## Facts

- Epic Games developed Fortnite and distributed it on iOS through Apple’s App Store under Apple’s developer license agreement.
- Apple required iOS apps to be distributed through the App Store, required use of Apple’s in-app purchase system for digital goods, and charged commissions (often 30%).
- Apple also enforced anti-steering rules restricting developers from directing users to alternative payment methods (e.g., via links, buttons, or in-app messaging).
- On August 13, 2020, Epic intentionally added a direct-payment option in Fortnite that bypassed Apple’s in-app purchase system and commission.
- Apple removed Fortnite from the App Store and later terminated Epic’s developer account.
- Epic sued alleging violations of federal antitrust law and California law; Apple counterclaimed for breach of contract and sought attorney’s fees.
- After a bench trial, the district court largely ruled for Apple on antitrust claims, ruled for Epic under California’s Unfair Competition Law (UCL) as to anti-steering, issued a nationwide permanent injunction, found Epic in breach of contract, and denied Apple attorney’s fees.
- The Ninth Circuit affirmed the rejection of Epic’s antitrust claims and affirmed the UCL injunction, but reversed the denial of attorney’s fees and remanded on fees; the Supreme Court denied certiorari, leaving the Ninth Circuit’s judgment in effect.

## Issues

1. What was the relevant antitrust market for evaluating Apple’s iOS app distribution and in-app payment rules, including whether a single-brand aftermarket theory applied.
2. Whether Apple unlawfully restrained trade or maintained monopoly power under Sherman Act §§ 1 and 2 through App Store distribution limits, in-app purchase requirements, and related conduct.
3. Whether, under the rule of reason, Epic proved anticompetitive effects not outweighed by legitimate justifications and identified substantially less restrictive, equally effective alternatives.
4. Whether Apple’s anti-steering provisions were “unfair” under California’s UCL even if they did not violate federal antitrust law.
5. Whether Epic’s deliberate contract breach was excused by an illegality defense based on asserted antitrust violations, and whether Apple was entitled to contractual attorney’s fees.

## Decision

- The Ninth Circuit affirmed judgment for Apple on Epic’s Sherman Act claims and affirmed rejection of Epic’s illegality defense.
- The Ninth Circuit affirmed that Epic breached the developer agreement by implementing an unauthorized in-app payment mechanism.
- The Ninth Circuit affirmed judgment for Epic on the California UCL claim targeting Apple’s anti-steering provisions.
- The Ninth Circuit left in place a nationwide permanent injunction barring Apple from prohibiting developers from using in-app buttons, external links, or other calls to action directing users to purchasing mechanisms outside Apple’s system, and from restricting certain developer communications about alternative purchasing options.
- The Ninth Circuit reversed the district court’s denial of Apple’s attorney’s fees and remanded for further proceedings on fees.
- The Supreme Court’s denial of certiorari left the Ninth Circuit’s disposition and the injunction intact.

## Legal Principles

- Antitrust liability under Sherman Act §§ 1 and 2 in platform settings generally requires proof of a properly defined relevant market, anticompetitive effects, and, under the rule of reason, failure of asserted procompetitive justifications or proof of substantially less restrictive, equally effective alternatives.
- A single-brand aftermarket theory is not established merely by control over a brand-specific ecosystem; the factual record must support the proposed market definition and the conditions for aftermarket treatment.
- Procompetitive justifications such as security, privacy, and platform investment can defeat antitrust claims if credited and if plaintiffs do not prove workable, less restrictive alternatives that achieve the same objectives.
- Conduct may be actionable as “unfair” under California’s UCL even where federal antitrust claims fail, supporting injunctive relief against specific business rules.
- Intentional circumvention of agreed platform payment requirements can constitute breach of contract, and an illegality defense fails where the challenged terms are not established as unlawful under the governing antitrust standards; contractual fee provisions may require fee determinations on remand.

## Conclusion

The final judgment rejected Epic’s federal antitrust challenges to Apple’s App Store distribution and in-app payment model, but permanently enjoined Apple nationwide under California’s UCL from enforcing anti-steering rules that prevented developers from directing users to alternative purchasing options; Epic was held to have breached its contract, and Apple’s request for attorney’s fees was remanded for determination.


Epic Games, Inc. v. Apple Inc., 67 F.4th 946 (9th Cir. 2023)