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Epic Games Unlikely to Win Injunction in Ongoing Fortnite Battle With Apple, Jury Trial Possible

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Apr 12, 2001
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The ongoing legal dispute between Apple and Epic Games continued on today, with a preliminary injunction hearing taking place this morning. We're still waiting to hear the judge's official ruling, but it looks like Epic is not going to be granted an injunction to allow Fortnite back into the App Store as the case unfolds.


Many of the arguments that lawyers for Apple and Epic Games made were similar to the original arguments made in the hearing for the temporary restraining order, which did not exactly go in Epic's favor as Judge Yvonne Gonzalez Rogers, who is overseeing the case, declined to order Apple to allow Fortnite back into the store at that time.

Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.

In response, Epic claimed that consoles are "different" because the hardware is sold at a loss, but the judge was unconvinced. "There doesn't seem to be evidence supporting what you're saying," she said.

Epic said that it wants to create its own store to distribute apps on iOS, but Apple's anticompetitive behavior prohibits it. In response, Apple's lawyers said the request was an indictment of Apple's "entire business model" focused on the "safety, security, and privacy of its users."

Judge Rogers questioned Epic on when, exactly Apple became a monopoly given that its App Store rules have remained unchanged since the App Store launched, which Epic had no solid answer for, responding only that it was a monopoly when Fortnite came to iOS in 2018. She also said that walled gardens have existed for four decades and that what Apple's doing isn't too different. "They created a platform," she said.

She also reiterated that Epic Games made a "calculated decision" to defy Apple's App Store rules, and the court doesn't provide injunctions for contractual disputes. Epic was "not forthright," she said. "There are people in the public who consider you guys heroes for what you did, but it's not honest."

There was a suggestion that the 30 percent fee Epic is meant to be paying Apple could be put into an escrow account that would be doled out at the end of the legal dispute, which is one potentially way that Fortnite could make it back into the App Store in the near future, but it's not clear if the two companies will agree to that.

As noted by CNET, Judge Gonzalez Rogers recommended that Apple and Epic Games consider a trial by jury, which would ensure that the final judgement is better able to stand up to a future appeal. Apple and Epic will need to request the jury trial, however. Regardless of whether there is a trial by jury, the full case is expected to be heard in July 2021.

Article Link: Epic Games Unlikely to Win Injunction in Ongoing Fortnite Battle With Apple, Jury Trial Possible
 

fumi2014

macrumors 6502
May 21, 2014
251
1,302
California
I'm not a big Apple fan. I buy and love their products but some of their actions and stances over the years have been morally reprehensible.

However, I think Apple will win this case. They built a secure platform and they're free to charge what they like. Epic knew this when they first signed up. Why are they (and quite a few other whiners) complaining now?

Epic should build their own store if they're that bothered about it. They just want to use Apple's infrastructure but not pay for it. They don't even have a case, I believe.
 

WiseAJ

macrumors 6502a
Sep 8, 2009
679
1,580
PDX
I read a twitter thread of the hearing. Epic really doesn't seem at all prepared for this even though they are the ones that asked for it. I think they just assumed that it would be easy and they wouldn't have to provide any real evidence and just say "Apple is a Monopoly" several times.

I also love how the judge commented how no one is entitled to make billions of dollars.
 

mannyvel

macrumors 6502a
Mar 16, 2019
573
971
Hillsboro, OR
It's interesting that Epic believes that consoles are sold at a loss. That's been the industry myth for a long time, a myth that hasn't been supported by the facts. There are companies who do teardowns and look at the BOM, but if you look at the division financials only certain consoles are sold for a loss; Nintendo, for example, seems to be making money off the Switch hardware.
 

xb2003

macrumors 6502
Jan 18, 2016
381
168
MO
Epic glazes over the fact that every other platform in the world has the same 30% cut and disallows 3rd party storefronts because if they win this case, they will have precedence to force their Epic Games Store on all of those platforms. But they don’t want you to think about that yet.
 

Analog Kid

macrumors 603
Mar 4, 2003
5,484
3,875
I read a twitter thread of the hearing. Epic really doesn't seem at all prepared for this even though they are the ones that asked for it. I think they just assumed that it would be easy and they wouldn't have to provide any real evidence and just say "Apple is a Monopoly" several times.

This whole thing has the appearance of the trial being a means to another end. I'm pretty sure Epic knows they're not going to win these preliminary judgements-- they just need to keep the suit alive to fuel their "people's champion" image while they try to attack Apple by PR and through the legislatures. It's possible that they can convince a jury that Apple is a big bunch of meanies, but it looks to me like they're more trying to separate Apple from the pack and then rally other tech companies, congress and the public to corner Apple hoping to break them.
 

Icaras

macrumors 603
Mar 18, 2008
6,141
2,750
I think the judge knows that EPIC could have contested things differently without their open defiance stance. All they did was alienate all their Apple consumers, good luck getting that back.

Not to mention self destruct financially. What a waste of money and resources to create a mock video, litigate, and lose 100% of your revenue by getting cut off from the App Store.

This is the only image I can think of in this situation:

1601324944241.gif
 

Analog Kid

macrumors 603
Mar 4, 2003
5,484
3,875
It's interesting that Epic believes that consoles are sold at a loss.
That seems like a strange threshold to set anyway. So if PS2 is sold a dollar below cost, Sony can set a 30% fee on game distribution but if PS2 is sold a dollar above cost they can't?

Nope, this argument, just like the "monopoly in iOS application distribution" argument, is looking for line to draw-- no matter how meaningless-- to focus on one particular company at a time.
 

az431

macrumors 68000
Sep 13, 2008
1,790
5,049
Portland, OR
This went about how I'd have expected it to. I think a jury trial is what Epic is after here, which is why they're pushing so hard on the PR front to set peoples minds before the trial begins.

This case won't make it to trial. Epic first has to somehow convince the judge that the "iOS App Distribution" is a "market" within the meaning of antitrust law, and that in-app purchase is separate product that Apple is tying to developers use of the "iOS App Distribution Market."

Aside from Epic's attorneys, you'd be hard pressed to find any attorney that gives Epic a snowball's chance in hell of proving either one, let alone both.
 

The Barron

macrumors 6502a
Mar 5, 2009
513
405
Cry us a river, Epic. Be off and open your own app store & see how that works sans Apple. Go Apple!
 

WiseAJ

macrumors 6502a
Sep 8, 2009
679
1,580
PDX
It's interesting that Epic believes that consoles are sold at a loss. That's been the industry myth for a long time, a myth that hasn't been supported by the facts. There are companies who do teardowns and look at the BOM, but if you look at the division financials only certain consoles are sold for a loss; Nintendo, for example, seems to be making money off the Switch hardware.

I still don't understand why it matters if the devices/consoles are sold at a loss or not when it comes to the 30%. 30% is still 30% and it's the platforms right to set what commission it feels is right and developers can choose if they want to agree to that and distribute on that platform or not.
 

Analog Kid

macrumors 603
Mar 4, 2003
5,484
3,875
This case won't make it to trial. Epic first has to somehow convince the judge that the "iOS App Distribution" is a "market" within the meaning of antitrust law, and that in-app purchase is separate product that Apple is tying to developers use of the "iOS App Distribution Market."

Aside from Epic's attorneys, you'd be hard pressed to find any attorney that gives Epic a snowball's chance in hell of proving either one, let alone both.
Yeah, I'd tweaked my wording a bit after you quoted me-- I don't even really think they're "after" a jury trial, but it's the best they could do from this course of action. I think they're after the theater of a court case, first and foremost.
 
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