Apple Accuses Epic Games of 'Willful, Brazen, and Unlawful Conduct' in Countersuit Asking for Breach of Contract Damages

[Rogifan]

Getting it's product view by a billion users. Fortnite players would already know to look for this, but everyone one else, Epic would have to spend a fortune on advertising and still not have it app in front of so many people.

I don’t buy this. When is the last time you downloaded a 3rd party app BECAUSE of Apple? Base amp said they didn’t need Apple to reach consumers but obviously have no choice on iOS. Also what applies to Epic also applies to all the apps on the App Store that are free and pay Apple nothing. Apple knows micro-transactions in games are a cash cow and they won’t give up their cut of that unless they’re forced to.

 

[AppleMad98004]

Apple will likely win any and all of these suits and antitrust ones as well.

This is like letting someone come into your kitchen, use your appliances, power, gas, and space and then leaving without paying when you have a contract that says you need to rent the kitchen for $X for the night. It is theft.

It is a private platform not a public space, Apple makes the rules. They are not a monopoly because you don't have to develop for it at all. It is your choice too and they have less than 20% global market share. No where near control of the mobile market.

 

[dguisinger]

Interested to hear why its wrong for apple a public traded company to want to have more than one revenue stream? Do you see this as immoral?

Thats not at all what was said, but hey, keep missing the point

 

[djcraze]

Just reading the counterclaim ... there is so much wrong here.

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.

Except there is no other App Store on iOS and you must go through Apple to distribute apps. You can't even use open source SDKs without Apple being in the mix for distribution. That is a monopoly. This is very similar to IE and anti-competition back in the day.

It seeks free access to the Apple-provided tools that it uses and—worse yet—it wishes to then charge
others
for access to Apple’s intellectual property and technologies

Apple requires a $100 yearly fee to use their SDKs and to submit your apps to more than one device every 7 days. That is by definition not free access.

There is nothing anticompetitive about charging a commission for others to use one’s service

That's not what Epic is saying.

For the more than 80% of apps available to consumers for free on the App Store, this means Apple earns no commission whatsoever.

Commission, no. But there's no mention of the $100 yearly fee ... Which I feel like is omitted to make Apple look better.

Like, iOS is the ONLY platform that doesn't let you install apps that Apple hasn't vetted. Even Apple lets you install non-vetted apps on MacOS.

Is Epic being petty? Yes.
Is Apple being petty? Absolutely.
Is this whole thing stupid? You bet.
Does Apple have a monopoly on the software distribution on iOS? Yes.
Does Apple have the right to control what software is run on their own hardware? Maybe. But I'd like to think no.

I would love to be able to easily sideload apps like you can on Android. But I feel like Epic is more focused on money rather than the rights of developers.

 

[macfacts]

Except Apple isn’t the only railroad available

Apple has the only iOS app store. And apple coded iOS so they have that advantage.

 

[goudok]

When you get a job you sign an offer and get paid X, after realizing the company makes your X times 100000 you want 2X, you have two options. Renegotiate or quit. You can't just stop doing work unless you want to get fired.
Epic wants to renegotiate, Appl wants no part of that and Epic doesn't want to quit, because they know Apple is a huge revenue stream for them.

 

[Rogifan]

Interested to hear why its wrong for apple a public traded company to want to have more than one revenue stream? Do you see this as immoral?

It’s perfectly fine for Apple to have more than one revenue stream. I just happen to think rent seeking shouldn’t be one of them. In 2008 when the App Store was launched Steve Jobs said the company wasn’t looking to make money off it. That’s clearly not the case now.

 

[dwaltwhit]

Epic broke their contract purposefully to prove a point. Whether their point is valid or not seems moot.

 

[m11rphy]

Thats not at all what was said, but hey, keep missing the point

Happy to your explanation of what the point is?

 

[m11rphy]

It’s perfectly fine for Apple to have more than one revenue stream. I just happen to think rent seeking shouldn’t be one of them. In 2008 when the App Store was launched Steve Jobs said the company wasn’t looking to make money off it. That’s clearly not the case now.

So Apple should provide the App Store out the goodness of their heart? As it stands developers benefit from the App Store as does consumers and so does Apple seems to benefit all involved

 

[the8thark]

Apple knows micro-transactions in games are a cash cow and they won’t give up their cut of that unless they’re forced to.

Epic and everyone else also knows they are a cash cow. That's why so many free to play but full of IAP games exist.

Also as an analogy, I can't sell my product for free in your store and then say "for everything associated with my product please visit your competitors store for a great price".
You would kindly tell me "your product has been removed due to advertising competitors stores within your store"

Also the IAP 30% needs to exist to prevent the market being flooded with empty shells that all redirect you to non iOS sources to purchase things. Sure these shells exist on the iOS store but at least the developers can't use them as a loophole to avoid the 30%.

 

[djcraze]

Developing and maintaining iOS and the App Store costs money. Apple isn’t a charity. So yeah they want to make money for that work.

Explain MacOS then. You don't have to put your app in the AppStore to run it on MacOS. Same is true for any Android device. You don't have to use the Play Store (or equivalent) to run an app.

Apple makes their money from hardware, that has always been their business strategy.

 

[dguisinger]

Happy to your explanation of what the point is?

His response was to my comment about Apple's claim that EPIC uses 400 APIs from iOS and they need to pay for those APIs.

My comment was **I** subsidize the cost of phone and OS development by purchasing the phone. If the Apple Store is making tens of billions in profit and is paying for OS development, then stop charging me $1200 for a dang phone.

You can't turn massive profits on BOTH product lines, and say the "side business" is paying for the development of the core product. If they don't want to make APIs, they should get out of the OS business.

 

[Ethosik]

Point #1 assumes that the contract is enforceable. A contract is only enforceable if a Court rules that it is enforceable. Epic's argument is that the contract violates the Sherman Anti-Trust Act of 1890 and is therefore asking the Court to rule Apple's contract is unenforceable. Apple is claiming that it is not engaging in anti-trust behavior, and therefore the contract is enforcable. If the Court finds Apple's contract as unenforceable, Apple is not entitled to any damages or restitution. Likewise, if the Court finds Apple's contract as enforceable, then Epic's relationship with Apple is severed and they will likely owe very large legal fees.

So I can violate any contract ever created if I think its illegal? Then what is the point of a contract? Epic gets a pass by violating a contract just because in their eyes its illegal when it in fact is not?

 

[Rogifan]

Apple created a store and platform where people actually buy digital content. It's one of the most valuable properties in the world. That's why Epic is fighting. If the store was worth nothing (like the Windows Mobile app store) this wouldn't be an issue.

That still doesn’t tell me what the “tremendous value” is. If there was something special or better that could only be done on iOS but I’m not aware of anything. But how far do we want to take this? Should my ISP and cell carrier get a cut? Without the internet an iPhone would be pretty worthless.

 

[Ethosik]

Actually, a contract is enforceable UNLESS a court rules that it is UNenforceable?

I agree with you. I really don't understand some people here. Does this mean I can violate ANY contract possible if I just THINK its illegal?

 

[Rogifan]

Epic and everyone else also knows they are a cash cow. That's why so many free to play but full of IAP games exist.

Also as an analogy, I can't sell my product for free in your store and then say "for everything associated with my product please visit your competitors store for a great price".
You would kindly tell me "your product has been removed due to advertising competitors stores within your store"

Also the IAP 30% needs to exist to prevent the market being flooded with empty shells that all redirect you to non iOS sources to purchase things. Sure these shells exist on the iOS store but at least the developers can't use them as a loophole to avoid the 30%.

Except when Apple creates specific app categories that allow you to bypass IAP. Also it’s Apple’s choice to allow free apps on the App Store.

So Apple should provide the App Store out the goodness of their heart? As it stands developers benefit from the App Store as does consumers and so does Apple seems to benefit all involved

Well Steve Jobs said they weren’t looking to make money off the App Store. Developers pay $99/yr for a developer fee plus they pay for the hardware to develop apps for Apple’s platforms. Personally I think Apple should run the App Store at break-even and developers should be charged only what is necessary to cover the costs of running the store. I think all developers should be treated the same whether their app is free or costs something. I don’t think some indie developer should be subsidizing Facebook and Google.

 

[dguisinger]

I agree with you. I really don't understand some people here. Does this mean I can violate ANY contract possible if I just THINK its illegal?

Yes actually, there is nothing forcing you to stick to a contract until one side or the other takes it to court. People stick to a contract because they usually know they would lose and fear the repercussions, not because someone is holding a gun to their heads to stay in the contract.

 

[Ethosik]

Epic had their entire strategy planned before they ever flipped the switch on external payments: the "hot fix", the back-end for payments, 1984 commercial, court filings. All of it a choreographed publicity stunt. I'll agree that Epic had some limited success in stirring up resentment toward Apple (I chuckle at the thought of angry, enlightened journalists with a 5-figure student loan balance banging out anti-capitalism articles on their Macbook). Unfortunately, Epic's actions were clearly a conspiracy to defraud and denigrate Apple on a public stage - Epic doesn't even deny that they intentionally violated their business agreements with Apple. I hope for Epic's sake that the judge doesn't have a child addicted to Fortnite...

I said this before and I'll say it again - Epic needs to partner with phone manufacturers and stop making a spectacle of itself. Likewise - if Apple wants to maintain a "closed ecosystem" in the mobile space, it needs to partner with mobile telecoms to broadcast the idea that enhanced app screening and security reduce malicious network traffic and reduce attack vectors on those networks.

And this is why the counter-suit is necessary. Epic had all of this prepared. They KNEW they were going to break the contract and this would happen. If they KNEW it would happen, they can't claim "Ohhhh Apple is making our company lose sales and its harming us" - EPIC KNEW! They knew 100% this would happen. They did this to themselves, they are hurting themselves.

 

[rafark]

Sorry dude, I lived in those times as a computer engineer, Apple was a small company with less resources. Apple wanted to hold onto the Apple II and III sales because it was their cash cow at Apple. Steve wanted state of the art hardware, like the Lisa computer that cost $10000. The Sully was top CEO of the time, just because he sold soda does not make him a bad CEO. It is a business and those who have the best wins. So the judge said that Apple could not patient the look and feel of a product be it a windows OS and a mouse. Do you think today if I made a computer and took Apples code, which Microsoft had full access while writing Microsoft Excel in 1983 and made a system, you don't think that Apple would sue the pants off of me in court.

Steve learned a second valuable lesson when he created the NeXt company it is hard to get customers with a $10000 computer no mater how good it looks or works. People complain now about Apple hardware prices

Business is war.

10k was expensive back then, but so is 12k now (base Mac Pro + monitor with stand)..

edit: it’s actually 13k.

 

[Ethosik]

Yes actually, there is nothing forcing you to stick to a contract until one side or the other takes it to court. People stick to a contract because they usually know they would lose and fear the repercussions, not because someone is holding a gun to their heads to stay in the contract.

You must not do business. I can't just breach any contract I wish because I feel like it.

 

[m11rphy]

His response was to my comment about Apple's claim that EPIC uses 400 APIs from iOS and they need to pay for those APIs.

My comment was **I** subsidize the cost of phone and OS development by purchasing the phone. If the Apple Store is making tens of billions in profit and is paying for OS development, then stop charging me $1200 for a dang phone.

You can't turn massive profits on BOTH product lines, and say the "side business" is paying for the development of the core product. If they don't want to make APIs, they should get out of the OS business.

But why do you think that you buying a $1200 phone is paying for APIs? Does Samsung sell a $1200 and not make the OS that runs on it? Your $1200s pays for Apple to design, manufacturers, supply you with a phone and make themselves a profit. Same way Samsung does when they sell you a $1200 phone. They then have an additional business called the App Store where they invest money in APIs and the store infrastructure which developers provide Apple 30% of their revenue to pay for it and again make apple a profit. You are not subsidising anything for Apple

 

[mm1250]

Wrong, again. Apple is not only in the right, they typically win disputes of principle.

your in lalaland. The monopolistic practices will be coming to a halt. Not without a fight of course. Apples control of blocking other options for software installation and purchases without going through their toll is anti competitive and when your part of a duopoly, it won’t fly for long. Apple should be lucky they were able to drag it this long.

 

[the8thark]

Except when Apple creates specific app categories that allow you to bypass IAP. Also it’s Apple’s choice to allow free apps on the App Store.

If you are refering to the reader category of apps then yes you are correct. That's an issure that Apple needs to address as it's not equal for all developers.
Also yes Apple allow free apps on the App store. However IAP's really move the game from free to freemium and that should incure the 30%.

 

[Stewie]

I don’t buy this. When is the last time you downloaded a 3rd party app BECAUSE of Apple? Base amp said they didn’t need Apple to reach consumers but obviously have no choice on iOS. Also what applies to Epic also applies to all the apps on the App Store that are free and pay Apple nothing. Apple knows micro-transactions in games are a cash cow and they won’t give up their cut of that unless they’re forced to.

I see stuff all the time that pops up when I am broswing the app store that I would never go searching for on my own. I am pretty sure I am not the only one that does this. Otherwise the entire advertising industry would be out of a job. Basecamp is full of it. They would reach their existing cusomters, but new customers have to have some way to find them. You think the average person looking for a new email app will search for "Hey" or "basecamp"?