Apple have issues a counter-suit against Epic Games in their on-going legal battle over Epic direct payment and the removal of Fortnite from the App Store; asking for compensation and damages as Epic Games’ actions were “little more than theft.”
As we previously reported, Epic Games announced that the price of V-Bucks, Fornite‘s in-game currency that can be bought with real money, would permanently be 20% cheaper on all platforms. However, on Android and iOS, a new payment method was introduced.
Rather than buying the V-Bucks through Google Play and the App Store respectively, Epic Games launched the “Epic direct payment.” “When you choose to use Epic direct payments,” the announcement explains, “you save up to 20% as Epic passes along payment processing savings to you.”
This is due to Apple and Google collecting a 30% fee through all V-Bucks bought on their respective platforms. As such, the 20% drop has not been applied to purchases made through them. Epic Games state that “If Apple or Google lower their fees on payments in the future, Epic will pass along the savings to you.”
Shortly after this announcement, Apple and Google both removed Fortnite from the App Store and Google Play Stores respectively due to Epic Games violating their terms of service.
Epic Games issued legal action against both, citing that they had a monopoly over their stores on iOS and Android. Apple had allegedly threatened to terminate all of Epic Games’ App Store developer accounts and cut off tools for development on iOS and Mac.
Epic Games may have been expecting action from Apple however, having made a parody of Apple’s own 1984 commercial; appealing to their fans to support them. Further, the #FreeFortnite Cup was recently announced; acting as “the final days of the entire Fortnite community’s ability to play together.”
Apple later accused Epic Games CEO and founder Tim Sweeney of asking for exception from the App Store terms and conditions. Sweeney tweeted that Apple’s statement was misleading, and presented screenshots of the alleged emails. Microsoft also filed a statement of support, favoring Epic Games.
In late August, Apple terminated Epic Games’ App Store developer account. This means Epic Games will no longer be able to submit new apps, or updates to existing ones (such as the Infinity Blade games).
Epic would successfully win a restraining order that month, denying Apple removing Unreal Engine-based games from the App Store (thereby harming developers who used the engine for their games). Epic Games later filed an injunction asking that Apple be prohibited from “taking any adverse action against Epic.”
“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 refers to when Sweeney attempted to ask for exception to the App Store’s terms, and that when rejected Epic Games “resorted to self-help and subterfuge.” They describe the falsely-labeled hotfix that added the alternate payment method as a Trojan horse, something Apple claims Epic Games had orchestrated.
“Unbeknownst to Apple, Epic had been busy enlisting a legion of lawyers, publicists, and technicians to orchestrate a sneak assault on the App Store. Shortly after 2:00 a.m. on August 13, 2020, the morning on which Epic would activate its hidden commission-theft functionality, Mr. Sweeney again emailed Apple executives, declaring that ‘Epic will no longer adhere to Apple’s payment processing restrictions.’ According to Mr. Sweeney, Epic would continue to use Apple’s App Store but would ‘offer customers the choice’ to pay Epic instead of Apple, effectively depriving Apple of any return on its innovation and investment in the App Store and placing Epic in open breach of years-long contractual obligations to which Epic and all other Apple developers have agreed.”
Apple described the hotfix that came hours later as “little more than theft. Epic sought to enjoy all of the benefits of Apple’s iOS platform and related services while its “hotfix” lined Epic’s pockets at Apple’s expense.”
After Apple enforced their terms, the “calculated and pre-packaged campaign against Apple” began (such as the 1984 parody and the #FreeFortnite Cup. This matched with Sweeney’s alleged threat against Apple that would be “on a multitude of fronts – creative, technical, business, and legal.”
Apple also highlight the pre-drafted 56-page Complaint was filed “mere hours” after Fortnite‘s removal. Apple also refute the claims of them having a monopoly over the App Store.
“For starters, Apple is not a monopolist of any relevant market. Competition both inside and outside the App Store is fierce at every level: for devices, platforms, and individual apps. Fortnite users can dance their Floss, ride their sharks, and spend their V-Bucks in no fewer than six different mobile, PC, and game-console platforms. And the business practices that Epic decries as exclusionary and restrictive—including “technical restrictions” on the App Store that have existed since it debuted in 2008—have vastly increased output and made the App Store an engine of innovation, with the number and diversity of apps, the volume of app downloads, and the dollars earned by app developers increasing exponentially over time. All the while, Apple’s commission only decreased while software prices plummeted and barriers to entry evaporated.”
Apple continue, explaining their need to evaluate every game on the App Store is to ensure the apps “meet Apple’s high standards for privacy, security, content, and quality.”
Continuing, Apple mention Epic Games “backed by the tech giant Tencent (which has its own competing app store, one of the largest in the world), also seeks to dismantle the App Store’s entire business model to advance its own economic interests without regard to the effect on other developers and consumers.”
Apple concluded, demanding compensation and damages from Epic Games, as well as preventing them performing similar actions in the future.
“Epic fired the first shot in this dispute, and its willful, brazen, and unlawful conduct cannot be left unchecked. Neither Mr. Sweeney’s self-righteous (and self-interested) demands nor the scale of Epic’s business can justify Epic’s deliberate contractual breaches, its tortious conduct, or its unfair business practices. This Court should hold Epic to its contractual promises, award Apple compensatory and punitive damages, and enjoin Epic from engaging in further unfair business practices. “