Epic Games appeals ruling that will force it to pay Apple millions in damages
Fortnite maker Epic Games has appealed a court ruling requiring the company to pay millions of dollars in damages to Apple for violating the iPhone maker’s payments rules, new court papers show.
The move means that the closely-watched legal battle over the future of apps could drag on for additional months or even years.
“Notice is hereby given that Epic Games… appeals to the United States Court of Appeals for the Ninth Circuit from the final Judgment entered on September 10, 2021,” Epic Games wrote in a terse California federal court filing late Sunday.
The appeal comes after a federal judge on Friday ruled that Epic breached its contract with Apple when the video game maker let customers pay for Fortnite features directly, violating its contract with Apple by circumventing the iPhone maker’s payments processor that charges fees of up to 30 percent.
The decision required Epic to pay Apple 30 percent of the $12 million in revenue the game developer collected between August and October 2020, as well as any additional revenue the company has collected since. The final dollar amount was unclear.
But the judge also ordered that Apple loosen its payments rules and allow developers to route users toward non-Apple payments options, putting billions of dollars worth of commissions-linked revenue in jeopardy in the longer term.
Most observers saw Friday’s ruling as a loss for both companies, with Epic’s CEO immediately pledging to appeal even as Apple’s shares tumbled more than 3.3 percent on the news.
Apple shares had partially recovered on Monday morning, trading up 1.4 percent at $151.05.
In a statement to The Post, Apple SVP and General Counsel Kate Adams praised Friday’s ruling as a “resounding victory” but did not comment on Epic’s appeal.
Epic Games did not immediately reply to a request for comment.
In its lawsuit, Epic Games had argued that Apple requiring developers to use its own payments system was evidence that the company is a monopoly.
But while US District Judge Yvonne Gonzalez Rogers said in the Friday ruling that Apple was engaging in “anti-competitive conduct under California’s competition laws,” she stopped short of labeling the company a monopoly. Rogers ruled in favor of Apple on nine of 10 counts.
Apple’s payments commissions — which make up a sizable chunk of the company’s revenue, bringing in billions revenue — have been slammed by critics including Epic Games, Tesla CEO Elon Musk and politicians around the globe as unfair to developers.
A group of bipartisan lawmakers in the US Senate and House have introduced bills targeting Apple and Google’s “stranglehold” over developers by allowing users to download apps from third-party app stores.
Additional reporting by Will Feuer