Judge in Apple v. Epic Case Sides With Apple on Fortnite and Epic on Unreal Engine [Updated]

[pasamio]

The saga continues ... I'll bet the Judge makes a Decision soon, within weeks.

Hours even, apparently the order is out and Apple can remove Fortnite but must leave Unreal Engine alone.

The problem is that if the reason that it is inappropriate to cancel the agreement with the second company is that it is an independent company, then that second, independent company needs to come to court and ask for relief. It makes no sense for Epic to say “that’s another company and we demand the court do something to help that other company which we have nothing to do with.”

Either they control that company or they don’t. If they do, then the other company should suffer the same fate as the first. If not, then Epic has no standing to ask for the court to do anything about it.

Seems the judge disagrees, at least for the purposes of a temporary order. I haven't been able to find a copy of the order online yet, only a reference from the tweet linked above. It'll be interesting to read in full though.

 

[Realityck]

Since all the videos disappeared at least Bloomberg has some transcript of what was said in this article, also added some court documents

Apple Judge ‘Inclined’ to Unblock Epic’s Unreal Engine But Not Fortnite - Bloomberg

Case 4:20-cv-05640-YGR Document 47 Filed 08/24/20 Page 1 of 1 (Motion hearing)
Case 4:20-cv-05640-YGR Document 48 Filed 08/24/20 Page 1 of 8 (Order on Motion for TRO)

Portion of the live session that was most interesting with U.S. District Judge Yvonne Gonzalez Rogers.

The bigger issue in the case is whether Apple’s control over its App Store amounts to a monopoly. Apple isn’t alone in taking a commission. Rogers noted that Epic takes a 12% cut from third-party game developers in its store that offers computer games.

“The definition of the market will be an interesting and complicated issue.“ Rogers said. “The battle here will not be won or lost on a temporary restraining order” or a preliminary injunction, she said.

Apple’s lawyer defended its App Store policies, saying they take into account other stores and mobile platforms.

“Apple, while a serious and ardent competitor in that arena, is nothing approaching a monopolist once you look at the entirety of the situation,” attorney Richard Doren said.

But Rogers said iPhone users can’t make app-based purchases from Amazon and other mobile platforms.

“So the question is: Without competition, where does that 30% come from?” the judge said. “Why isn’t it 10, 15, 20? How is the consumer at all benefiting from the fact that you get to say what you want it to be?”

Of the 2.2 million apps available on the App Store, the 30% fee is billed to more than 350,000. Apple reduces the fee to 15% after a consumer uses a subscription for more than a year.

Cutting off Epic from Apple’s iOS and Mac developer tools would mean the gaming company can no longer distribute Unreal Engine to other developers, Epic said Sunday in a court filing. Microsoft Corp., which makes the Xbox, uses the technology for games developed for consoles, PCs and mobile devices and is backing Epic in court.

Apple has said that Epic Chief Executive Officer Tim Sweeney sought a “side” deal seeking an exclusive storefront for Fortnite, a move that Apple executives argued would fundamentally upend how the App Store works. Sweeney maintains he wasn’t asking for special treatment but for Apple to make the same option available to all developers.

The case is Epic Games Inc. v. Apple Inc., 20-cv-05640, U.S. District Court, Northern District of California (Oakland).

 

[ikir]

If apple allowed users to download and install apps outside iOS App Store this would be a mute point.

BTW - u can install apps on android outside the play store.

and gets malware has it happened last year with Fortnite on Android

 

[Realityck]

IV . CONCLUSION. (from Order on Motion for TRO)
Accordingly, for the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART
the motion for a temporary restraining order

THEREFORE, APPLE AND ALL PERSONS IN ACTIVE CONCERT OR PARTICIPATION WITH APPLE, ARE TEMPORARILY RESTRAINED from taking adverse action against Epic Games with respect to restricting, suspending or terminating any affiliate of Epic Games, such as Epic International, from Apple’s Developer Program, including as to Unreal Engine, on the basis that Epic Games enabled in-app payment processing in Fortnite through means other than IAP or on the basis of the steps Epic took to do so.
For the reasons set forth above, and the parties’ agreed-upon briefing schedule, this temporary restraining order is EFFECTIVE IMMEDIATELY and will remain in force until the Court issues an order on the motion for preliminary injunction. Neither party has requested a security bond and the Court finds that none is necessary as contemplated under Fed. R. Civ. P. 65(c). See Connecticut Gen. Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878, 882 (9th Cir. 2003) (“The district court is afforded wide discretion in setting the amount of the bond, . . . and the bond amount may be zero if there is no evidence the party will suffer damages from the injunction.”).
Finally, as discussed at the August 24, 2020 hearing and reflected in the minutes therein, the Court ORDERS a briefing schedule on a motion for preliminary injunction as follows:

1. Motion for preliminary injunction filed on or before September 4, 2020;
2. Response to motion for preliminary injunction filed on or before September 15, 2020;
3. Reply in support of motion for preliminary injunction filed on or before September 18,
   2020; and
4. Hearing on the motion for preliminary injunction is set for Monday, September 28, 2020
   at 9:30 a.m. PDT via the Zoom platform. The link will be posted on the docket. This Order terminates Docket Number 17.
   IT IS SO ORDERED.

Dated: August 24, 2020

 

[RRZEurope]

"asking us to require consumers to pay more than they should.."

That is a big lie ! ... they could charge everywhere the same, if they paid anyone (apple, google, sony,..) 30% ist would only lessen their profit!!

 

[Mr.Blacky]

No, most purchases actually have a 0% cut.

30%: applies to purchases that are actually consumed on the apple device -> everything you purchase on the app store, subscriptions for applications that are consumed on an apple device (Spotify/Google play music/etc...) and then inside of apps things like app feature unlocks, in-game currency, skins for your game character,...

15%: Video streaming services like HBO/Amazon Prime Video/Netflix/Hulu/etc... and other subscriptions in 2nd year.

0%: basically everything that's not consumed on an apple device (Food ordering, regular shopping, ...)

Wait, I thought only Amazon was getting the 15% treat?

 

[Barkóczi János]

The mobile market is different from the traditional market. Even if Amazon and eBay rule the online market as a seller you can skip them and you're still able to reach the whole world and all the customers with your own small webshop.Obviously it's harder but it's possible. That's we called free market.
Unlike the mobile market where if you don't accept Apple's policy you'll lose half of the US market and won't able to reach them any other way on mobile.

Going to mobile market is crucial for the majority of the businesses and you have no choice but obey the two giants. It's an enormous power which was never seen before. The mobile market becomes bigger in every year and this two companies have absolute power over it. We reached that point when there's no chance to a competing platform on mobile.
Even Microsoft failed who has more experience at building an OS than everybody else.
No matter how good is an OS users won't use it because there'll be no apps on it and devs won't develop to it as there's no users. It's an unresolvable dead lock after "the critical mass" of the apps. Users won't choose an option where there're less apps. Once we accept this statement it's obvious that the mobile market should be regulated and should be free.
If Epic fails that means every company who want to go to mobile market should obey the one-sided policies of Google and Apple and forever and they won't have any legal defense against them as they "accepted" their policies.

 

[Madonepro]

Surely Apple can decide what it will have in it's shop? What if the App Store was to be discontinued by Apple, are Epic going to sue that the house they wanted to go, is no longer there!

 

[Tovenaar]

This whole thing feels like a goose that lays the golden eggs situation. Apple has created something absolutely fantastic for everyone: users, developers and themselves. I know there are some losers and situations where some apps don't make financial sense but there always are, you can't satisfy everyone.

And now everyone is digging into the goose to extract more eggs, but they're going to end up killing it.

As a user, I'm horrified by the prospect of another app store. People who argue about choice aren't living in the real world. In reality people will go to where things are cheapest and we'll end up with an app store that's full of buggy, badly developed software. In case you think I'm fear-mongering, just recall what the Android app store looked like a few years ago.

20 years ago I used to work for one of the big-4 accounting firms, and one of the partners there was this really old, extremely experienced tax partner who was the go to guy for those really obscure tax law issues. He knew it all and he worked with clients daily to try to reduce their tax bill. But his message to clients was always the same: "Tax is a good thing! It makes the government your partner and incentivizes it to work hard to help you become more profitable."

Apple's cut is what makes Apple work so hard to make the app store a great place full of quality apps. Otherwise their 30% of nothing will be nothing.

But unfortunately we want our golden eggs now. We're going to nitpick and talk about freedom and right to choose and little good it will do us when our apps are crashing and stealing our data and payment involves a dozen steps and we have no easy way to cancel subscriptions except to call some phone number where no one answers...

 

[Barkóczi János]

Surely Apple can decide what it will have in it's shop? What if the App Store was to be discontinued by Apple, are Epic going to sue that the house they wanted to go, is no longer there!

iPhone users would drop their phone. Fortnite users would still play Fortine but on an other phone.

 

[Barkóczi János]

30% is an industry standard but it's an interesting story how it became an industry standard. Nintento asked 10% from devs to enter their market, and later for an additional 20% they started to distribute their products on physical cartriges which wasn't cheap at all. With time consoles started to use the cheaper optical disks and the more cheaper digital distribution but the 30% cut wasn't changed with time and it become industry standard.

 

[CarlJ]

I think this (the judge’s decision inclination in the story) seems reasonable for now. It’s not fair that devs who had nothing to do with this spat between Apple and Epic are caused problems not of their own making - and then it’s going to be for the longer court case(s?) to decide upon the issues Epic have er... ‘brought up’ in their own way...

The devs would be caused problems entirely of Epic’s making. Epic is holding the devs hostage, and the judge is allowing it. They could have launched a lawsuit without taking hostages. Is that now going to become a new legal tactic?

 

[firewood]

If apple allowed users to download and install apps outside iOS App Store this would be a mute point.

Anyone can already download and install apps outside the iOS App Store.

That's as long as those apps are distributed in the form of a buildable Xcode project and/or full source code. A $99 Developer enrollment allow you to install and run any apps you want (your own, or any with source code) for a full year. So I consider the Apple developer enrollment just as part of the basic full purchase price of a Mac. (L?)users who can't or don't want to use Xcode get a $99 discount from that full price. What a deal!

Even without enrollment, an Apple ID lets anyone install (and reinstall) apps for a whole week... from source code, as part of Apple's learn-to-code educational initiative.

So it's allowed.

 

[yurc]

Apple has always had these restrictions in place and you should have been aware of them before buying your devices.



Before you buy a Apple PC you might want to consider Linux if you want something very open to choices.



Epic isn't quite about consumer choice regardless of platform yet.

Mac is very open though...Linux are best for some specific type of works and server / networking purpose....also not all folks willing to fights with packages just to installing software.

 

[threesixty360]

I thought the judges comment about epic deciding to not pay Apple yet we’re charging it’s own business partners (I.e. developers that use unreal) was kind of telling.

However, if that’s the case then epic international is connected with epic games so you can’t really have it both ways.

I feel like the judge was relieved that there was a technicality that she could hang on to.Two separate contracts for the two businesses even though in reality they are the same business. It’s not like epic games owns 30% of the epic international. I think is fully owned right?

also, using the term “overreaching” when making the ruling seems from my view to be saying to Apple, “we know you’re going to go in hard like you always do but we won’t let other companies suffer in this dispute if we don’t have to”.

I do feel that although this is a temporary injunction, in the long run I still can’t see how a judge is going to stop apple from unilateraly deciding to terminate its contract with epic international if it’s a wholly owned subsidiary of epic games.

otherwise all a developer has to do if they want to do something sketchy is just set up another developer license as away they go!

I wonder how much money epic will lose till spring? Interesting.

 

[WiseAJ]

I don’t know how much Epic really won here. So they can still temporarily develop for Unreal Engine. It still has a target on its back/is a wounded animal. If I were another game developer I’d think long and hard about whether or not I want to risk using Unreal Engine for my iOS/macOS game until this whole court battle is over (which could likely be a long long time since both Epic and Apple seem to want to fight this to the death and whoever loses will like keep appealing for as long as they can). I’m really curious how much use of Unity will increase because of this.

 

[throAU]

Apple had a decade to do the right thing and still haven't. The right thing is what devs asked for, like PAID UPGRADES, NOT SUBSCRIPTIONS. Or fixing the abysmally crippled sandbox. Or stopping counterfeit apps. Etc.

It seems "the right thing" is highly subjective.

The sandbox is a security measure. Some people care a lot more about application vs. device security than you do, it would appear.

 

[throAU]

The most important thing here, for Epic, is that they actually CAN bow out quite gracefully at this point. They've gotten their press. Everyone (especially Fortnight gamers) now KNOWS that they can purchase credits outside of the game. Even if Epic says, "Yeah, we were 100% wrong and we'll follow the rules we agreed to" that doesn't prevent them from continuing to sell credits outside of the in-game experience. They just can't ADVERTISE in-game that this is an option. So, two weeks from now, they're back on the App Store and it's the "worst kept secret" that you can buy more credits for less through your web browser. For those few who still pay in-game, Apple gets their 30%.

EPIC could quite easily fix this via requiring an account to log into that has a subscription fee paid via web site, etc..

Like the way Microsoft do for 365, Amazon do for prime video, Netflix do, etc.

This wouldn't require violating the App Store rules regarding payments, which are clearly designed so that people can't get scammed for real money inside of iOS apps without going through the apple payment processing that apple can issue/deny refunds for, etc.

 

[the8thark]

If Epic win, then every developer should put their own app store on the Epic game store and tell Epic "you wanted app stores within app stores for all developers". Flood the Epic Game store with so many individual app stores.

 

[Riffz60]

How can epic say they’re looking out for the consumers with a straight face?

All they want to do is cut out the middleman so they can keep that extra profit for themselves.

Every competing game app on the App Store is paying the same fees. Epic is not at a competitive disadvantage at all. Everyone is on the same level.

 

[AndiG]

I wonder how much money epic will lose till spring? Interesting.

Not only epic but Apple as well. „THE APP STORE WAS NEARLY 40 PERCENT OF APPLE’S TOTAL SERVICE REVENUE IN 2019“
https://www.theverge.com/2020/8/17/...-app-store-services-business-model-epic-games

 

[yurc]

I don’t know how much Epic really won here. So they can still temporarily develop for Unreal Engine. It still has a target on its back/is a wounded animal. If I were another game developer I’d think long and hard about whether or not I want to risk using Unreal Engine for my iOS/macOS game until this whole court battle is over (which could likely be a long long time since both Epic and Apple seem to want to fight this to the death and whoever loses will like keep appealing for as long as they can). I’m really curious how much use of Unity will increase because of this.

It takes times, seriously...

Re-packages assets, materials, rewriting scripts and other quirks. Many folks says same "Just switch to Unity!!"....I wonder if those folks has real experience converting Unreal ↔️ Unity back forth.

Easier said than done.

Especially for one man only indie game dev.

 

[throAU]

If Epic win, then every developer should put their own app store on the Epic game store and tell Epic "you wanted app stores within app stores for all developers". Flood the Epic Game store with so many individual app stores.

I'd love to see Gaben do that with a steam install for EPIC.

 

[WiseAJ]

It takes times, seriously...

Re-packages assets, materials, rewriting scripts and other quirks. Many folks says same "Just switch to Unity!!"....I wonder if those folks has real experience converting Unreal ↔ Unity back forth.

Easier said than done.

Especially for one man only indie game dev.

They might not lose existing projects right away but can and will likely lose new projects that haven’t started yet or maybe just starting.

 

[KENPHOTO]

Not only epic but Apple as well. „THE APP STORE WAS NEARLY 40 PERCENT OF APPLE’S TOTAL SERVICE REVENUE IN 2019“
https://www.theverge.com/2020/8/17/...-app-store-services-business-model-epic-games

The App Store(with it's 355,000 paid apps) was nearly 40% of Apple's Revenue, not FORTNITE. There are many games that bring in more revenue for Apple than Fortnite does.