Apple vs Epic Games: The legal battle between Fortnite developer Epic Games and tech giant Apple reached somewhat of an intermission earlier this month when a District Federal Judge ordered Apple to give players an additional option to exit the gaming ecosystem to purchase digital tokens in a game. This technically should have counted as a win in Epic’s books, but it did not, and it has expressed its intentions to appeal to the High Court for the part of the lawsuit that it lost. Even though the High Court has not yet agreed to hear Epic’s appeal, it seems to be in the process. Meanwhile, Apple has, in a series of apparent emails, told Epic that its developer account will not be reinstated on the App Store until the lawsuit and its appeal process is over, even though it could take years to reach that stage.
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Epic Games CEO and Founder Tim Sweeney has shared emails from Apple on his Twitter account stating that Apple has refused to bring back Fortnite to App Store until the “the district court’s judgment becomes final and non-appealable”. This means that till the time both or either of the parties have the chance to appeal the decision, iOS users will not be able to play Fortnite on their Apple device.
Late last night, Apple informed Epic that Fortnite will be blacklisted from the Apple ecosystem until the exhaustion of all court appeals, which could be as long as a 5-year process. pic.twitter.com/QCD7wogJef
— Tim Sweeney (@TimSweeneyEpic) September 22, 2021
Epic has termed this move as Apple going back on its word. 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”.”
Meanwhile, in the mail, Cupertino wrote that it exercised its discretion to not reinstate the developer’s account for now. It also cited the judgement issued by Federal Judge Yvonne Gonzalez Rogers, in which she said that Apple had acted within its right to terminate Epic-related accounts after Epic intentionally violated the contract it had with Cupertino.
The Judge had also ordered Epic to pay damages to Apple for willful breach of contract, which Epic has done.
In a gist, as per Apple’s App Store policy, app developers can only use the App Store payment gateway for any digital tokens that are sold in apps, and on any transaction Cupertino has the right to charge 30% commission. However, Epic Games found this policy to be anticompetitive and so, breached the contract and added a third-party payment gateway in Fortnite for digital goods. Apple then removed Fortnite from the App Store and blocked the developer accounts of Epic Games, following which the developer filed an antitrust lawsuit against the tech giant.
Earlier this month, in a ruling, the District Court Judge ruled that Apple’s policy of only using App Store gateway was preventing customers from getting cheaper prices, and therefore, directed Apple to allow for an option where customers could either choose the App Store Payment Gateway for purchasing or they could leave the ecosystem and purchase the digital goods directly the developers on the web. While this could be a major blow to Apple as it could cost a major chunk of the revenue it gets from App Store, it would still count as a win for Apple, since the Judge also ruled that Apple could continue to charge 30% commission on the transactions that take place via the App Store payment gateway.
Epic has not been happy with the verdict, and has therefore expressed intentions of appealing the decision. On the other hand, while it may seem like Apple lost the verdict, if it were something that Apple was really bothered about, it would no doubt appeal the decision. However, the way things currently stand, Cupertino has said that it is still considering the appeal options, but at the same time, once the District Judge verdict came through, CEO Tim Cook told his employees that he was looking forward to moving forward after the ruling.
That is seemingly the best option for Apple, because other than the order to tweak its App Store policy and incorporate a third party payment option via the web, Apple has won on all counts that Epic had filed, including the judgement that Apple was not a monopoly and therefore, did not need to allow third-party app stores to run on its devices. As far as the third-party payment gateway option is concerned, at this stage, it is understood that that would be routed through the web, and if a consumer were to purchase digital goods in the game, they would get the option to either purchase it via the App Store (the way it currently works), or leave the game ecosystem to go to the web and purchase the token directly from the developer. The latter, frankly, seems tedious and unappealing, and is therefore not very likely to be popular among customers. This means that Apple might not suffer a major revenue loss after all.
With a verdict this good and this favourable, it would not make sense at all for Apple to appeal it, unless Cupertino is looking to really take on Epic for trying to malign the tech giant’s image. Still, even for Apple, that seems like too big of a gamble to go for. It is not very likely that Apple will file an appeal.
While Apple has not commented on Sweeney’s remarks on Twitter, it has not disputed the authenticity of the documents that the Epic Games CEO shared on the microblogging site.
With this, Epic’s aim to bring back to iOS App Store in South Korea seems to have failed. The developer was looking at the South Korean market because the country recently passed rules as per which alternate payment method support is required. But Apple’s move has also left the future of Fortnite elsewhere in the world, as without an active developer account, Epic would not be able to re-release the game anywhere.
However, Sweeney’s move to share emails is not likely to make its relations with Apple any better, and would only keep Fortnite off of iOS devices, much to the frustration of Apple-using fans of Fortnite. Epic is at the back foot for now with the ruling and among its fans, and the appeal is a gamble for the developer. However, Sweeney is still going to “fight on” in his own words.