Fortnite parent Epic Games wants to curtail iPhone maker’s ‘Dark Cloud’ of app control

epic games inc. urged a court to force Apple to allow more competition for mobile apps, calling the iPhone maker’s control of its App Store a “dark cloud.”

epic games inc. urged a federal appeals court to grant Apple Inc. to allow more competition in the mobile application market, calling the iPhone maker’s rigid control over its App Store a “dark cloud.” Thursday’s filing escalates a battle that began in 2020 after Apple removed the Fortnite game from the App Store because Epic came up with a workaround to pay a 30% fee for in-app customer purchases.

Epic told the San Francisco-based Ninth Circuit Court of Appeals that a lower court judge erred in concluding in a September ruling that the App Store’s rules and restrictions are not antitrust violations.

Apple is facing a number of antitrust lawsuits in and outside the US to open up the App Store to competition. Apple is also battling monopoly enforcement investigations by federal and state agencies, and legislative bids to curb its business practices.

An Apple spokesperson said the company is confident that the rulings challenged by Epic on appeal will be upheld.

“In its ruling last year, the court affirmed that Apple is not a monopolist in any relevant market and that its agreements with app developers are legal under antitrust laws,” the spokesperson said. “The court recognized the value of Apple’s ever-increasing innovation and commitment to privacy and security, benefiting users and developers alike.”

Epic said apps are a good force because they enable so many different activities on a phone, from social media to gaming to calling ride-share cars. But the apps function “under a dark cloud: contractual and technological restrictions imposed by Apple to maintain its monopoly and limit competition,” Epic said in its filing.

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The appeals court must overturn the decision of U.S. District Judge Yvonne Gonzalez Rogers in Oakland, Calif., to leave the App Store business model largely intact, Epic said.

“Failing to reverse the decision would overturn the established principles of antitrust law and, as the court itself has acknowledged, undermine proper antitrust policy,” the filing said.

Gonzalez Rogers discovered that Apple was engaged in anti-competitive behavior and instructed the Cupertino, California-based tech giant to direct app and game developers to direct consumers to third-party payment methods on the Internet. All developers can for the first time include a button and web links in their apps to let users pay for online transactions, avoiding Apple’s fees.

Apple is appealing that part of the judge’s ruling. It could take years for the dueling appeals to be resolved and potentially before the U.S. Supreme Court.

Epic, which took in more than $5 billion from Fortnite in 2020, has also filed complaints against Apple in the European Union, the UK and Australia, and the gamemaker is suing Google over its Google Play store.

The lower court is Epic Games Inc. v. Apple Inc., 20-cv-05640, US District Court, Northern District of California (San Francisco).

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