Epic Games Sues Apple
October 6, 2020
It seemed all too innocent when Epic Games announced the Fortnite Mega Drop on August 13, 2020. The Fortnite Mega Drop introduced direct payment on mobile. This was a new way to pay on iOS and Android without paying through the app store or the google play store. This meant if choosing to pay directly to Epic Games, it would give a 20% discount. That means the App Store or Google Play would not receive any part of the purchase. It went against the terms of service on both the Google Play Store and the App Store and was the catalyst to Fortnite’s removal from both digital distribution platforms and starting a multibillion-dollar battle.
Epic claims Apple violated US antitrust laws and exhibited monopolistic behaviors. Apple sent a letter to Epic Games letting the company know that if it does not comply with App Store rules and remove direct payment options from Fortnite, that all of Epic’s developer accounts and access to Apple development tools will be terminated on August 28. The court hearing occurred on August 24. When the hearing started, Judge Yvonne Gonzalez Rogers said, “Your client created the situations. Your client doesn’t come to this court with clean hands. Epic made a strategically and calculated move to breach and decided to breach right before a new season. So in my view, you cannot have irreparable harm when you create a harm yourself.” During the hearing, both sides were able to argue their positions, yet they argued on different problems. Epic Games focused more on why its games should be able to remain in the App store without changes. Apple argued why it should be able to block the Unreal Engine. Epic’s lawyer argued that reverting changes is asking them to require customers to pay more than they should in a competitive environment and it had antitrust implications. They also argued for the social aspects of Fortnite and that it was more than a game, but a vital way to communicate during the pandemic.
Apple’s lawyer argued that if the development of the Unreal Engine is allowed to continue, Epic games could take its bad behavior to other entities. Apple also claimed Epic broke Apple’s App Store model, profited by it, and placed customers in the middle. In response to this claim, Judge Rogers said, “The contract with Epic International has not been breached. Apple reached beyond its one contract with Epic Games and is using its hard leverage. It does look retaliatory. I don’t see any harm to Apple to restrain you from not impacting the Unreal Engine on that platform or the developer’s engine. It looks like overreach to me.” The judge has granted a temporary restraining order that will prevent Apple from blocking Epic’s access to development tools for the Unreal Engine. The judge will not prevent Apple from terminating the Epic Games developer account but will prevent Fortnite from being updated until Epic complies with the App Store rules. The ruling stated, “Thus, in focusing on the status quo, the Court observes that Epic Games strategically chose to breach its agreements with Apple.” The restraining order has gone into effect immediately.
As the hearing was wrapping up, the Judge said this will not end with a temporary restraining order. There is a long legal fight to come. Waukee High School Senior, Joe Crane, said, “I think Epic Games should cooperate with Apple.” The next hearing for the preliminary injunction is set to take place on Monday, September 28, 2020. This hearing definitely will not be the last.