Epic Tells Court Its Apple Case ‘Had To Be A Big Fight’

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Epic Tells Court Its Apple Case ‘Had To Be A Big Fight’
Some characters from Epic's game Fortnite. (Screenshot: Epic Games)

We’re still waiting on a written decision from today’s court hearing between Apple and Epic, which was to determine whether to grant Epic’s temporary restraining order restoring Fortnite to the App Store and stopping Apple from removing developers’ access to Unreal Engine tools. As the court proceedings further drove home, there’s a lot to fight over in this case.

Watching the proceedings today over Zoom, the hearing seemed to veer wildly in both parties’ favours. Judge Yvonne Gonzalez Rogers said that there “appears to be some level of anti-competition” in Apple’s practices, and that Apple has “overreach[ed]” in going after Unreal Engine. At the same time, she noted Epic doesn’t have “clean hands” in terms of purposefully breaching its contract with Apple, a situation it could easily rectify. But, as CNN’s Brian Fung quotes, Epic “understood that in order to have this fight with Apple, it had to be a big fight,” one that compelled the company to knowingly and flagrantly break Apple’s rules.

I am inclined not to grant relief with respect to the games, but I am inclined to grant relief with respect to the Unreal Engine,” Judge Gonzalez Rogers said. She ended the hearing by promising a written decision “quickly.”

Epic and Apple met in court via Zoom, to determine whether Apple must return Fortnite to the App Store and not remove access to developers’ Unreal Engine accounts prior to a trial. Judge Gonzalez Rogers considered Fortnite and related Epic games as separate from Unreal Engine in weighing her forthcoming decision, and pondered factors such as the public interest, “irreparable harm” to Epic’s games and to Unreal developers, and the likelihood of Epic succeeding in its case. (She also took absolutely no shit and I love her.)

Lawyers’ arguments touched on many of the points Epic and Apple have already raised in their court filings. The fact that Epic knowingly broke the rules is not in dispute by either side, and even the judge acknowledged Epic created the situation it currently finds itself in. Epic’s lawyers admitted this is true, but continued to insist that Epic “should not be requited to comply with [Apple’s] anti-competitive” practices.

Epic’s lawyers discussed the harm that has already come to Epic from Apple’s decision, including players filing customer complaints and the possibility that they’ll leave the game if they can’t play with their friends when the new season launches on Thursday. Interestingly, one of Epic’s lawyers repeatedly called Fortnite a “social environment” more than a game, noting that such a space is particularly important these days as one where people gather together to play Fortnite, but also to watch movies and attend concerts. This view of Fortnite as a social space more than a game echoes past statements by Epic figures like CEO Tim Sweeney and creative director Donald Mustard, both of whom have been open about their desires to turn Fortnite into a “metaverse.” In court, this idea was deployed as evidence of how Apple’s actions are harming more than just Epic itself, a feeling Epic has been happy to stoke in-game and on social media. To me, while there’s something “think of the children” about all this, portraying Apple not just as a monopoly but as the big bad taking away your kids’ favourite game is an excellent tactic for winning public support. Apple looks heartless and intransigent the more it digs its heels in, and while public perception won’t determine the outcome of this case, it will certainly play a role in how both Epic and Apple fare in the aftermath.

Apple argued, as it has in its papers, that Epic knew what it was doing and that it doesn’t require court intervention for a situation it knowingly caused itself. Epic could solve this problem right now, Apple has argued, by simply removing its payment system. The seemingly deceptive nature by which Epic snuck its new payment system into the game via a hotfix came up several times in the hearing; in its papers, Apple’s lawyers referred to this as Epic’s “‘hotfix’ that turned into its hot mess.” In a previous briefing, Epic explained how the payment method got in the game:

Epic submitted Fortnite Version 13.40 to Apple for a pre-launch review on August 3, 2020, and it was launched to iOS users shortly thereafter. Version 13.40 integrated functionality that allowed it to support multiple payment options alongside IAP [Apple’s payment system]. When users sought to make a purchase, the app queried Epic’s servers as to which payment processors were available. If the server indicated only one processor, then the user would see that one option and continue with the purchase using that option. If the server indicated that more than one option was available, the user would be presented with a screen asking the user to select the desired payment processor.

On the morning of August 13, 2020, Epic’s servers began informing the Fortnite iOS app that an Epic direct payment option was available along with Apple’s IAP. Because Epic’s direct payment does not carry the 30% “app tax” that Apple imposes on transactions with IAP, Epic could offer reduced pricing to users that chose Epic direct payment.

Patch 13.40 was, notably, the one that introduced long-awaited cars to the game. With this context, its delay seems to me much more purposeful and intriguing than the inevitable development problems that plague Fortnite updates. Apple’s lawyers don’t see it this way, of course, with one pointing out that this move compromises the “safety” from malware and malicious code that Apple promises its customers and that its App Store policies are meant to protect.

Apple’s lawyers also took a different view of Fortnite’s playerbase, claiming Epic is holding Apple customers “hostage,” a read I don’t disagree with. However, Apple’s lawyers did admit that removing access to Unreal could potentially harm developers, which Judge Gonzalez Rogers said was an “overreach” of Apple’s powers. Apple’s lawyers defended the decision, as they have in their legal filings, by noting that Unreal developer accounts are related to Epic’s, and that in the past Apple has removed accounts connected to those that break the rules. One of Apple’s lawyers pointed out that Tim Sweeney has been clear about his desire to fight Apple and that Apple hadn’t “picked” nor “wanted” this current fight, portraying the company as simply following its own clearly-established rules. This is certainly true — everyone involved in this mess knew what they’d agreed to and knew what would happen if they stopped agreeing, as they now have.

But while the specifics matter the most to Fortnite players, as they’ll play a large part in whether or not Fortnite can come back to the App Store before the new season, they’re not the battle either side is ultimately fighting. All parties in today’s hearing acknowledged that the question at the heart of this case — whether Apple is engaging in anti-trust practices by forcing games and other apps on its platform to go through the App Store and use Apple’s payment methods — is a complicated one that won’t be solved by court proceedings about who broke what rules and who gets penalised. “This is not something that is a slam dunk for Apple or for Epic,” Judge Gonzalez Rogers said of the eventual case. In the meantime, we’re still waiting to see what the judge will rule.

Comments

  • “This view of Fortnite as a social space more than a game echoes past statements by Epic figures like CEO Tim Sweeney and creative director Donald Mustard, both of whom have been open about their desires to turn Fortnite into a “metaverse.” In court, this idea was deployed as evidence of how Apple’s actions are harming more than just Epic itself, a feeling Epic has been happy to stoke in-game and on social media.”
    The more this story develops, the more it really seems like a long pre-meditated move by Epic. Something that hasn’t been mentioned in the Kotaku articles yet is what this means in the console space. Epic has said “Oh, consoles are a completely different story.” despite them being the exact same premise of a walled garden taking a cut, but I feel like Sony, Microsoft and Nintendo are probably keeping some lawyers on retainer knowing that Epic’s capriciousness could see a knife aimed squarely at their backs.

    “Apple’s lawyers also took a different view of Fortnite’s playerbase, claiming Epic is holding Apple customers “hostage,” a read I don’t disagree with.”
    I completely agree, seeing as they are more than content to hold games hostage on PC in an attempt to force other storefronts (namely Steam) to pay the ransom of changing their policy.

    Either way I can’t help but think Epic is going thermonuclear (a la Apple’s declaration of thermonuclear war on Android) in an attempt to get what they want which, despite the claims of “better developer deals” is actually just more money for themselves. Problem is, instead of surgical strikes, they’re just wildly throwing them out with no regard for the fallout.

    • Except that Epic’s case is widely supported in the industry, including by Microsoft who has joined the court battle on Epic’s side. I know everyone’s a professional cynic nowadays, but seriously, enough with the “it’s all just rich companies fighting other rich companies” bullshit. There will unquestionably be a great many positive benefits for smaller developers and publishers if Epic wins this case.

      • Don’t be foolish. Epic is doing this for Epic. Nobody else. This doesn’t mean other companies won’t benefit from an Epic win, but for Epic that’s just gravy.

        • No offense John but you kind of prove his point with your own answer there:

          1. Yes, Epic is absolutely doing this for Epic, noones denying that.

          2. Other companies will benefit from this in the long run, absolutely, that’s a fact, really.

          3. For Epic, that’s a win as well because it makes them look good.

          I really think you’re both kind of arguing the same side needlessly. Epic is a big-ass company with a bad name at the moment who for better or worse, or whatever dubious motive, is actually doing ‘the right thing’, despite the hidden benefit to them. The fact is, it’ll have a positive bonus for others. Apple COULD come to the party on this, and like Steam could too, just lighten up their rules a little too. I guess in the end, it comes down to that a bit too?

          • I think I misread the intent behind “enough with the “it’s all just rich companies fighting other rich companies” bullshit.” bit.

          • Maybe John, but the greater point stands, Epics scum. Apples scum. But if lower tier developers win out of this? Good for ’em.

      • As if Mircosoft wouldn’t love an oppitunity to pile on its age old enemy especially after the failures of the Zune and Windows Phone. and Im sorry but but the last thing fucking publishers and the canerous sum that is mobile gaming “turning players into payers” need is more fucking benifits

    • “ The more this story develops, the more it really seems like a long pre-meditated move by Epic. ”
      That was made obvious on day one when they put out that Apple ad parody. No way they started making it when they found out Apple dropped them.

  • lets shift away from the evil vs evil rubbish guys, lets look at the facts:
    1. Apple forces people to use the app store and their payment platform on any Apple device, they often make the claim that they are getting extra value rather than just as a payments gateway, but that they advertise and review code, deal with taxes, and provide a more secure payment platform. Having dealt with Apple and the App store here’s what I know:
    a. They do not help with taxes in Aus (you have to fill out a bunch of US tax forms stating you are not in the US and submit them to Apple, then do your own taxes, while Apple pretend the profits are elsewhere to the Oz Gov.).
    b. The code is NOT reviewed nor does it appear the app is looked at by people in any way. This has been tested and shown numerous times by people submitting poisoned programs and being approved, people submitting pirated software etc.
    c. The advertising on Apple is pointless with no ability to target an audience effectively. You also pay additionally for this.
    d. The cost of hosting the App goes up with the more patches you do (or at least for a small developer they were going to charge us more), pushing a $300 per yr program into the $1000+ range, possibly up to $3k including the time it takes to do a submission (a painful process).
    e. Security – From the company that gave a random dude access to all the phone data for Jessica Simpson and other female celebrities? No thanks I’d rather use eWay, PayPal or even PayWay (they return waaay too much card data, westpac please fix)

    2. This is not the first time Epic has railed against the ‘walled garden’ approach of Apple, Tim Sweeney flew up Microsoft for their Windows S approach trying to force users onto programs only found in the Microsoft store and blocking external installers. Interestingly besides the fanboys of steam shouting about exclusives, every deal I have heard of Epic doing for an exclusive has been pretty good for the developer, they often guarantee a certain number of sales, knocking off the UE4 fees if you go with them etc. Yeah exclusives suck if you want to use one sales platform, but we have Origin, Ubishaft, and EA all installed, doing roughly the same things with less usability than Steam, Epic, or GOG.

    3. Apple’s forcing of the App Store and Apple payments – This is where it gets interesting, Epic did not remove AppStore payments, they merely introduced another way to pay and publicised it in-game. Some of the Apple agreements say that you cannot charge more if people buy your product or DLC using gift cards or on a different platform, I believe this is anti-competetive under Australian law as you are dictating what is happening outside your own ecosystem in deals that do not involve you. And they will take a 30% cut of the gross sale price, which is a very hefty chunk particularly if you are a small developer, that may actually be more than what it cost.

    4. Apple Removes Fortnite then removes all UE4 developers because they have an Epic account (which is totally removed from the payments system). This is where it gets really interesting – Apple are strong-arming not only the people who wish to play Fortnite, but any developer using the UE4 engine as *they may have Epic accounts* (well duh), irregardless of whether those developers have done anything wrong. The reason I say this is really interesting is because this is similar to the old techniques the Mafia used and could be considered racketeering as you punish a disconnedcted third party to try to strong-arm a first party. Add in that the UE4 engine is the entire bloomin source code and you can do what you want re: payments or any other part of the engine,. and it really is very unreasonable and they were ordered to unlock those apps and accounts by the judge VERY quickly.

    5. Google also binned Fortnite, but they may be in less hot water because they allow other app stores to work on Android, however they still force their own payment gateway onto anything on the google app store.

    An interesting situation, I wonder if the current American President will bail them out if it goes against them like the last one did?

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