Apple says Epic Games is no 'corporate Robin Hood' in breach of contract countersuit

Cal Jeffrey

Posts: 2,530   +577
Staff member
In a nutshell: As ugly as we knew it would get, the spat between Apple and Epic escalated this week. Cupertino filed a countersuit claiming the Unreal Engine developer breached a contract by implementing an alternative payment system in Fortnite. It also claims Epic is trying to portray itself as a "corporate Robin Hood," while, in reality, its greed is what is really at work.

In Apple's continuing legal battle with Epic Games, Cupertino is taking the offensive by filing a counterclaim against the developer for breach of contract. On Tuesday, Apple asked a California court for restitution for damages caused by Epic implementing an alternative payment system in its app the circumvented its ability to collect commissions on in-app sales.

According to Apple's filing, app developers who wish to distribute through the App Store must agree to the terms. One of these conditions is that 30 percent of app sales and sales within the app go to Apple. The two-trillion-dollar tech giant says Epic blatantly breached the terms on collecting payments, thus hurting Apple's business for its own benefit.

"Although Epic portrays itself as a modern corporate Robin Hood, in reality, it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store," the filing reads.

Apple Counterclaims Against... by MacRumors

According to Apple's legal team, that "termendous value" stands at around $600 million earned just from the App Store before Fortnite was removed.

It is unclear how much Apple is asking for in damages. The filing vaguely states that it seeks restitution for all money collected through the external payment method. Obviously, this is a number Epic is going to have to cough up. However, the monetary damage caused by Epic's alternative was minimized when Apple banned Fortnite only a few hours after the system was implemented.

Ironically, it is asking US courts for an injunction to prevent such systems while at the same time is defending itself overseas from regulators and companies who say its App Store Tax is unfair since the marketplace is isolated from any competition. Such an injunction would prohibit any app, not just Fortnite, from implementing external payment methods. It would essentially give Apple a legally bulletproof case against future transgressions of this nature.

Epic has not commented on the countersuit but has long maintained that Apple's walled garden is an unfair playing field that suppresses free-market competition. It points to the Fortnite ban as just one example of that supression. Apple is also banning the developer from using the Sign In with Apple system starting as early as Friday.

Image credit: Ascannio

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GregonMaui

Posts: 213   +83
Kind of a naive read of things, IMHO. Epic is perfectly capable to do what Spotify does and sell subscriptions outside of the App Store and use them in their app. It only makes sense that transactions entered into from within the ecosystem, billed and collected by an App Store (be it Google, amazon or apple) pay a percentage of the proceeds. Yes regulators are looking at fees charged by app stores, but the market is pretty much 30%, is that too much considering when developers could completely go around the system by advertising, selling and collecting fees outside of App stores? Who knows, but we have usually relied on letting the markets decide

Personally, I'd love to be able to get books on my Kindle without having to pay the Amazon tax
 

m4a4

Posts: 1,950   +1,730
TechSpot Elite
but the market is pretty much 30%, is that too much considering when developers could completely go around the system by advertising, selling and collecting fees outside of App stores? Who knows, but we have usually relied on letting the markets decide
The main problem with Apple is that they outright refuse to let you even hint at a payment system outside of their App Store. No redirecting, no going to your webpage if it has a different (and usually cheaper) payment option, no in-app code redemption system, no mentioning that Apple takes 30%...
Basically Apple forces you to pretend that there is no other way to buy content when in the Apple ecosystem. And that's (also) where Epic is calling them out for monopolistic and anti-competitive practices on the platform and App Store (since it's pretty much impossible to get an app on an iDevice otherwise).
 
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GregonMaui

Posts: 213   +83
The main problem with Apple is that they outright refuse to let you even hint at a payment system outside of their App Store. No redirecting, no going to your webpage if it has a different (and usually cheaper) payment option, no in-app code redemption system, no mentioning that Apple takes 30%...
Basically Apple forces you to pretend that there is no other way to buy content when in the Apple ecosystem. And that's (also) where Epic is calling them out for monopolistic and anti-competitive practices on the platform and App Store (since it's pretty much impossible to get an app on an iDevice otherwise).
Yes, but everyone knows that you can already do that, so it is not a big deal at all. And it is definitely not monopolistic behavior. Does kindle let you sell outside books? As Google is always telling us, Android is way more popular than iOS, so if anyone actually cared they could easily buy an android and not deal with it. Can't have monopolistic behavior without a monopoly. this is just a bad argument looking to be repeated enough that it gains traction. Not the same as fact
 

tacobravo

Posts: 116   +130
The main problem with Apple is that they outright refuse to let you even hint at a payment system outside of their App Store. No redirecting, no going to your webpage if it has a different (and usually cheaper) payment option, no in-app code redemption system, no mentioning that Apple takes 30%...
Basically Apple forces you to pretend that there is no other way to buy content when in the Apple ecosystem. And that's (also) where Epic is calling them out for monopolistic and anti-competitive practices on the platform and App Store (since it's pretty much impossible to get an app on an iDevice otherwise).
Epic just wants to sell on Apple's App Store and not have to pay Apple's cut
 

m4a4

Posts: 1,950   +1,730
TechSpot Elite
Yes, but everyone knows that you can already do that, so it is not a big deal at all. And it is definitely not monopolistic behavior. Does kindle let you sell outside books? As Google is always telling us, Android is way more popular than iOS, so if anyone actually cared they could easily buy an android and not deal with it. Can't have monopolistic behavior without a monopoly. this is just a bad argument looking to be repeated enough that it gains traction. Not the same as fact
Wait, so, because you know about anti-competitive behaviour, it makes it ok? That's not an argument.

And after amassing hundreds of millions of people on their platform, marketshare is but a shallow talking point echoed by Apple fans. A bully with a big platform is still a bully, especially when you're "both a player and a referee". There's a good reason why so many antitrust cases are being lobbied against Apple right now.

I suggest you look into it further and with an open mind: https://onezero.medium.com/apples-secret-monopoly-5718272c16a5
 

trparky

Posts: 808   +770
I'd be more sympathetic to Epic's stance here if they weren't an already huge company making millions. This isn't some small company here scraping to get by. No, this is Epic; they make a whole lot of cash and is only fighting Apple because they want to make even more money whenever they nickel and dime their users with microtransactions. I can't feel sorry for them here, no sir!

As for skimming off the top, even Google does it. As for Apple, how else do you think that they can afford the massive server and processing infrastructure needed to host apps on their App Store and not only that but they have to pay for bandwidth as well which last time I checked none of that kind of stuff grows on trees.

Now does Apple need to perhaps lower the percentage. Sure, I can agree with that. Should the percentage go completely away? Nope. Again, payment processing and the hardware on the backend costs money and with ever growing amounts of people taking advanage of those kinds services will require additional hardware to process. This is pure economics here people.
 

Xallisto

Posts: 79   +88
Nobody thinks Epic is a corporate Robin Hood, but they are right to contest Apples storefront taxes for payments that happen outside their storefront like purchases that happen inside Fortnite.

Apple/Google charging their percentage on the store itself is fine but when they abuse their position as the OS installed on your phone to tax purchases between the phone owner and Epic they have overstepped.

Microsoft does not charge me or developers for transactions done on their OS and we should not accept that behavior from Google or Apple either.
 

sorten

Posts: 43   +57
TechSpot Elite
Nobody thinks Epic is a corporate Robin Hood, but they are right to contest Apples storefront taxes for payments that happen outside their storefront like purchases that happen inside Fortnite.

Apple/Google charging their percentage on the store itself is fine but when they abuse their position as the OS installed on your phone to tax purchases between the phone owner and Epic they have overstepped.

Microsoft does not charge me or developers for transactions done on their OS and we should not accept that behavior from Google or Apple either.
I'm sure Apple's concern with that approach is that free-to-play games with microtransactions would result in zero revenue for Apple, despite the fact that Apple is providing the storefront, software distribution, and patching for the game publisher.
 

Xallisto

Posts: 79   +88
I'm sure Apple's concern with that approach is that free-to-play games with microtransactions would result in zero revenue for Apple, despite the fact that Apple is providing the storefront, software distribution, and patching for the game publisher.
Therein lies the issue, Epic would provide all that themselves but Apple won't let them.
 
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trparky

Posts: 808   +770
Therein lies the issue, Epic would provide all that themselves but Apple won't let them.
True, but I really don't want to see that happen. I generally know that if I get an app from the App Store on my iPhone, I'm going to be getting an app that's been vetted to be generally safe to use. I don't want to lose that kind of experience.
 

Xallisto

Posts: 79   +88
True, but I really don't want to see that happen. I generally know that if I get an app from the App Store on my iPhone, I'm going to be getting an app that's been vetted to be generally safe to use. I don't want to lose that kind of experience.
I'm not suggesting that the store has to go, just give users the option not to use it.
 
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trparky

Posts: 808   +770
I'm not suggesting that the store has to go, just give users the option not to use it.
So, in other words, give the user the option to download the app from an alternative store if they so choose to do so if they want to pay a cheaper price. However, the standard way to download the app will always remain.
 
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Axiarus

Posts: 553   +356
The main problem with Apple is that they outright refuse to let you even hint at a payment system outside of their App Store. No redirecting, no going to your webpage if it has a different (and usually cheaper) payment option, no in-app code redemption system, no mentioning that Apple takes 30%...
Basically Apple forces you to pretend that there is no other way to buy content when in the Apple ecosystem. And that's (also) where Epic is calling them out for monopolistic and anti-competitive practices on the platform and App Store (since it's pretty much impossible to get an app on an iDevice otherwise).
Apple is their own company, they can set the terms they want. Epic signed on to that, accepting the terms.
 

Axiarus

Posts: 553   +356
And now they're crying foul all because they think they're being cheated. Sorry, I don't buy it when I look at the company's profits. They're raking the cash in by the truck load.
Its funny, they want their game on Apples servers and storefront but want to pay them nothing lmao
 

Xallisto

Posts: 79   +88
Exactly. Server resources, bandwidth, and electricity isn't cheap. Someone has to pay for it.
You are missing the whole point of this case, Epic wants to provide all of that themselves, but Apple wont let them.

Because to let them would mean that Apple could not apply their 30%.
 
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trparky

Posts: 808   +770
Yeah and they saw those terms were dogshit and are now contesting them, as well they should.
Again, they ain't the Robin Hoods that everyone thinks. They're in it for themselves, don't let them fool you. They only want to make more money on top of the already large sums of cash that they rake in.
 
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