Epic Games released a Fortnite software update with Apple’s consent, faces legal battle.
Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California said the landmark antitrust lawsuit between Apple and Epic Games, maker of the popular game Fortnite, will likely go to trial in July 2021, citing the backlog of cases amid the coronavirus pandemic. In August of this year, Epic Games released a software update to its app that allowed users to bypass Apple’s proprietary in-app payment system, which went against its original contract with the software company.
A late-September hearing, which was livestreamed on the online meeting platform Zoom, was set to determine whether Gonzalez Rogers would grant Epic’s request for a preliminary injunction. Gonzalez told Epic more than once at the hearing she was “not persuaded by its arguments or its strategy.” She added, “Epic knew that it was breaching its contract with Apple when it published the update but did it anyway” and accused it of dishonesty.
Apple further argued its app store policies are in place to protect consumers from security risks and malicious software. Epic countered by asserting it is a reputable company “that has been on the iOS App Store for years and poses no security threat.” However, Gonzalez Rogers did not see the relevancy.
“You did something, you lied about it by omission, by not being forthcoming. That’s the security issue. That’s the security issue!” Gonzalez Rogers fired back. “There are a lot of people in the public who consider you guys heroes for what you guys did, but it’s still not honest.”
Epic’s attorneys acknowledged the breach of contract but claimed Epic made the move because it was “refusing to comply with an anti-competitive contract, and that forcing a legal battle was part of Epic’s plan.”
“When you are taking on the biggest company in the world, and you’re taking it on where you know it’s going to retaliate, you don’t lie down in the street and die,” said Epic’s attorney, Katherine Forrest. “You plan very carefully on how you’re going to respond.”
Epic Games has also alleged that Apple has routinely abused its power and the policies are a detriment to “innovation, competition and consumers.”
“Tens of millions of iOS users have been harmed,” Epic alleged in court documents, “by what it described as a retaliatory decision by Apple to remove Fortnite from the iOS App Store. The decision reflects Apple’s ironclad control and unlawful monopoly maintenance.” The company called Apple’s in-app payment system a form of “illegal tying.”
“But there is no tying going on with Apple’s in-app payment system,” Gonzalez Rogers responded. “I’m not particularly persuaded. I just don’t see this as a separate and distinct product. Walled gardens have existed for decades. Nintendo has had a walled garden. Sony has had a walled garden. Microsoft has had a walled garden. What Apple’s doing is not much different. It’s hard to ignore the economics of the industry, which is what you’re asking me to do.”
Epic’s CEO Tim Sweeney “is trying to be the Pied Piper of other developers,” said Apple’s attorney Ted Boutrous. “Epic wants others to cheat, breach [their] agreement [and] sneak in software to bypass app review.” A finding in Epic’s favor would be a “green light to other companies and that would be very dangerous.”