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Apple does not need to return Fortnite to the App Store, referee rules

SAN FRANCISCO – A federal judge ruled on Friday that Apple did not need to reintroduce the popular video game Fortnite in the App Store, in a battle against Fortnite’s parent company, Epic Games, which is locked in an antitrust battle with the technology giant over its app store fees and rules.

Referee Yvonne Gonzalez Rogers of the Northern District of California said in her decision that Apple’s ban on the game could continue because Epic had broken the contract with Apple. There is a “significant public interest” in requiring companies to abide by contracts or resolve disputes in the usual way, she wrote.

But Judge Gonzales Rogers also said that Apple could not ban Unreal Engine, Epic’s developer tool, from its platforms due to “potentially significant harm to both developers and gamers” who depend on the software.

The mixed ruling showed the high cost of adopting a technological style like Apple, even for an established company like Epic. The 116 million people who have gained access to Fortnite through Apple’s systems will continue to be kept away while Epic and Apple prepare for a lawsuit in the case, which is scheduled for May.

An Epic spokeswoman said the company “is grateful that Apple continues to be prevented from retaliating against Unreal Engine and our game development customers.” Epic will continue to evolve for Apple’s platforms and “continue all the way to end Apple’s anti-competitive behavior,” she said.

A spokesman for Apple said the company was grateful that the court “recognized that Epic’s actions were not in the best interests of its own customers and that any issues they may have experienced were inherent in breaching the agreement.” The spokesman added that Apple’s app store has been “an economic miracle” that has created “transformative business opportunities” for developers.

Epic’s battle with Apple comes as the largest technology companies face their power. On Tuesday, House lawmakers said Apple, Amazon, Facebook and Google had exercised and abused their monopoly power to curb competition and harm consumers, and recommended that companies be restructured. European regulators have also opened an investigation into whether Apple’s rules for the app store are restrictive of competition. And in the coming days, the Ministry of Justice is expected to sue Google due to anti-competitive search methods.

At the heart of Epic’s case is Apple’s and Google’s tight grip on smartphone apps in their app stores. Both companies require developers to use their payment systems and pay 30 percent cut of the money they earn in their apps.

“They think they can just arbitrarily decide which apps can exist, and what fees can be charged, and tax all commerce,” said Tim Sweeney, CEO of Epic, in an interview last month. “We gradually came to the realization that we had to fight this, not only by words, but also by really broad actions.”

Epic has said that they want Apple to change the requirements for apps to use the payment system and pay a fee of 30 percent. It also wants to run its own app store within Apple.

The companies began fighting in August, when Epic broke Apple’s and Google’s rules by directing Fortnite users to their own payment service. Apple and Google responded by bringing Fortnite from their app stores. Epic then sued both companies, arguing that they were violating antitrust laws.

Apple later also cut support for Unreal Engine, Epic’s software development tool used by thousands of game makers. Judge Gonzalez Rogers said on Friday that Apple must continue to support the Unreal Engine and not be able to retaliate against any of Epic’s other related apps or products.

The fight has escalated in recent weeks. Apple has accused Epic of seeking a special deal for itself, while Epic has accused Apple of cherry-picking emails out of context in its legal response.

Other companies have used the fight to criticize Apple. Microsoft issued a statement in support of Epic and has announced a set of developer-friendly principles for its own app store. Facebook has also recently called out Apple’s 30 percent app fees.

Smaller app makers, who are usually skeptical about annoying the technology giants, have found strength in numbers. In September, more than a dozen of them, including music streaming service Spotify, dating service Match Group and Bluetooth tracking device maker Tile, formed an ideal group called the Coalition for App Fairness to push for changes in app stores.

In a hearing last month, Apple said it was willing to reintroduce Fortnite in its app store before a trial period if Epic wanted to return to compliance. Judge Gonzalez Rogers proposed a scheme that would place Apple’s Fortnite charges in a blocked account until after the trial. But Epic denied and argued that it would be to abide by a contract that it considers illegal.

“I did not buy the argument before,” Judge Gonzalez Rogers said during the hearing. “I’m not particularly impressed with it now.”

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