Home / Apple / Epic loses lawsuit to force Apple to reintroduce Fortnite in the App Store

Epic loses lawsuit to force Apple to reintroduce Fortnite in the App Store

A federal judge denied a request from Epic Games to force Apple to reinstate Epic’s Fortnite games in the App Store pending the outcome of an antitrust lawsuit.

U.S. District Court Judge Yvonne Gonzales Rogers also ruled in favor of Epic, permanently issuing an earlier interim order preventing Apple from retaliating against Epic by removing support for Epic’s Unreal Engine.

The antitrust lawsuit began Aug. 13 when Epic announced a discount policy and direct payment mechanism for Fortnite that Apple and Google said violated their respective terms of use. Epic CEO Tim Sweeney has long argued that the 30% commission the big companies charge for each gaming transaction is unfair, and that Epic should be able to sell its in-app items to players at lower prices. Epic only charges 1

2% as a fee for developers in their own store.

After Epic modified the iOS version of Fortnite so that players could make direct payments to Epic for virtual goods – without paying Apple’s 30% – Apple kicked Fortnite out of the App Store. It also said it would no longer support Epics Unreal Engine. Epic then asked the judge in Oakland, California, to reintroduce Fortnite and prevent Apple’s unreal action.

The mixed ruling means Epic is likely to lose revenue from Fortnite’s banning iOS during the antitrust lawsuit, but it means Epic’s Unreal Engine customers will not have to worry about their games no longer working on Apple’s iOS and Mac platforms. because Apple obtained technical support.

Epic may still reintroduce Fortnite at some point in the future by removing the direct payment modification that caused the ban. But it is unclear whether Apple will allow it or make Epic wait for a penalty period.

Epic Games said in a statement: “Epic Games is grateful that Apple will continue to be prevented from retaliating against Unreal Engine and our game development customers as lawsuits continue. We will continue to evolve for iOS and Mac under the protection of the law, and we will continue to do so to end Apple’s anti-competitive behavior. ”

The case can continue for years, but the decision on the temporary request for a restraining order may be an early indication of what a federal judge thinks about the benefits of the case.

In a statement, Apple said: “Our customers rely on the App Store to be a safe and reliable place where all developers follow the same set of rules. We are grateful that the court acknowledged that Epic’s actions were not in the best interests of its own customers, and that any issues they may have experienced were of their own nature when they breached the agreement. For twelve years, the App Store has been an economic miracle and created transformative business opportunities for large and small developers. We look forward to sharing this legacy of innovation and dynamism with the court next year. “

Epic swings on Apple.

Above: Epic swings on Apple.

Photo credit: Epic games

In legal papers, Apple claims that there is no monopoly, and faces competition in all markets, including gaming. In its counterclaims, Apple said that Epic could easily put Fortnite back in the store without the unauthorized payment system. Apple said that this damage to Epic because it was not in the App Store is a “self-inflicted wound.”

Epic claims that app distribution is an “aftermarket” derived from the primary market for the smartphone platform. Epic says the courts should look at the relevant antitrust market as the aftermarket, which has a unique brand and a unique market and is not part of a larger single product. Epic does not challenge Apple’s rights on the smartphone platform, only in the aftermarket, where Epic claims that Apple is behaving in a monopolistic way. It claims that Apple is cutting back on choices (such as downloading apps from websites) that are available to consumers in other markets.

Since Apple cut off Epic’s access to the App Store, Epic told the court that it has seen a 60% drop in its daily active users on iOS. But during a hearing, the writing seemed to be on the wall that the judge would favor Apple. The judge grilled Epic’s lawyers on why they thought Apple’s market was so unique when Fortnite shows up in many other places where it has to pay a 30% fee.

“If we look at the video game industry, of which your client is a part, it seems that 30% is the industry pace,” said Gonzales Rogers. “Steam charges 30%. GOG. Microsoft takes 30%. In the consoles cost 30% PlayStation, Xbox, Nintendo, GameStop, Amazon, Best Buy. Your client does not. Where is the lack of competition? “

Gary Bornstein, an external lawyer for Epic Games in Cravath, Swaine and Moore, said in the hearing that 63% of Fortnite players on iOS only play on iOS. He said that Apple has banned Epic from having its own store on Apple’s platform when there is nothing to stop it other than anti-competitive reasons.

Apple has noted that, based on the testimony of Epic CEO Tim Sweeney, approximately 90% of average daily gamers gain access to Fortnite through a competing platform. Apple also said that Epic benefits from Apple’s services, which is part of why it charges a fee. For example, Apple said that Fortnite has used more than 400 of Apple’s unique Application Programming Interface (API) frameworks and classes (such as Metal). Apple has said that they have also promoted Fortnite in the past.

A jury trial may begin in July 2021, but anchors are likely to extend further. Regarding the unreal part of the case, the judge said: “Epic Games and Apple have the freedom to sue this action for the future of the digital frontier, but their dispute should not create chaos for spectators. Thus, public interest predominantly weighs in favor of Unreal Engine and the epic affiliates. “

To work against Apple, Epic has formed the Coalition for App Fairness with other Apple critics, including Spotify, Tile, Basecamp, Blix, Deezer, Blockchain.com, SkyDemon, ProtonMail, Schibsted, the European Publishers Council and The Match Group.

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