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Apple Can No Longer Force Commission Fees on Developers, Judge Rules

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While the ruling marks a major win for app developers, Epic Games — which brought the lawsuit that sparked the ruling — was ordered to pay $3.5 million for violating its contract with Apple after initially bucking against the commission fee.


Apple Must Allow Multiple Payment Systems

A federal judge ruled Friday that Apple can no longer limit developers it hosts in its App Store to a single, commission-based option.

The decision, handed down by District Court Judge Yvonne Gonzalez-Rogers, comes after Fortnitedeveloper Epic Games filed separate lawsuits against Apple and Google last year for unfair app store practices. In each lawsuit, Epic alleged Apple and Google were engaging in antitrust activities by forcing developers to pay a 30% commission fee on all in-app purchases.

Leading up to the lawsuit, Epic initially implemented a secondary payment method that bypassed the mandatory fee system. Following that, both Apple and Google removed “Fortnite” from their app stores, alleging a breach of contract.

In her Friday ruling, Judge Gonzalez-Rogers provided one win for Epic, issuing Apple an injunction that “permanently restrain[s] and enjoin[s]” it from prohibiting developers to provide access to additional forms of payment in their apps. 

In other words, Apple can continue to implement its commission-based system, but developers don’t have to adhere to it and will be able to introduce new payment systems that allow them to keep a bigger portion of their sales. That will primarily come in the form of links that redirect users from their apps.

Last week, Apple announced that in early 2022, it will begin allowing “reader” apps, or apps with subscription-based models such as Netflix and Spotify, to redirect users to outside methods of payments. The move, a modest concession spurred from an investigation by Japan’s Fair Trade Commission, had no way of hurting Apple’s App Store revenue, unlike Friday’s ruling. That’s because “reader” apps do not currently offer any in-app purchases.

Like Apple’s agreement with Japan, Friday’s injunction is not immediate. Instead, it will take effect in 90 days (Dec. 9) provided a high court doesn’t reverse the decision.

Not a Complete Win for Epic

Epic didn’t walk away from its court battle with Apple completely unscathed. That’s because Judge Gonzalez-Rogers also ruled that Epic was in breach of its contract with Apple when it bucked against the company’s single-payment system.

As a result, she has ordered Epic to pay Apple 30% of all the revenue it has collected since it adopted its secondary payment method. In total, that’s a sum of more than $3.5 million.

Judge Gonzalez-Rogers likewise rejected Epic’s claim that Apple had formed a monopoly, saying, “the court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws.”

“Nonetheless, the trial did show that Apple is engaging in anti-competitive conduct under California’s competition laws,” she added.

Unsurprisingly, Apple has largely focused on the judge’s rulings against Epic rather than its significant loss related to commission fees. 

“Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” a representative told The Verge. “Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace.”

What’s Next?

Apple will almost certainly appeal its loss, but if the decision is upheld, that could mean a significant setback for the company, which has long argued that its commission fees act as a way to vet developers and ensure a safe experience for users. The App Store alone reportedly brought in $64 billion for the company in 2020.

The trial for Epic Games v. Google has not yet started, though Judge Gonzalez-Rogers’ ruling could indicate how another judge might rule on the issue. If Friday’s decision is upheld, it’s almost certain that Google’s Play Store would be held to the same standards as Apple’s App Store. Additionally, another lawsuit by 36 state attorneys general has been filed against Google’s app store practices. 

Internationally, South Korea late last month became the first country to pass a bill that bars major app stores from forcing developers to pay commission fees for users’ in-app purchases. Just before Judge Gonzalez-Rogers’ ruling Friday, Epic asked Apple to restore Fortnite to the App Store in South Korea; however, Apple has refused to do so until Epic agrees to “play by the same rules as everyone else.”

According to Axios, Apple will likely only concede to bring “Fortnite” back if ordered to do so by a court. 

See what others are saying: (The Verge) (CNBC) (Axios)

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“Cyberpunk 2077” Developer Agrees To Settle Lawsuit for $1.85M

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If approved, CD Projekt Red would pay just a small fraction of the $316 million it reportedly spent developing the game.


CDPR Agrees To Settle

Game developer CD Projekt Red (CDPR) has agreed to settle a class-action lawsuit related to its buggy launch of “Cyberpunk 2077” for $1.85 million, The Verge reported Thursday.

The lawsuit itself is actually a conglomeration of four different suits brought by shareholders who alleged that they were misled about the company’s financial performance. Since the game’s release, CD Projekt Red’s share price has fallen 54%.

The settlement must now be approved in court, but overall, it appears to be a small amount compared to the game’s $316 million budget. In fact, the game reportedly made $563 million in sales and only spent around $2.2 million on a refund campaign, though the developer’s overall refund cost for 2020 could have been as much as $51 million.

“Perhaps the plaintiffs didn’t have much of a case?” The Verge writer Sean Hollister speculated on why “it sounds like the lead plaintiffs and their lawyers negotiated for a fairly tiny sum here in exchange for ‘relinquish[ing] any and all claims against the Company and members of its Management Board.’”

“As expressly stated in the Term Sheet, execution of the Term Sheet does not imply admission of any responsibility on the part of the Company or any of the other defendants named in the case,” the negotiated settlement reads.

“Cyberpunk’s” Botched Launch

“Cyberpunk” was first announced in 2012, and for years, it was the subject of widespread fan anticipation. Seven years later, a release date of April 16, 2020, was given; however, that date was pushed back several times much to the ire of fans, some of whom even sent CDPR staff death threats.

The game was ultimately released amid fan pressure on Dec. 10, 2020, but it was so riddled with glitches that Sony infamously pulled “Cyberpunk” from its Playstation Store a week later, offering full refunds to all players who had purchased a digital copy. In June this year, “Cyberpunk” finally made its way back onto the Playstation Store following multiple patches and hotfixes from CDPR.

Despite “Cyberpunk” surpassing a massive 8 million pre-orders before launch, Bloomberg reported last week that “Where analysts had originally expected Cyberpunk sales of 30 million units in the year after the game’s release, they now expect 17.3 million copies to have been sold in that time.”

In October, CDPR delayed planned next-gen updates for both “Cyberpunk” and “The Witcher 3” until the first and second quarters of 2022, respectively.

“Apologies for the extended wait, but we want to make it right,” the developer said.

See what others are saying: (The Verge) (Engadget) (Video Games Chronicle)

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E.U. Court Rules That All Member Nations Must Recognize Same-Sex Parents

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The decision comes after a child named Sara was left without a country to call home because she had two mothers.


The Child With No Citizenship

The European Court of Justice, the European Union’s highest court, ruled Tuesday that all 27 of its member states must recognize same-sex parents and their children as a family.

The ruling stems from a case involving two women and their newborn daughter, whose status as a family originally varied between member nations. As a result, the couple’s daughter was left without citizenship in any country.

The two women, Bulgarian citizen Kalina Ivanova and Gibraltar-born British citizen Jane Jones, found themselves unable to take their newborn child Sara out of Spain after she was born in the country. Because Spain recognizes same-sex marriage, both Ivanova and Jones were registered as the girl’s legal mothers on her Spanish birth certificate.

However, under Spanish law, Sara was unable to gain citizenship in the country since neither of her parents were Spanish citizens. On top of that, she was denied British citizenship because Jones “was born in Gibraltar of British descent, and under the British Nationality Act (1981), [Jones] cannot transfer citizenship to her daughter,” the LGBTQ+ advocacy group ILGA-Europe said in a press release.

That left the couple with one other option: register Sara as a Bulgarian citizen. Still, the Bulgarian government refused to issue Sara a legally-recognized birth certificate, arguing that she is ineligible to have two mothers. Officially, Bulgaria does not recognize either same-sex marriages or same-sex registered partnerships. 

“Currently, the child has no personal documents and cannot leave Spain, the country of the family’s habitual residence,” lLGA-Europe said. “The lack of documents restrict Sara’s access to education, healthcare, and social security in Spain.”

EU Ruling

In its Tuesday decision, the European Court of Justice ruled that children in the EU have a legal right to freely move between countries given that such a right is afforded to all EU citizens. Because of this, all countries are now required to uniformly recognize the child’s parents, even if they are of the same sex. 

“That refusal could make it more difficult for a Bulgarian identity document to be issued and, therefore, hinder the child’s exercise of the right of free movement and thus full enjoyment of her rights as a Union citizen,” the court said

Despite some member states like Bulgaria not legally recognizing same-sex couples, the court stressed that its ruling “does not undermine the national identity or pose a threat to the public policy” of those nations.

That’s because while Bulgaria doesn’t have to issue its own birth certificate for Sara, it does have to recognize the Spanish birth certificate and issue its own identity card or passport for Sara.

“We are thrilled about the decision and cannot wait to get Sara her documentation and finally be able to see our families after more than two years,” Sara’s parents said according to the ILGA-Europe release. “It is important for us to be a family, not only in Spain but in any country in Europe and finally it might happen. This is a long-awaited step ahead for us but also a huge step for all LGBT families in Bulgaria and Europe.”

See what others are saying: (The Hill) (Insider) (Politico)

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GoFundMe Campaign Raises $8,700 for Waitress Who Was Fired After Not Sharing $4,400 Tip With Co-Workers

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The waitress said this was the only time management had ever tried to force her to pool a tip in her three-and-a-half years working at the restaurant.


Waitress Gets Fired After Receiving Massive Tip

An Arkansas waitress has received over $8,700 in donations online after she was fired from her job for refusing to split her half of a $4,400 dollar tip with the rest of the restaurant’s crew.

That waitress, Ryan Brandt, told local Nexstar outlet KNWA last week that she and another server received the tip after waiting on a group of more than 40 people at the Oven & Tap restaurant in Bentonville.

“It was an incredible thing to do and to see her reaction was awesome, to see what that meant to her, the impact that it’s had on her life already,” Grant Wise, who was part of the party Brandt served, told the outlet.

According to KNWA, Wise called the restaurant before his large party arrived and asked about its tipping policy since they intentionally planned to donate $100 each as part of a way to thank restaurant workers. At the time of his call, Wise said he was told the money would go directly to his party’s servers. 

“We knew servers were really hit hard through COVID, and it was something that we had come up with to help give back,” Wise told KFSM.

The outcome, however, was much different. After receiving the tip, Brandt and the other server were allegedly told by a manager that they needed to pool the tip with the rest of the workers on duty. Brandt told KNWA she had never once been asked to pool her tips in her three-and-a-half years at the restaurant prior to this.

Complying meant Brant would take home just 20% of her half of the tip.

At some point before leaving, Brandt informed Wise that her tip would be pooled with the rest of the staff. Wise, who had intended the money to only go to his servers, then asked management to return his tip, which he gave to Brandt directly outside the restaurant. The following day, Brandt said she was fired over the phone.

“It was devastating,” Brandt told local outlets. “I borrowed a significant amount for student loans. Most of them were turned off because of the pandemic but they’re turning back on in January and that’s a harsh reality.”

Oven & Tap did not speak on Brandt’s firing in its initial statement. Instead, it only said, “After dining, this large group of guests requested that their gratuity be given to two particular servers. We fully honored their request. Out of respect for our highly valued team members, we do not discuss the details surrounding the termination of an employee.”

In a follow-up statement, Oven & Tap owners Mollie Mullis and Luke Wetzel said, “The server who was terminated several days after the group dined with us was not let go because she chose to keep the tip money.”

“We recognize and regret that a recent incident in our restaurant could have been handled differently by reminding our team how we would be splitting any tips prior to the event, however, our policy has always been to participate in a tip pool/share with the staff. Tip sharing is a common restaurant industry practice that we follow to ensure all of our team members are adequately compensated for their hard work.”

Oven & Tap has still not specifically commented on why it fired Brandt, but Brandt told KNWA she believes it’s because she violated company policy by telling Wise that his party’s tip was going to be pooled. 

Online Fundraising Campaigns for Brandt

After learning of Brandt’s firing, Wise created a GoFundMe, which ultimately raised $8,732 for Brandt.

“[Brandt] is, from what I can tell, a very kind woman that was working two jobs to get by through the pandemic,” he said in his initial post. “She has incredible aspirations to grow her own business and I can tell has a servants-heart.”

Wise provided an update Tuesday saying that instead of closing the GoFundMe, he will keep the campaign open to raise additional money to “pay it forward” to a future group of restaurant staff who will wait on his party.

In January, we are going to host another $100 Dinner Club and I have invited [Brandt] to be our ‘Guest of Honor’!” he said. “Any dollar amount raised over the $8,732 that has already been raised and is being paid out to [Brandt] will be given directly to the staff of the restaurant we decide to eat at.”

“We will be working to ensure through this that all staff in the restaurant are tipped so everyone feels blessed by our dinner.”

As of Tuesday morning, the GoFundMe page has raised over $9,100.

See what others are saying: (KNWA) (Insider) (KFSM)

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