Epic Games Sought Side Deal for Fortnite Prior to Lawsuit, Apple Says in Court Filing [Updated]

[Cublah09]

Earlier this week, Epic Games levied a lawsuit against Apple after Apple pulled popular game Fortnite from the App Store for defying Apple's App Store policies surrounding in-app purchases, launching a legal battle between the two companies.

Apple in turn said that it would terminate Epic's developer accounts on August 28, prompting Epic Games to file a restraining order attempting to stay that removal. Apple today responded to Epic Games' lawsuit with its own court filing, arguing that Fortnite should not be allowed to remain on the App Store as the legal fight plays out.

According to Apple, Epic Games in June sought a special deal from Apple's Phil Schiller that would change the way in which Epic offers apps on the App Store. From CNBC:Epic Games CEO Tim Sweeney previously said that Epic was not seeking a special deal from Apple and was instead fighting for "open platforms and policy changes equally benefiting all developers," but it appears that Epic did attempt to establish a unique relationship with Apple prior to when the lawsuit was filed. "When Apple refused to fundamentally alter the way it does business to appease Epic, Epic resorted to sudden, unilateral action that blatantly breached its contracts with Apple," reads Apple's response.

Epic had asked Apple for permission to bypass the in-app purchase system and allow Fortnite players to pay for in-game currency directly, a request that Apple denied and a feature that Epic implemented anyway. According to Schiller, Sweeney emailed him on the morning that Fortnite changed the payment mechanism and said that Epic will no longer "adhere to Apple's payment processing restrictions."

Apple lawyers argue that the emergency stay that Epic is seeking is an emergency "entirely of Epic's own making," as Apple has said that if Epic removes the direct payment mechanism that it added to Fortnite, the game would be allowed to return to the App Store and Fortnite's developer accounts would not be disabled.

Apple has also likened Epic Games' behavior to a shoplifter. "If developers can avoid the digital checkout, it is the same as if a customer leaves an Apple retail store without paying for shoplifted product: Apple does not get paid," Apple said.

Apple's promise to terminate all of Epic's developer accounts and access to Apple tools on August 28 would impact the development of the Unreal Engine used in many third-party apps and games. Along with the pending account termination, Epic is not able to update Fortnite, which means that existing iOS users will not be able to take advantage of the next season of the game launching on August 27.

A court hearing is scheduled for Monday to determine whether Apple can remove Fortnite from the App Store for violating the App Store rules.

Update: In a tweet, Epic Games CEO Tim Sweeney called Apple's statement misleading because Epic's email also asked for the concessions to be made available to other developers.

https://twitter.com/x/status/1296918541627793411

Article Link: Epic Games Sought Side Deal for Fortnite Prior to Lawsuit, Apple Says in Court Filing [Updated]

You know, one thing people seem to forget in all this, Apple do create all the libraries and software to enable these apps to run on iOS devices, they don’t charge for it except for a $99 yearly fee, this comes with terms and condictions and rules for using this software and Epic broke those rules, seems clear cut to me, they entered into a contract and then broke it. Now what happens if Epic wins, Apple will be forced to look for other revenue streams and I can bet they will start charging for the use of their sofware, this will adversely affect indie developers, Epic already make a **** load of money from the App Store for virtual currency in my mind they are just being greedy.

 

[deevey]

Of course the consumers pays for it. Have you seen how high Apple profits are? We learned recently that big part of it is the huge profits from the App Store. We (consumers) pay for it. Competition (alternative app stores) is known to lower the prices.

Not necessarily. its only known that it will boost developers bank accounts. The cost savings will not necessarily be forwarded to the customer.

If another App Store opened - there is nothing stopping Epic or anyone else, deciding to keep the prices exactly where they were previously and just keep that extra 10, 20 or 30 percent to themselves.

 

[Coconut Bean]

You’re not making any sense. What credit card charging vendors 30%. Please list one.

Most credit cards charging vendors from 0.5-3%. I’m sure Apple Card also fall into this bracket, so what’s the problem? What’s there to understand again? You don’t have to pull number out of your ass because Apple already has its own credit card and the charging fee is more or less normal market rate, just as App Store fee.

If most credit card charging vendors 30% then nobody will complain when Apple Card charges the same, aren’t they?

Your example doesn’t make any sense, and your thinking is illogical.

None and that is the argument, only reason Apple charges 30% on App Store is because they have a monopoly and they can, not because they deserve it or must in order to cover their cost.

 

[Ethosik]

The antitrust lawsuit will put an end to mandatory 30% fee through Apple Payment method for subscription and in-app purchases. The customer is going to have more ways of making payments inside the third party application and the app store must not interfere with how it works.

And Epic could not sustain Fortnite having being a side loaded app. Which is why it came back to the Google Play Store earlier this year. People do not side-load.

 

[mrcloaked]

Some companies are fine.

 

[Ethosik]

Oh, cool! But since I like the Apple experience, I really want to see this come to Mac. And I hope they do Windows 10S one better and make it the only option people can use, because that means better security for all. Everyone wins!

You clearly missed the point. macOS seems to be headed down this route too. Requiring some settings in System Preferences to be changed, or a terminal command to be executed before.

 

[Piggie]

It would feel reasonable if the percentage was based upon how much money you are bringing in.

If I ran a store and you made an item which you asked me to sell for you, We won't sell that many, and I won't make much money from stocking your item, so we can agree that I get 30% of the sale price.

However, if you come to me with a sweet deal, and ask me to stock something really popular and they fly off the shelves as fast as we can restock them, and I make a ton of money from you, then I'd probably only ask 10% from you as your item is making me a lot of money.

Pretty sure most businesses would do deals like that, based upon money coming in.

Apple expect the same of suppliers, they want lower prices if they buy more.
Quantity always means lower prices as overall its more money.

Apple could do deals, asking 30% of me who might make apple $100 a year, seems crazy to ask 30% of someone who brings them in $100 Million a year.

 

[mrcloaked]

I've waited for this.

 

[Appl3FTW]

Epic has been exposed for who they are... they GREEDY.

BAN (insert gladiator thumbs down here)

 

[Piggie]

Epic has been exposed for who they are... they GREEDY.

BAN (insert gladiator thumbs down here)

Epic introduces a option that allows you, the customer to purchase their items as a reduced price.
Apple blocks this option, unless Epic removes this option and charges you a higher price.
Epic are the ones being greedy?

Interesting viewpoint.

So paying more for something due to Apple is a good thing for the customer?

 

[I7guy]

Epic introduces a option that allows you, the customer to purchase their items as a reduced price.
Apple blocks this option, unless Epic removes this option and charges you a higher price.
Epic are the ones being greedy?

Interesting viewpoint.

So paying more for something due to Apple is a good thing for the customer?
...

It's not about paying more. The app store has billions in revenue, and it doesn't seem there is a majority feeling that apps are overpriced or the customers are paying more. Cost is one thing to consider, convenience, security...yes they are good for the customer as well.

However, Epic has choices as so do customers. And this is Apples app store, Epic has to abide by the rules, which they didn't want to do. Hoping to force a legal decision. They may be disappointed.

So Epic entered this willingly, decided they didn't like the rules and are suing. So, yes, Epic is greedy.

 

[TiggrToo]

None and that is the argument, only reason Apple charges 30% on App Store is because they have a monopoly and they can, not because they deserve it or must in order to cover their cost.

People keep throwing around the word “monopoly” without knowing what the word means.

 

[Piggie]

I'll make a statement here, and please feel free, in years to come to tell me I was wrong.

Apple will be forced to have to change the current system either in pricing or what it wants to allow.
Be it this year, next year or in 5 or even 10 years time.
The exact current model is not sustainable.
30% for everyone (not that's it's everyone now, despite Apple saying it is)
No other means of loading apps on an iphone.
No other stores within the app store.
No streaming games services allowed.
etc etc.
Some of this, Apple will be forced to have to change.

If Apple does not have to change some of these things, and the app store stays the same for the foreseeable future, then please tell me I was wrong

 

[TiggrToo]

You clearly missed the point. macOS seems to be headed down this route too. Requiring some settings in System Preferences to be changed, or a terminal command to be executed before.

That’s your opinion. It by no means is it fact.

Personally it looks to me that they’re attempting to stabilize the OS by removing certain access that has been known to be problematic or a security risk (e.g. kexts or system level access).

They took a huge hit with several recent OS releases that quite possibly where less about the OS and more about bad kernel level extensions etc.

 

[Jimmy James]

So the Mac is a bad ecosystem and experience?

It’s not as secure as iOS. And I don’t carry it everywhere with me, concerned about whether it’s tracking my location.

 

[gavroche]

macOS is not licensed and never will either, and yet we don't have Apple imposing 30% cut on Netflix, Spotify, Disney+ etc there do we? And that will never happen either.

Look I appreciate your careful thinking on this and your sources, but the issue is complex and there are strong points on both sides, it's far from mere complaining, stupidity or ignorance.

In general I do agree with you that I don't see any way Apple can allow alternate App stores, as Epic is demanding, because of many things including security, privacy etc, but I wonder if Epic's request is more for legal purposes, so that they can demand Apple.

At any rate, many of the "complaints" are not just from users but from companies like Spotify, Netflix, etc, why is it ok for Apple to get 30% cut from Disney's Mulan on iOS but not on Mac? The model is wrong, obsolete and unethical, and hurts consumers and the industry and needs to be changed.

While I appreciate that you can see arguments from both sides, you lose me when you start saying that a model is unethical. its so aggravating that people now equate disagreeing with something to mean it's unethical, or a blatant cash grab, or any such harsh exaggeration language. People have very high expectations and demands of each new iOS version, and every year I read all the complaints and criticisms about the features, bugs, etc of iOS. I think we all want great new versions to come out. But that isn't going to happen if Apple loses money. We don't have to pay for new versions. Apple gives them out for free. They work hard to push the tech each year, and try to give developers the tools they need to succeed. They develop APIs that allow them to easily incorporate new OS features. They even create new programming languages. They don't charge developers for this (other than the nominal developer account fee). They want developers to succeed. It benefits all of us to have a vibrant OS, and great apps. If it was unethical for them to profit from doing so, why would they bother. At times it really seems critics would rather they lose money, and end up abandoning development. That is exactly what would happen if you guys had your wish, and Apple had to allow developers to install anything for free, and get no money for their efforts. What would be the point.

 

[trifid]

While I appreciate that you can see arguments from both sides, you lose me when you start saying that a model is unethical. its so aggravating that people now equate disagreeing with something to mean it's unethical, or a blatant cash grab, or any such harsh exaggeration language. People have very high expectations and demands of each new iOS version, and every year I read all the complaints and criticisms about the features, bugs, etc of iOS. I think we all want great new versions to come out. But that isn't going to happen if Apple loses money. We don't have to pay for new versions. Apple gives them out for free. They work hard to push the tech each year, and try to give developers the tools they need to succeed. They develop APIs that allow them to easily incorporate new OS features. They even create new programming languages. They don't charge developers for this (other than the nominal developer account fee). They want developers to succeed. It benefits all of us to have a vibrant OS, and great apps. If it was unethical for them to profit from doing so, why would they bother. At times it really seems critics would rather they lose money, and end up abandoning development. That is exactly what would happen if you guys had your wish, and Apple had to allow developers to install anything for free, and get no money for their efforts. What would be the point.

When you run into cases where Apple was taking 30% from Spotify every single month while doing nothing (music streams from Spotify's servers, Apple just did the payment processing), that's 30% of artist's money, where artists already struggle getting their fair share, to me that's an example on unreasonable unethical policy that needs change. Indeed, Spotify removed IAP, and currently Apple's workaround was to keep allowing these apps as "reader apps", there are tradeoffs, but at least there is no longer the 30% nonsense.

There is a balance here, it's not as you suggest that Apple would lose money for their efforts and end up abandoning development, heck Apple doesn't get 30% from Spotify or Netflix on Mac either, and Mac is doing fine right?

 

[cmaier]

When you run into cases where Apple was taking 30% from Spotify every single month while doing nothing (music streams from Spotify's servers, Apple just did the payment processing), that's 30% of artist's money, where artists already struggle getting their fair share, to me that's an example on unreasonable unethical policy that needs change. Indeed, Spotify removed IAP, and currently Apple's workaround was to keep allowing these apps as "reader apps", there are tradeoffs, but at least there is no longer the 30% nonsense.

There is a balance here, it's not as you suggest that Apple would lose money for their efforts and end up abandoning development, heck Apple doesn't get 30% from Spotify or Netflix on Mac either, and Mac is doing fine right?

“Mac is doing fine?” Mac has a tiny fraction of the sales of ios devices. People *love* the iOS appliance computing model.

 

[Phone Junky]

Epic introduces a option that allows you, the customer to purchase their items as a reduced price.
Apple blocks this option, unless Epic removes this option and charges you a higher price.
Epic are the ones being greedy?

Interesting viewpoint.

So paying more for something due to Apple is a good thing for the customer?

You're overlooking the part where the 'reduced price' was only 20% less than the original price thus netting Epic an extra 10%. So this savings for customers is actually more profit for Epic. Greedy? You be the judge.

 

[trifid]

“Mac is doing fine?” Mac has a tiny fraction of the sales of ios devices. People *love* the iOS appliance computing model.

Mac is doing fine as a business or else Apple would have shut it down. It's doing as well as iPads in terms of revenue if not better, and iPads were supposed to replace PCs or something 🤣

 

[springsup]

IMO:

- The payment thing is possibly negotiable. Apple doesn’t want every App to take credit card details, because it leads to a poor user experience and is an opening for fraud, etc. There are some limited exceptions, but the principle remains that offering your own payment processing should be the exception, not the rule. Additionally, there are costs associated with running the AppStore (e.g. the human-curated editorial content, across the world) and related services (e.g. iCloud and push notifications), and these are paid for by all Apps.

- The Epic Games Store bit is an absolute non-starter. Imagine Microsoft, Google, Facebook, Amazon, Twitter, the Chinese government, the Russian government, etc, all running their own AppStores - each with their own approval process, allowing any kind of malware or spyware, and Apps which misuse APIs. Apple would have absolutely no ability to police the Apps on their platform. Their only options would be to delist the entire store (extreme, and open to lawsuits), or to blacklist the specific App (easy to work around, especially if you can resubmit to a 3rd-party AppStore without Apple knowing). That would massively hurt iOS security and App compatibility, as well as the user experience.

 

[springsup]

“Mac is doing fine?” Mac has a tiny fraction of the sales of ios devices. People *love* the iOS appliance computing model.

smartphone sales in general dwarf consumer PC/laptop sales - it’s not any kind of testament to the App distribution model.

“according to preliminary results by Gartner, Inc. For the year, 2019 PC shipments surpassed 261 million units, showing 0.6% growth from 2018.”

Source: https://www.gartner.com/en/newsroom...cent-in-4q19-and-point-6-percent-for-the-year

“In 2019 the worldwide smartphone market fell by 2% to 1.37 billion units, compared to 2018.”

source: https://www.canalys.com/newsroom/canalys-global-smartphone-market-q4-2019

261 million units vs. 1.37 billion units, across all devices and operating systems.

 

[Riffz60]

Everyone is also

People keep throwing around the word “monopoly” without knowing what the word means.

How do Apple have a monopoly?

would you go to an Apple retail store and complain they’re a monopoly because they don’t stock Samsung phones? No, you go down the road to another phone shop.

if you don’t want an Apple App Store you can get a Samsung phone, or a google phone, or a blackberry or whatever else is out there.

You have plenty of choice available.

if the consumer decides to choose an Apple product they’re buying the Apple ecosystem. That is one of their biggest selling points and why so many developers want to be there.

 

[mrcloaked]

The simpler the better.

 

[trifid]

iOS has been incredible for me. My only wish is that it was locked down even further without the App Store like the original vision Apple had. It's a bit of a shame. Web apps are safer. I feel insecure with all these third-party applications from who knows where, this desktop-like file system they added (who wants that?), widgets, applets, keyboard/mouse support, what is going on? I miss the simplicity, I want it to be more like a microwave oven where you just push a button and that's it.

Not sure if you are serious or not, but all the so called security on iOS, I was surprised to learn so many apps constantly read the clipboard, and Instagram using camera in the background and that it took until iOS 14 to do something about it.