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

[Appleman3546]

Apple filed a really sloppy answer and counterclaim...and it kind of ignores the elephant in the room regarding the purpose of anti-trust law. I hope Apple changes strategy at trial or summary judgment if it hopes to win, but to be honest it is likely that Apple won’t want to take the risk of having a court decide the fate of Apple’s App Store and the lawsuit will settle for Apple to ironically give special treatment to Epic. Regardless, so many countries are investigating Apple at this point for App Store anti-trust violations that Apple better come up with an alternative solution for iOS 15 anyway

 

[waquzy]

Epic make billions of $ from the app store. Apple makes billions of $ from Epic. If Epic stays off the app store, yes they will lose billions of $ every month BUT they will still be making billions of $ from other revenues, PC, Consoles and android. Where is Apple going to make up the billions of $ it's going to lose? they can't unless they increase prices to compensate what they going to lose.

It's common knowledge in the tech world that the app store is a cash cow for Apple. Software designers, program coders, server admins will tell you that it does not cost Apple millions upon millions to run the app store. One can only speculate how much of the billions of $ Apple made off Epic went into R&D of the Apple Watch or R&D of the latest airpods or R&D towards the next iphone or some other project.

In the bigger picture, Apple has more to lose than Epic does in my opinion. Watch price rises in apple products if Epic stays away from the app store.

The only difference is that Apple is 100 times bigger than Epic, what's a few billion for a 2 trillion company. If Apple wanted they could buy Epic Games tonight and get it over and done with. Epic Games is just a small fish when compared to Apple.

 

[Ethosik]

Yes you can.
Seriously what planet do you live on?

I had a Hitachi Windows smartphones on a Sprint business plan back in 2003.
It never worked properly, I argued with with Sprint who claimed they don't support the phone even though the box had their logo and the phone had their logo on it. I eventually declared they were in breach and stopped paying the bill. They sent me to collections, which harassed me for years but they never got a dime. Why? Because I declared them to be in breach of contract and neither side was ever willing to take it to court to enforce it.

You can't force someone to do something in breach of contract without court order, and even there you can drag things out and never get paid. Its all a balance of what is worth the effort you put into resolving it.

You don't get arrested and hauled to jail the day you walk away from a contract.

Who said anything about going to jail? You breach a contract - you get removed from the App Store or whatever consequences happen.

So contracts are just meaningless? I can just wake up one day, saying I want a dog in my "pet-free" apartment and get away with it if I deem their contract illegal? Without any negative actions against me? No I lose my apartment. I am not sent to jail

I can just wake up one day and breach my non-compete contract with my work without any negative actions against me? No, I will most likely get fired best case - worst case they can end up suing me for damages. I won't be sent to jail.

Just like we ended up having to pay when we left the data center in 2017. Just like if you leave Adobe's 1 year commitment 2 months in you get fined for it. Just like when our client had to keep paying the rest of their contract even though they didn't need the software anymore.

 

[bobenhaus]

This is turning out to be an battle of EPIC proportions.

 

[jlocker]

The only difference is that Apple is 100 times bigger than Epic, what's a few billion for a 2 trillion company. If Apple wanted they could buy Epic Games tonight and get it over and done with. Epic Games is just a small fish when compared to Apple.

Let's see how much interest a day on 2 trillion dollars, how long it would it take to buy the company alone on its interest it gets on it money. I am assuming not long.

 

[tegranjeet]

I'd guess there are developers that would let Apple take a 50% cut for that much free promotion, and I bet those developers would make a lot more in the long run.

I have a published app. If Apple offered 50%-70% for premium advertising, I'd definitely go for it.

This reaction shows how popular the App Store is, and Apple has every right to defend their creation. Now, you could say the App Store would be nothing without companies and indie developers making apps, and that's true. So yes we need a compromise. Is 30% fine? Depends on your business of course. Some will make it work, others won't.

Epic had it working, not sure why they want to squander it...

 

[Rogifan]

The "tremendous value" is the customer base that Apple has created through its hardware, software, advertising and philosophy. The lionshare of all mobile app revenue comes in through the Apple app store. Whether you like it or agree with it, you cannot dispute that the people who buy iPhones are far and away the people who spend money on Apps. This success didn't happen overnight or by luck, but by a great deal of effort. Access to that customer base is invaluable to any company that wants to make money. One need not be able to identify one specific killer feature that adds tremendous value to recognize that the combined experience has value to a large number of people willing to spend collectively a large sum of money. I don't understand why this is so difficult for some people to understand.

OK but if the argument is Apple is providing access to people who spend money...well they don’t get a cut of transactions involving physical goods or goods purchased via a browser. And they’ve created rules whereby certain digital goods can be purchased outside the App Store. Before smartphones existed would anyone have seriously argued that Microsoft and/or it’s OEM partners deserved a cut of all e-commerce? Should ISPs or mobile carriers get a cut? Without them smartphones wouldn’t be worth much.

 

[laptech]

The only difference is that Apple is 100 times bigger than Epic, what's a few billion for a 2 trillion company. If Apple wanted they could buy Epic Games tonight and get it over and done with. Epic Games is just a small fish when compared to Apple.

If that was the case then Apple would have done it already. No, they are taking the fight to Epic because they know exactly how important the cash cow is to Apple's long term finances.

 

[m11rphy]

Let's see how much interest a day on 2 trillion dollars, how long it would it take to buy the company alone on its interest it gets on it money. I am assuming not long.

Apple doesn’t have 2 trillion in the bank, 2 trillion is how much the company is worth based on their share. They do however have $200 billion cash in the bank so could easily afford the $17 billion epic is valued at

 

[GizmoDVD]

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.

Steve Jobs is dead.

 

[waquzy]

Epic had it working, not sure why they want to squander it...

Greed, that's why. Epic's problem is that they think they are bigger than they actually are... going against Apple, creating ads in advance, lawsuit etc. Schoolboy error, Epic got too cocky. There is no way they are going to win this. Epic failure by EPIC Games

 

[pasamio]

If that was the case then Apple would have done it already. No, they are taking the fight to Epic because they know exactly how important the cash cow is to Apple's long term finances.

Epic broke the terms of their contract, Apple enforced the terms of those contract by removing Fortnite from the App Store and telling Epic that if they didn't remedy the situation in 14 days that Apple would terminate it's contracts with them. Epic immediately turned around and sued Apple to try to justify their actions and Apple is replying to the suit brought against them.

In a sense Apple is repeatedly the reacting party in all of this, Epic are in the drivers seat. Apple's counter claims are essentially Epic broke their contract and we should be granted relief from Epic doing so including lost earnings, punitive damages and legal fees.

 

[Rogifan]

That's LITERALLY the deal the EPIC agreed to. No one tricked them into it.

What if Apple's AGREED cut had been 15% and then saw how much Epic was making and said, "we're going to up that to 30% now"?

Sure they do. They do not have to develop for Apple devices.

Look I said I’m not defending Epic. My questions are in general not about Epic specifically. Why is delivering an app outside the Mac App Store OK but not for the iOS App Store? Because more people use iOS devices than use Macs? OK so what is the number where it’s OK to have alternate distribution? Or do you think the Mac should be closed to distribution outside the Mac App Store?

 

[portland_bill]

Who knew Apple had so many school monitors buying their stuff.

 

[jonblatho]

If Apple wanted they could buy Epic Games tonight and get it over and done with. Epic Games is just a small fish when compared to Apple.

That would require Epic Games being willing to sell and, at this point, likely regulatory approval as well. Setting aside that Apple has never paid as much money in an acquisition as Epic would require to even consider a sale, I’d venture to say that Epic would say no even if Apple offered double its valuation of, what, roughly $20B?

Besides, buying Epic wouldn’t get regulators off Apple’s back, either, and if anything, it’d risk making it even worse. Buying a company in hopes that it’ll poof a problem — competition or otherwise — out of existence is not a good look when legislators are looking into regulating Facebook for doing, well, pretty much exactly that.

 

[4jasontv]

Look I said I’m not defending Epic. My questions are in general not about Epic specifically. Why is delivering an app outside the Mac App Store OK but not for the iOS App Store? Because more people use iOS devices than use Macs? OK so what is the number where it’s OK to have alternate distribution? Or do you think the Mac should be closed to distribution outside the Mac App Store?

It has nothing to do with numbers. Apple allows independent development on the Mac but not iOS.
[automerge]1599603697[/automerge]

That would require Epic Games being willing to sell and, at this point, likely regulatory approval as well. Setting aside that Apple has never paid as much money in an acquisition as Epic would require to even consider a sale, I’d venture to say that Epic would say no even if Apple offered double its valuation of, what, roughly $20B?

Besides, buying Epic wouldn’t get regulators off Apple’s back, either, and if anything, it’d risk making it even worse. Buying a company in hopes that it’ll poof a problem — competition or otherwise — out of existence is not a good look when legislators are looking into regulating Facebook for doing, well, pretty much exactly that.

No. But destroying Epic in the market would go a long way to stop other people from acting out of line.

 

[4jasontv]

Steve Jobs is dead.

Like Elvis!

 

[jarman92]

Best line in the filing: ”Apple admits that its advertisement for the Macintosh was ‘breathtaking’...”

 

[m11rphy]

Look I said I’m not defending Epic. My questions are in general not about Epic specifically. Why is delivering an app outside the Mac App Store OK but not for the iOS App Store? Because more people use iOS devices than use Macs? OK so what is the number where it’s OK to have alternate distribution? Or do you think the Mac should be closed to distribution outside the Mac App Store?

iOS and MacOs are 2 different prouducts, for as long as iOS has existed there has been people asking for it to have more MacOS features but most the point that it’s different and it’s designed to be used different. A company can have more than one product and these prouducts can be designed to work differently.
Apple may think that MacOS biggest flaw is that it can have software installed from anywhere and therefore when they created their new OS which is iOS they decided to correct that flaw.

 

[Tucom]

This is just Epic.

Plain and simple.

 

[pasamio]

Look I said I’m not defending Epic. My questions are in general not about Epic specifically. Why is delivering an app outside the Mac App Store OK but not for the iOS App Store? Because more people use iOS devices than use Macs? OK so what is the number where it’s OK to have alternate distribution? Or do you think the Mac should be closed to distribution outside the Mac App Store?

Because Apple decided that they wished iOS to work the way it does. In 2008, Steve Jobs stood on stage and said that he wanted Apple to be the gatekeeper to the device so that they could apply their own controls to what gets put on the device. I don't think it's a numbers thing because Apple did it in the second year the iPhone was released so the number of Mac devices out there certainly outnumbered the phone in 2008. Apple didn't make a secret that this was how it was going to work, it was in their announcement. Since then the iPhone has gone from single digit marketshare to roughly half of the market.

Apple have a right to license their intellectual property in the way they see fit. Apple set this up over a decade ago when they were a tiny player in the smartphone market and for the most part have kept it consistent. If we don't like what Apple is doing with their products, we have other options available to us to purchase. This isn't some shady business practice but in a sense reasonably transparent rules applied more or less consistently through human review processes.

 

[m4mario]

I am a developer. And Apple deserves its 30% cut for all its developer tools, APIs and App Store safety features, which is why App Store sales are higher than Play Store sales. The speed at which an individual developer can develop a high quality app and reach such a wide base of paying customers is unheard off. Mind you, to develop for the Windows platform, visual studio is $50 per month, just for the developer platform.

Asking Apple to cut down on its commission is like wanting to sell ice cream in Disney Land and not paying anything to Disney.

 

[Tucom]

Two companies being ******. At first I was team Epic in this mess... now I'm not really rooting for either of them.

That's an improvement.

 

[HiRez]

Apple says that it also provided advertising each time Epic released a new season for Fortnite, offering "free promotion and favorable tweets" to more than 500 million end users.

Not sure they should have put that one in there because it kind of implies Apple was giving Epic special treatment in this area, while decrying Epic asking for other forms of special treatment elsewhere. Not that Epic should get what they ask for but at some point Apple is going to have to explain its stance on "special treatment" because clearly it already happens in the App Store world. It's hard for them to say "we gave them special treatment over here" while also saying "it's ridiculous they're asking for special treatment, we don't do that" someonewhere else.

 

[cmaier]

Lol it's funny how Apple conveniently left out the fact that they used Infinity Blade for their own shameless self promotion of the iPhone's prowess over Samsung Galaxy way back in 2010:

To quote Jobs, "Wow, it's all on a phone!"

YOu don’t think Epic was THRILLED to be called out? That’s like being handed a pot of money. If it wasn’t them, it would have been someone else.