Tag Archives: Epic Games

Judge Orders Apple to Allow External Payment Options

Apple,

The Epic v. Apple lawsuit feels like a never-ending one. Judge Yvonne Gonzalez Rogers said Apple must comply with an order to let developers add links and buttons to external payment options, denying Apple’s request for a stay, The Verge reported. As you may have guessed, Apple announced that it would appeal the Judge’s decision.

You can read a copy of Judge Yvonne Gonzalez Rogers’ ruling on The Verge. They have embedded it into the article. Here are a few key parts of the ruling:

…Having considered all the filings, and oral argument, the Court finds Apple has failed to satisfy its burden, and the request is framed is DENIED. In short, Apple’s motion is based on a selective reading of this Court’s findings and ignores all the findings which supported the injunction, namely incipient antitrust conduct including supercompetitive commission rates resulting in extraordinary high operating margins which have not been correlated to the value of its intellectual property. This incipient antitrust conduct is the result, in part, of the anti steering policies which Apple has enforced to harm competition…

…Further, even if additional time was warranted to comply with the limited injunction, Apple did not request additional time other than ten days to appeal this ruling. Thus, the Court does not consider the option of additional time, other than the requested ten days…

The New York Times reported that Judge Yvonne Gonzalez Rodriguez interrupted Apple’s lawyer, Mark Perry, when he argued that allowing developers to include links to outside websites within their app would take months to figure out.

According to The New York Times, Judge Yvonne Gonzalez Rogers said: “You did not ask for a few months. You did not ask for six months. You didn’t ask for a limited amount of time. You asked for an across-the-board stay, which could take three, four, five years.”

Apple is seeking a reversal of the Judge’s decision. The Verge reported that Apple plans to appeal to the Ninth Circuit for a stay, since it did not get one from Judge Gonzalez Rogers. According to The Verge, pending a stay of some kind, the injunction is scheduled to go into effect on December 9, 2021.

This really feels like a lawsuit that is going to be slowly moving through the courts for an indeterminate amount of time. I guess that’s what happens when two big companies decided to fight each other via the courts. Perhaps the result will be that whichever one of them has the most money will win by attrition.

Fortnite Will Not Return to the App Store Anytime Soon

Gaming,

Fortnite will not be returning to the iOS Apple Store anytime soon, The Verge reported. This was clarified by Apple recently in a series of emails between Apple and CEO and co-founder of Epic, Tim Sweeney.

Recently, Judge Yvonne Gonzalez Rogers issued a permanent injunction to Apple, to restrain Apple from “prohibiting developers from including their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and communicating to customers through points of contact obtained voluntarily from customers through account registration within the app.” That seemed to be in Epic’s favor.

In addition, the judge also sided in Apple’s favor, requiring Epic to pay damages to Apple in an amount equal to 30% of the $12,167,719 in revenue Epic Games collected from users on the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus 30% of such revenue Epic Games collected from November 1, 2020, though the date of judgement, and interest.” In short, the judge felt Epic Games had breached its contract with Apple.

Epic Games decided to appeal the ruling.

CEO and co-founder of Epic, Tim Sweeney, posted on the Epic Games website about this situation (and also tweeted about it).

Tim Sweeney wrote, Apple lied. Apple spent a year telling the world, the court, and the press they’d “welcome Epic’s return to the App Store if they agree to play by the same rules as everyone else.” Epic agreed, and now Apple has reneged in another abuse of its monopoly over a billion users. According to Tim Sweeney, Epic has paid Apple $6,000,000 as ordered by the court.

The blog post includes a screenshot from Tim Sweeney to someone at Apple. There is also a screenshot of a response from what appears to be a lawyer for Apple. The response briefly reviews the outcome of the case. The key points appear to be these: “Apple has exercised its discretion not to reinstate Epic’s developer program account at this time. Furthermore, Apple will not consider any further requests for reinstatement until the district court’s judgement becomes final and nonappealable.”

Epic Appealed the Ruling in Epic v. Apple Case

Gaming,

Epic has decided to appeal the ruling in the its case against Apple. Judge Yvonne Gonzalez Rodgers, of the United States District Court of Northern California issued a permanent injunction in the Epic v. Apple case.

The judge also wrote a judgement that includes a counterclaim in which she was in favor of Epic Games, on the Tenth Court for violations of California’s Unfair Competition Law and in favor of Apple on all other counts.

The judge also wrote in favor of Apple on Epic’s breach of contract. The judge required Epic to pay damages in an amount equal to 30% of the $12,167,719 in revenue Epic Games collected from users on the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus 30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgement and interest of law.

One could reasonably assume that it is the part that Epic doesn’t like. On the day the ruling was released, Epic Games CEO Tim Sweeney tweeted: “Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers.”

The Verge posted a copy of Epic’s appeal. Here’s the main paragraph:

Notice is hereby given that Epic Games, Inc., Plaintiff and Counter-defendant in the above-named case, appeals to the United States Court of Appeals for the Ninth Circuit from the final Judgement entered on September 10, 2021… and all orders leading to or producing that judgement, including but not limited to the Rule 52 Over After Trial on the Merits … and the Permanent Injunction… each entered on the same date.

Overall, I think this means that the Epic v. Apple case is going to continue its way through the courts. It might be the court case that seems as though it will never actually end.

The Battle Between Epic Games and Apple Continues

Legal,

Today, 9To5Mac reported a significant update to the legal battle between Apple and Epic Games – “Project Liberty”.

According to Apple, Epic Games hired PR firms in 2019 to work on a media strategy called “Project Liberty” aimed at portraying Apple “as the bad guy.” In October 2020, Judge Yvonne Rogers had concerns that Epic knew exactly what they were doing with the controversial Fortnite update, so this doesn’t come as a surprise.

Here is a quote from Apple:

Epic’s monopoly maintenance claim is premised on the notion that the antitrust laws preclude Apple from imposing conditions on the licensed use of its intellectual property, and impose on Apple a duty to deal with Epic on the terms preferred by Epic – to the detriment of other developers and consumers alike. But Apple has no obligation to license its intellectual property, aside from a limited exception not applicable here, businesses are free to choose the parties with whom they will deal, as well as the prices, terms and conditions of that dealing.

CNBC provided a summary of what Apple, and Epic, will argue in court. The case could be heard on May 3, 2021, (but the date could change due to the pandemic).

Apple will argue:

  • Its 30% commission is essentially the same as other online software stores like Google Play or stores for video game consoles and Apple’s fee has decreased over time.
  • It faces competition both for iPhones as well as other platforms to play games.
  • Its App Store policies have led to a boom in the software industry and result in greater safety and security for users.
  • The App Store is a core, integrated feature of the iPhone, and that using Apple payments for digital purchases is a key feature.

Epic will argue:

  • Apple forces consumers to bear high switching costs to stop using Apple products, locking them in.
  • As Apple has accumulated more customers and locked them in, the importance of selling software to Apple customers has grown.
  • Apple controls the only way to install software on an iPhone through the App Store.
  • Apple uses its App Review process, which manually screens individual apps, for anti-competitive purposes, removing apps for business reasons under the pretext of security.
  • Because some developers have chosen to raise iPhone software prices because of Apple’s 30% fee, it causes consumers to pay more, and Fortnite is an example.

North Dakota Lawmakers Reject Bill Pushed by Epic Games

Gaming,

The battle between Epic Games and Apple continues, this time in North Dakota. According to CNBC, the North Dakota legislature voted on a bill that – if passed – would require companies that make more than $10 million per year through app stores to be required to offer alternative payment processors for purchases through the app store, allowing developers to avoid Apple or Google’s cut. The bill would only apply to companies based in North Dakota.

Epic Games headquarters is in Cary, North Carolina. As such, I don’t see how this North Dakota bill would do them any good – even if it was passed into law.

The New York Times reported that in January of 2021, a lobbyist approached North Dakota state senator Kyle Davidson, who is a Republican.

Mr. Davidson said he had been given the draft legislation by Lacee Bjork Anderson, a lobbyist with Odney Public Affairs in Bismark. Ms. Anderson said in an interview that she had been hired by Epic Games, the maker of the popular game Fortnite and the plaintiff in lawsuits against Apple and Google over their app policies. She said she was also being paid by the Coalition for App Fairness, a group of firms, including Epic, Spotify, and Match Group, that has protested app commissions and is leading the push for app-store bills.

CNBC reported that the North Dakota Senate voted 36-11 against the bill. That means the legislation did not pass. If the North Dakota Senate has passed the bill, it would have then gone to the North Dakota House to be debated and voted on. The outcome of the Senate vote means the bill will not go to the House. CNBC describes the vote as “a victory for Apple”.

This isn’t the end between Epic Games and Apple. Apple Insider reported that there is a court date set on May 3, 2021, in the U.S. District Court of the Northern District of California. The court will hear the case of Epic Games v. Apple, Inc. It is a bench trial, not a jury trial. In short, the battle between Epic Games and Apple is not over yet!

Apple Files Countersuit Against Epic Games

Gaming,

In a move that should surprise absolutely no one, Apple has filed a countersuit against Epic Games. TechCrunch reported that Apple’s lawsuit alleges that Epic Games is in breach of contract. Apple is asking the court to award damages and prohibit Epic Games from attempting anything like this again.

This is the latest move in an ongoing battle between Epic Games and Apple. To make a long story short, this whole thing started when Epic Games created a direct payment option for its players. That decision could be interpreted as a way to get around Apple’s 30% payment that it collects from consumer payments made in Fortnite.

You can view an embedded copy of Apple’s countersuit on Scribd. Here is a small piece of it:

Epic’s lawsuit is nothing more than a basic disagreement over money. Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store. Epic’s demands for special treatment and cries of “retaliation” cannot be reconciled with its flagrant breach of contract and its own business practices, as it rakes in billions by taking commissions on game developers sales and charging consumers up to $99.99 for bundles of “V-Bucks”.

Apple is demanding a trial by jury “on all issues so triable”. Apple also has a list of things it wants the Court to do, including decreeing that Epic is liable for breach of its contractual obligations under the license agreement.

Apple also wants the Court to “enter a permanent injunction enjoining Epic, and all persons and entities in active concert or participation with Epic, from facilitating, assisting, or participating in (a) the continued operation of Epic’s unauthorized external payment mechanism in its apps, including Fortnite (b) the introduction of any further unauthorized external payment mechanism into any iOS apps, including Fortnite, and (c) the removal of IAP as an available payment mechanism for in-app purchases through any iOS apps, including Fortnite.”

If the Court decides to grant Apple that permanent injunction, I think it could have implications not only on Epic Games, but also on other gaming companies who have games on the App Store. To me, it sounds like a warning to other gaming companies about what Apple might do if they decide to make their own direct payment systems.

Epic Games Asks Judge to Return Fortnite to Apple’s App Store

Gaming, ,

There is a battle brewing between Epic Games and Apple. It started when Epic Games created a direct payment option in which Epic Games lowered the prices for consumers who used it. In short, the direct payment option could be seen as a way for Epic Games to get around the 30% payment the company collects from consumer payments made in apps like Fortnite.

Apple responded by terminating the Epic Games account on the App Store, The Verge reported. If you had Fortnite or Infinity Blade on your iPhone or iPad… well, you don’t have them anymore.

On September 5, 2020, the Epic Games Newsroom Twitter account tweeted:

Today we asked the Court to stop Apple’s retaliation against Epic for daring to challenge its unlawful restrictions while our antitrust case proceeds. This is a necessary step to free consumers and developers from Apple’s costly, anti-competitive control.

The tweet included a link of a PDF of Epic’s most recent legal request.

Previously, Epic filed a lawsuit against Apple. Bloomberg reported that U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple did not have to immediately reinstate Fortnite on its App Store. She also granted a temporary order blocking Apple from limiting game developer’s ability to access the Epic Games Unreal Engine.

The judge ruled that Epic’s problem is “entirely self-inflicted”, and that the sensible way to proceed would be for Epic Games to comply with the App Store guidelines and continue to operate as the case proceeds.

There is a difference between Epic’s new request and the previous one. The Verge reported that Epic claims that “Daily active users on iOS have declined by over 60% since Fortnite’s removal from the App Store”. Epic also said that iOS is the biggest platform for Fortnite, and that 63% of Fortnite users on iOS access the game only on iOS.

It remains to be seen what happens next. One thing is for certain. This back-and-forth between Apple and Epic Games is unlikely to come to a resolution that makes both companies happy. I think what it comes down to is whether a judge sees Epic’s loss of customers on iOS as self inflicted or as something caused by Apple.