Epic Games, the American video game and software development company responsible for the hit battle royale game Fortnite, has found itself in hot water with Apple after giving an update to the games’ app. Apple and Google both say the update violates the contractual terms Epic Games agreed to and gives them justification to remove the Fortnite app from their app markets.
Epic, however, disagrees and has moved to file for a temporary restraining order in what is the beginning of a complex legal battle against two of the biggest names in tech today. Fans of the very popular game have had a lot to say about the disappearance of the Fortnite app, but Epic Games stands to lose much more if courts continue to side with Apple.
Updates and Agreements
Typically, all in-app purchases are processed through their respective app store and then through the app itself. So, instead of paying the app directly, users are paying through digital storefronts. This is the norm for app platforms like Apple, Google, Nintendo, and Microsoft, who collect 30% commission.
Standardized fees like this have prevented companies like Epic Games from joining the App Store in the past because of payment restrictions. Game hosting sites, online slots, and a list of bitcoin casinos usually choose to build around browser compatibility rather than create apps for the same reason.
The update that Apple and Google say violated terms of service started affecting the app on August 13th, giving players access to a new payment option. Bypassing the app store’s payment processing altogether, this payment option allowed players to play Epic Games directly.
CEO of Epic Games, Tim Sweeney, had several correspondences with both Apple’s Head Legal Counsel, Douglas Vetter, and Apple CEO, Tim Cook, before the violating update asking for the go-ahead to introduce competitive payment options. When met with a resounding “no”, Tim Sweeney e-mailed Tim Cook an early morning declaration on August 13th, stating his intent. “I’m writing to tell you that Epic will no longer adhere to Apple’s payment processing restrictions,” he wrote. “Today, Epic is launching Epic direct payments in ‘Fortnite’ on iOS, offering customers the choice of paying in-app through Epic direct payments or through Apple payments, and passing on the savings of Epic direct payments to customers in the form of lower prices.”
Call and Response
Within the same day, the Fortnite app was kicked off of the App Store and Google Play, making it unavailable for new downloads or updates. For a game that relies on seasonal updates to stay active, this is a pretty big deal. Players accessing the game from phone or tablet will be unable to play in the new season, which has only just started on August 27th.
On top of the removal of the Fortnite app, Apple also blocked Epic Games’ access to its software development kit which means they can’t provide any updates to the Unreal Engine for Apple users. The Unreal Engine has become a cornerstone for many video game developers, including those that provide games and support for the App Store. Blocking Epic from providing support for Unreal could severely affect those developers and games business as a whole.
In the Clear–For Now
On Monday, August 24th, both parties were privy to the first hearing in the case filed by Epic Games in an attempt to get a temporary restraining order for both the Fortnite app and the Unreal Engine. Judge Yvonne Gonzalez Rogers presided over the case through a Zoom call, where she stated that the violation by Epic Games was not only intentional but disingenuous.
The significance of that breach led her to dismiss the TRO request for the Fortnite app, so iOS players won’t be joining this season any time soon. But she went on to speculate that the app could be restored if Epic Games were to reverse the update and that closer examination of Apple’s 30% commission fees could be ruled anti-competitive.
As for the restraining order for the Unreal Engine, she was more than willing to grant temporarily, saying, “Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem.” She went on to add, ”The public context in which this injury arises differs significantly: not only has the underlying agreement not been breached, but the economy is in dire need of increasing avenues for creativity and innovation, not eliminating them. Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders.”
The Future Of Epic and Games
There’s no way to tell how the coming cases will side–the next hearing is scheduled for September 28th–but this is certainly a turning point, not only for Epic Games but for video game developers as a whole.
If Judge Yvonne Gonzalez Rogers’s observations are accurate, the App Store and other marketplaces may see challengers coming for the standardized 30% free apps they have to pay to host in-app purchases. Although the Unreal Engine is safe for now, some developers have preemptively jumped ship, switching to Unity just in case they don’t see a return of Unreal in the future.
No matter what happens, the litigation between the quickly established Epic Games and the household names of tech are already making waves that people outside the niche are feeling. This is a long-term war worth keeping an eye on.