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- (Bloomberg) - Epic Games Inc. Failed again to force Apple Inc. To put Fortnite back in its App Store while the game developer pursues its antitrust claims against the iPhone maker.A federal judge.
- In December 2018, Epic Games, makers of Fortnite and the Unreal game development engine, launched the Epic Games Store.The announcement was followed by a flurry of store-exclusive game.
- Epic sued Apple on Aug. 13, claiming the removal of the Fortnite app from the App Store was in “retaliation” for the game maker’s decision to offer in-app purchases through its own marketplace.
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© Bloomberg The Epic Games Inc. Fortnite: Battle Royale video game is seen in the App Store on an Apple Inc. iPhone displayed for a photograph in Washington, D.C., U.S., on Thursday, May 10, 2018. Fortnite, the hit game that's denting the stock prices of video-game makers after signing up 45 million players, didn't really take off until it became free and a free-for-all.(Bloomberg) -- Epic Games Inc. failed again to force Apple Inc. to put Fortnite back in its App Store while the game developer pursues its antitrust claims against the iPhone maker.
A federal judge in Oakland, California, on Friday rejected Epic’s bid for a preliminary injunction that would have required Apple to reinstate the battle royale video game in the App Store -- and allowed Epic to use its own payment option. Apple had removed Fortnite in August after Epic set up a direct-pay option for in-game purchases that circumvented Apple’s pay system.
It’s Epic’s second setback in its lawsuit alleging that Apple runs its App Store as an illegal monopoly because developers are barred from making their iPhone and iPad apps available through their own websites. Instead, Apple allows only downloads and payments through the App Store, and takes 30% of the purchase price. The case is now headed for trial next year.
What Bloomberg Intelligence Says
Epic’s antitrust lawsuit threatens the billions of dollars in revenue the App Store generates.
-- Jennifer Rie, Senior Litigation Analyst

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While Epic isn’t seeking monetary damages, it’s asking for an order enjoining Apple’s rules and opening iOS devices to rival app distributors and payment systems, which could substantially curb App Store revenue, Rie said.
In a consolation for Epic, the judge stuck with her earlier ruling that Apple can’t cut Epic’s Unreal Engine from its developers’ tool program because the software program that is used by third-party developers isn’t part of the antitrust fight.
U.S. District Judge Yvonne Gonzalez Rogers said in her ruling that she was unwilling to tilt the playing field in favor of either side because of the novelty and the magnitude of the issues raised in the lawsuit concerning competition in digital marketplaces.
“This matter presents questions at the frontier edges of antitrust law in the United States,” Rogers said. “Simply put, no analogous authority exists. The questions and issues raised in this litigation concern novel and innovative business practices in the technology market that have not otherwise been the subject of antitrust litigation.”
The judge reiterated her position that Epic’s predicament is of its own making because it breached its contract with Apple by inserting a hotfix in Fortnite to circumvent Apple’s pay system. Epic “flatly” rejected the judge’s proposal that, if Epic put Fortnite back on Apple without the hotfix, Apple’s 30% take of in-game purchases would be placed in an escrow account until the case is decided at trial, according to the ruling.
“Epic Games is grateful that Apple will continue to be barred from retaliating against Unreal Engine and our game development customers as the litigation continues,” a company spokesman said. “We will continue to develop for iOS and Mac under the court’s protection and we will pursue all avenues to end Apple’s anti-competitive behavior.”
Apple denies running its App Store as a monopoly and contends that it faces fierce competition in every market in which it operates, including gaming.
“We’re grateful the court recognized that Epic’s actions were not in the best interests of its own customers and that any problems they may have encountered were of their own making when they breached their agreement,” Apple said in a statement.
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.
Unreal Engine is a suite of software used by developers to build 3-D games and other products. 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 has said. Microsoft Corp., which makes the Xbox, uses the technology for games developed for consoles, PCs and mobile devices, and is backing Epic in court.
The case is Epic Games Inc. v. Apple Inc., 20-cv-05640, U.S. District Court, Northern District of California (Oakland).
(Updates with judge’s reasoning in sixth paragraph.)
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© Dreamstime/Dreamstime/TNS The popular video game Fortnite was removed from Apple's App Store on Thursday, Aug. 13, 2020, after Epic Games attempted to circumvent Apple's 30 percent cut of in-app purchases, prompting legal action from Epic Games.The popular video game Fortnite was removed from Apple’s App Store on Thursday, after Epic Games attempted to circumvent Apple’s 30% cut of in-app purchases.
In response, the Cary, N.C.-based video game maker filed a lawsuit against Apple, asking a court to order Apple to reinstate the game and declare the Apple fee illegal.
In its legal filing, Epic said the removal of Fornite is “yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.”
The ban came after Epic released its own in-app payment system on Thursday that would have bypassed the fees taken by Google and Apple’s app stores.
The coordinated move and subsequent legal filing represent a significant uptick in the tensions between the two companies.
Epic’s founder and CEO Tim Sweeney has long railed against these fees as being exorbitant and an unfair business practice. Apple has come under fire recently, both in the U.S. and in Europe, over antitrust concerns related to its mobile marketplace.
In its release, Epic Games told its users that using the in-app payment system rather than Apple or Google’s would result in lower prices for them.
It offered 1,000 V-bucks — about $10 worth of Fortnite’s internal currency — for $7.99 if a player used the direct payment system. Using the normal Apple payment system, the same amount of V-bucks would cost $9.99.
In a statement to the website The Verge, Apple said it removed the game because it violated its App Store guidelines.
“Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users,” the company wrote. “As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.”
Apple added that Epic has benefited from the App Store for years, including the tools and distribution it offers to all developers.
“The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users,” Apple said. “We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store.”
It’s not the first time that Epic has tried to bend app stores to its will.
Earlier this year, Fortnite finally returned to Google Play’s store after protesting that company’s 30% fee for 18 months.
While Fortnite is free to download, the company makes money from players who pay within the game to customize their characters’ weapons, appearance and signature dance moves.
That meant 30% of the money made within the app was going to Apple and Google. Epic had made Fortnite available to Android-supported phones via a direct download from Epic’s website to get around the Play store fee.
That wasn’t a feature available on iPhones, so Fortnite had always been available on the App Store — until today. While the game is still available on iPhones that have already downloaded it, users won’t be able to download new updates for the game. Eventually that could cause the game to become incompatible with new editions of the iPhone.
The amount of money at play is significant. Fortnite has become one of the most popular video games in the world, with around 350 million players. Fortnite brought in an estimated $1.8 billion last year alone, according to Nielsen’s SuperData.
In the past two years, the game has been downloaded onto iPhones and iPads more than 133 million times, bringing in $1.2 billion, The New York Times reported, citing the analytics firm Sensor Tower. That would put Apple’s cut at around $360 million, according to Sensor Tower.
Sweeney contends that the fees are illegal.
Last December, he said: “We believe this form of tying of a mandatory payment service with a 30% fee is illegal in the case of a distribution platform with over 50% market share.”
Epic also has its own game-download platform where developers can sell games to consumers. The Epic Games Store only collects 12% of sales from those games, and it allows developers to use their own in-game payment system if they wish.
Perhaps bolstering Epic Games as it confronts the tech giants, the company has seen a resurgence in popularity during the coronavirus pandemic, and it recently raised another billion dollars from investors.
The video game maker is now valued at $17.3 billion, by far the most valuable venture-capital-backed company in North Carolina. Sweeney, its founder and CEO, is edging closer to being the richest person in the state.
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