that the impossibility of creating a third-party alternative to the App Store has suppressed innovation to some extent, but still more or less dismissed this notion out of hand as unwarranted given that Apple itself is not a monopoly. It doesn't seem to have been considered as an option even in South Korea, and there's no sign of the EU taking such a concept seriously yet either.

This fact will be leading Apple executives to sleep easier. Being forced to open iOS up to rival app store platforms would be an enormous disruption to what has become a very core part of Apple's business; almost anything short of that would be a challenge the company can overcome relatively easily. As this option is largely being left out of the discussion for now, the actual degree of disruption these various investigations and court cases can cause is limited -- but Epic is determined to continue fighting, future battles on the interpretation and implementation of new rules in the US, South Korea and elsewhere loom, and the wheels of national and supranational investigations into competitiveness in app marketplaces continue to grind inexorably forward.

Judgment in the Epic vs Apple trial isn't the end of the story; it's at most a key paragraph in the prologue to a complex, evolving situation that will shape parts of the industry for years if not decades to come.

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Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.