Apple may continue to block Epic Games̵
In a 39-page ruling, Judge Rogers reiterates his previous finding that any damage Epic is currently facing Fortnite the business, or to the game’s reputation, is self-inflicted by Epic. The company led to the current situation when it issued a hotfix update offering a new Epic Direct Payments in-app purchase (IAP) system for Fortnite, a move that was in violation of the iOS App Store development contract with Apple.
“In short, Epic Games can not just break out ‘monopoly’ to rewrite agreements that are unilaterally beneficial,” writes Judge Rogers, denying Epic’s request for a restraining order. Fortnite to the App Store. “The current situation is of its own origin.”
If Epic really wants to protect iOS users’ access to Fortnite For now, as Judge Rogers writes and Apple has publicly agreed, it can simply release a version of the game with the breach of direct debit option removed. “To assist, the court even offered to demand 30 percent [payment required by Apple’s IAP program] be put on hold pending a settlement of the lawsuit which Epic Games flatly rejected, “the referee writes.” The refusal to do so suggests that Epic Games is not primarily concerned with iOS consumers, but rather has other tactical motives. “
Conversely, Judge Rogers also finds that any retaliation from Apple against Unreal Engine development on iOS will cause irreparable damage to the broader game development market, including companies not involved in the dispute. Although it’s a “close question” about Epics Unreal Engine and Fortnite developer agreements are really separate, in the end she found that “in terms of access to the developer tools (SDKs), Apple’s conclusion of separate agreements with separate entities seems to be reciprocal, especially where these agreements have not been broken in any other way.”
“The parties’ dispute is easily shrouded in antitrust allegations regarding the App Store,” Judge Rogers wrote. “It does not have to go any further. Apple has chosen to act seriously, and in doing so it has affected non-parties and a third-party developer ecosystem. In this regard, the shares weigh against Apple.”
Preview of the case going forward
By denying Epic’s request for a Fortnite injunction, Judge Rogers suggested that it was too early in the proceedings to say that Epic would probably succeed because of the arguments about Apple’s monopoly power. “Too many strangers remain,” she writes. “As the parties acknowledge, this case presents questions at the borders of antitrust law in the United States. Simply put, no analogous authority exists.”
At the same time, Rogers is obviously taking Epic’s arguments seriously, writing that the case “raises serious questions about the benefits”, and that “Epic Games has strong arguments” regarding Apple’s potentially monopolistic behavior.
One of the main issues for the trial will continue to be the definition of the relevant market which is allegedly monopolized here. Epic claims that it is fighting against Apple’s monopolistic control over the narrow “iOS App Distribution Market”, while Apple claims that “the relevant market must contain competing platforms where Fortnite being distributed and making money. “
Judge Rogers writes that both of these arguments are “plausible” at this stage. To Apple’s point, Rogers notes that “multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be financial substitutes that should be considered in any “relevant market definition” because they are “reasonably exchangeable” when used “for the same purpose.” “In general, she writes,” courts have explicitly warned against such a narrowing of the relevant market definition. “
While Epic has argued that other gaming platforms are not true replacements for iOS when it comes to Fortnite, Rogers writes that these arguments “have not been adequately tested.” But just the existence of such damages would not necessarily be enough to protect Apple from being declared a monopoly. This is because these substitutes may “not influence enough customers to make a price increase unprofitable,” the judge writes.
Deciding which side has the stronger argument in this regard will rest on the answers to a number of factual questions during the trial, Rogers writes, including: “How many iOS users own multiple devices; how many iOS users will switch to another device in response to a price increase, and how many vendors can afford to give up iOS customers altogether. “
Rogers also notes that Epic has not yet shown that Apple’s IAP system is illegally “tied” to the iOS App Store as a whole. On the contrary, Rogers writes that “the IAP system seems to be integrated into the App Store and has historically never been a separate product.”
But Rogers also notes that Epic “raises serious questions about the existence of separate demand for IAP-type services”, which could affect this legal decision. “In this regard, Epic Games’ strongest argument – unfortunately unexplored in the mail – lies with competition for other features provided by IAP, such as customer service, parental controls and security,” Rogers writes. “This evidence suggests that a more fully developed plate is likely to show demand for a separate product.”
Once the ground rules have been set and the status quo has been maintained, both parties will continue to prepare for a trial set to proceed next May. Users who want to play Fortnite on iOS before the test ends, they hope that Epic has a restructuring and decide to abide by Apple’s contract rules for the time being.