BATTLE OVER THE IPHONE APP STORE SPILLS INTO APPEALS COURT

Apple and the company behind the popular video game Fortnite squared offMonday before three federal appellate judges who will render the next decision in a high-stakes battle over whether Apple created an illegal monopoly via its exclusive control of its iPhone app store. Such monopolies typically stifle competition and drive up consumer prices.

The oral arguments laid out in the Ninth Circuit Court of Appeals by lawyers from Apple and Fortnite maker Epic Games follow a September 2021 lower court ruling that largely preserved Apple’s sway over the apps it allows on more than 1 billion iPhones worldwide. The 75-minute session was a prelude to an expected ruling by the appeals court, likely to be issued sometime next year.

A so-called “walled garden” protecting the iPhone app store includes a payment system that funnels Apple commission revenue ranging from 15% to 30% on the purchases of some subscriptions and other digital services through its storefront. The setup generates an estimated $15 billion to $20 billion for Apple every year, which has helped lift its market value to nearly $2.4 trillion.

Epic lawyer Thomas Goldstein depicted Apple’s walled garden as a pretext for increasing its profits at the expense of the companies making the apps that have helped make iPhones so popular.

“The only thing that is kept out by Apple’s walled garden is competitors,” Goldstein said.