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Judge in Apple v. Epic Case Sides With Apple on Fortnite and Epic on Unreal Engine [Updated]
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I see this not as a split, the judge just needs more time to get of technical opinion various experts, and read a few news headlines...
If the 30% tax is worth Apple that much effort for a legal battle, then that precisely shows Apple is overcharging and undermines their case.
What about free apps or apps that don’t make much money? Are you going to have every developer pay for hosting? Besides, central billing system is one of the main advantages of the Apple ecosystem. As an Apple customer, I don’t want third-party payment options.
False equivalence. Apple is fighting for a consistent user experience. And personally I don't care what Apple charges, it just shows how lucrative their iphone ios market is. 30% is cheap to get into it.
Will take sometime, maybe a year, and I will probably on Android already by then, still researching...
I'm not privy to the contract but I bet that Apple's presence on Amazon's website is cheaper than others of the same presence.
Hey, have fun on Android, I'm sure you will like it. (I personally would never use it, but most of the world can't be wrong)
But today, given what we all know at this moment the outcome is unclear.
Apple is not fighting for the 30% tax. They are fighting for the right to set and enforce the rules in the App Store. Worst-case scenario for Apple is not having to lower the tax, it’s having to allows third-party exclusive access to iOS. That will likely destroy the iPhone as we know it.
By the way, talking about the tax. Let’s assume that the investigation will determine that 10% is more appropriate. How will that stop Epic (or any other player) from saying “oh, I am not paying that either”? Also, what would that mean for other Stores, such as Steam or Epic’s own store? Will they also have to charge 10%?
Even if (and that’s a big if) Epic wins they can’t claim damages during this as long as they choose to keep Fortnite off the App Store by refusing to remove the “hot fix” and return to the status quo of before they went rogue.
I am curious, what would it matter to you if there were third party payment systems? You could just choose to not use any app that doesn’t allow you pay with your iTunes account. If that market is large enough developers wouldn’t have to be forced to use it, they would support it or miss out on revenue. I ask because I have downloaded apps that have asked me to create accounts with the developer to use. That don’t allow me to sign in with say Google, Twitter, or Apple. I then deleted the app because I was sick of making new accounts for things on various random developer websites. If they added the ability to sign up with Apple I tried again. I get why developers want their own payment systems, and for some apps I already use it. Amazon is a prime example, see what I did there
Also, people forget that the fee is subsidising all the free downloads that use the exact same processing and hosting services as the apps you pay for. There are far more free apps than paid. So if there was a reduced cut for paid that will impact the ability to provide free apps.
That is hardly in the consumers interest at all.
Freemium apps are a way to extract a sale from a customer without them realising it. If epic were to use their own store for payment (which they were doing when they activated this new code) of in app purchases, they were basically defrauding apple of their cut of a saleable game.
Apple were hosting a free game that the dev was getting paid for and not giving anything to Apple. Whether that was done to protest or not, it’s fraud.
The investigation will not determine whatever percentage is more appropriate. The investigation will determine that Apple abused it control of App Store to suppress competition and extract an excessive rent. Apple will be asked to work with third party developers to make the app distribution market more open, transparent, competitive and secure.
Not concerned about free apps' developers get paid but worry about Apple's minimal costs. No wonder why nobody develops good, free, open-source apps on iOS. App Store has made them impossible.
I honestly don't think some people get this case. No one is arguing that Epic didn't violate the TOS, the discussion is about both the 30 percent fee and lack of options. Epic merely did such actions with the third party payment to show the effect it has on the industry.
I think the judge's conclusions regarding the respective factors (i.e. the factors the Supreme Court described in Winter v NRDC) to be weighed when considering a preliminary injunction (or TRO) are mostly right. But one such conclusion doesn't make sense.
So the judge's conclusions on the respective Winter factors break out like this:
Likelihood of Success on the Merits (for Epic): No, but serious questions do exist.
Irreparable Harm: No, regarding Epic Games account. Yes, regarding Epic International account.
Balance of Equities: No, regarding Epic Games account. Yes, regarding Epic International account.
Public Interest: No, regarding Epic Games account. Yes, regarding Epic International account.
The only one of those 8 conclusions I think is wrong is the yes regarding the Epic International account when it comes to irreparable harm. The judge says, in essence, that Epic hasn't established irreparable harm with regard to the Epic Games account because the problem is one of Epic's own making. It has caused Fortnite to be removed (and that account to be suspended) by violating its agreements with Apple. It can fix the problem by complying with its agreements with Apple.
But if that's the case, then the problem with regard to the Epic International account being suspended is also one of Epic's own making. They are separate accounts, but they are owned and administered by the same entity. They aren't owned by separate legal entities. The accounts use the same tax ID number and the same person is the registered account holder for each account. The problem is caused by Epic violating its agreements with Apple, though with the other account. The problem can also be fixed by Epic complying with its agreements with Apple.
The consideration of the balance or equities and the public interest factors are a little different for the different accounts. I think it makes sense to reach different conclusions regarding them. But without the irreparable harm finding (regarding the Epic International account) a TRO wouldn't (or isn't supposed to) issue even with the balance of equities and public interest factors weighing in favor of the party asking for a TRO.
Anyway, I think the judge's reasoning is brief (that's good in this context) and solid, save for the one finding I just described.
All that said, I think this is the Goldilocks result for Apple. It gets to keep Fortnite (and other Epic games) out of the App Store unless Epic complies with the rules and the agreements it makes. That puts some pressure on Epic while the case is ongoing. But Apple avoids the broader disruption that might be caused by potential lost access (for third parties) to the Unreal Engine. And Apple gets to be consistent when it comes to enforcement by having tried to suspend the associated (Epic International) account as it apparently has with other associated accounts (of developers who violated the rules) in the past and would presumably like to do with other associated accounts in the future.
So the judge's conclusions on the respective Winter factors break out like this:
Likelihood of Success on the Merits (for Epic): No, but serious questions do exist.
Irreparable Harm: No, regarding Epic Games account. Yes, regarding Epic International account.
Balance of Equities: No, regarding Epic Games account. Yes, regarding Epic International account.
Public Interest: No, regarding Epic Games account. Yes, regarding Epic International account.
The only one of those 8 conclusions I think is wrong is the yes regarding the Epic International account when it comes to irreparable harm. The judge says, in essence, that Epic hasn't established irreparable harm with regard to the Epic Games account because the problem is one of Epic's own making. It has caused Fortnite to be removed (and that account to be suspended) by violating its agreements with Apple. It can fix the problem by complying with its agreements with Apple.
But if that's the case, then the problem with regard to the Epic International account being suspended is also one of Epic's own making. They are separate accounts, but they are owned and administered by the same entity. They aren't owned by separate legal entities. The accounts use the same tax ID number and the same person is the registered account holder for each account. The problem is caused by Epic violating its agreements with Apple, though with the other account. The problem can also be fixed by Epic complying with its agreements with Apple.
The consideration of the balance or equities and the public interest factors are a little different for the different accounts. I think it makes sense to reach different conclusions regarding them. But without the irreparable harm finding (regarding the Epic International account) a TRO wouldn't (or isn't supposed to) issue even with the balance of equities and public interest factors weighing in favor of the party asking for a TRO.
Anyway, I think the judge's reasoning is brief (that's good in this context) and solid, save for the one finding I just described.
All that said, I think this is the Goldilocks result for Apple. It gets to keep Fortnite (and other Epic games) out of the App Store unless Epic complies with the rules and the agreements it makes. That puts some pressure on Epic while the case is ongoing. But Apple avoids the broader disruption that might be caused by potential lost access (for third parties) to the Unreal Engine. And Apple gets to be consistent when it comes to enforcement by having tried to suspend the associated (Epic International) account as it apparently has with other associated accounts (of developers who violated the rules) in the past and would presumably like to do with other associated accounts in the future.
Can you please explain to me how you see EPIC winning? Just by the App Store contract, you would think there would be a class action lawsuit with developers against App Store policy. As others have notated... 30% can seem pretty steep. But there are a lot of factors that go into that 30% with App Store support.
There's no way Apple is going to settle.
Epic isn't after a direct monetary payout, they want to:
1. Be able to use their own payment processing to avoid paying any fees to Apple
2. Be able to have their own Epic Game Store application downloadable through the app store so they can be the one charging developers a certain % fee for their games.
3. They want the Epic Game Store from #2 to have access to the same underlying aspects of iOS that the App Store has (automatic updates, push notifications, parental control support - their Epic Direct Payment option completely bypasses parental controls, possibly making your kid being able to spend 1000's of dollars of you even though you have payments disabled in parental controls)
Basically they want to be a full alternative to the App Store and want the developers their cut that's now going to Apple to go to them instead.
There's no way Apple isn't going to keep fighting to not allow 3rd party game stores that aren't regulated by Apple itself to be on iOS, that defeats the whole purpose of what iOS is built upon (privacy and security).
This isn't simply about a 30% cut being too high, this is about Epic wanting to be doing what Apple is doing, they want a piece of the pie of the huge game market on iOS.
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When people say, "fake news" they rarely mean "fake news". It is more like half-truth news. If we knew that information from the start the drama wouldn't have been as high.
That pricing discrepancy is a good spot - I don't think I've seen it noted elsewhere.
I guess Epic does pay some kind of third party payment provider (or if it does payment processing itself, it will pay Visa / Mastercard), so the number is probably illustrative of what it might choose to charge with a different payment provider. A quick Google shows Stripe and Paypal charging 2.9% each plus a $0.30 fee, which is in that ballpark of the difference.
This is what I mentioned the other day. Epic have to pay fees too, payment, international transactions, etc. It's just certainly no where near 30 percent of the overall cost.
There is already a developers' class action suit against App Store underway.
Apple iOS App Developers $100M Class-Action Settlement
WHAT WAS THE LAWSUIT ABOUT? Hagens Berman attorneys worked closely with current and former app developers to find out more about their experience selling their apps and digital products in the iOS App Store, including with respect to Apple’s potentially restrictive practices and distribution fees.
Unless App Store decompiles and inspects every app's assembly code line by line, "security" is ********. (Actual security is provided by the operating system with its restrictive APIs, not App Store)
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"Destroy iPhone as we know it" is right. I only like iPhones because they are locked down. I actually prefer some Android devices than the iPhone but the ecosystem of being locked down is the reason I went with iPhone. If that changes, I think iPhones would not be as popular. Why get a $1,000 phone when I can get a $500 Android? I get the iPhone now because its locked down, I am more safe. Sure there can be some apps that slip through, but its more safe than on Android.