Epic Games files a lawsuit against Apple following Fortnite's App Store removal

Polycount

Posts: 2,511   +549
Staff member
In context: It's been a hectic morning for Epic Games. The company attempted to circumvent Apple's 30 percent App Store 'tax' with Fortnite by introducing a new direct payment system. Apple was none too pleased with Epic's gambit and responded by pulling the game from the App Store entirely.

Unfortunately for Apple, Epic has no interest in taking the tech giant's decision lying down. As we noted in a prior article, Epic has decided to file a lawsuit against Apple for what it believes to be anti-competitive business practices.

The lawsuit was filed almost immediately after Fortnite was pulled from the App Store, which suggests that Epic was expecting this sort of response from Apple. It's possible that the suit would've been discarded if Apple had let Epic's direct payment system slide, but that was probably never in the cards: Apple is known for many things, but App Store freedom is not one of them.

The legal action was announced on Twitter, and it's been filed with the Northern District Court of California. The action seeks injunctive relief to end Apple's "unfair and anti-competitive actions," which allegedly help it "unlawfully maintain" a monopoly in two multibillion dollar markets: the iOS app distribution Market, and the iOS in-app payment processing market.

Notably, Epic doesn't want monetary compensation nor does it want "favorable treatment" for itself. Instead, it is using this suit as a chance to try to force Apple to change its ways, and allow other payment processing (and distribution) channels to survive and perhaps thrive within the iOS ecosystem.

The following excerpts from Epic's initial complaint against Apple sum up its frustrations nicely:

...Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.

The result is that developers are prevented from selling or distributing iOS apps unless they use Apple’s App Store, and accede to Apple’s oppressive terms and conditions for doing so)... For example, as the sole distributor of iOS apps, Apple collects the money from every iOS user’s app purchase, remits only 70% of that payment to the app developer, and retains a 30% tax for itself.

...Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content.

If you want to view the full complaint for yourself, you can do so right here. We'll be keeping a close eye on the situation and we will let you know if Apple responds to Epic's allegations.

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Burty117

Posts: 3,819   +1,688
Why don't these company's just increase the price? If Apple take 30%, why not just increase the price enough so Apple have their percent and you get your profit?

Although I've gotta say some of the rules Apple have put into place for App "Quality" are just plain crazy.
 

mshrf

Posts: 14   +8
Why don't these company's just increase the price? If Apple take 30%, why not just increase the price enough so Apple have their percent and you get your profit?

Although I've gotta say some of the rules Apple have put into place for App "Quality" are just plain crazy.
Price elasticity. Economic 101 really.
 

m4a4

Posts: 1,940   +1,724
TechSpot Elite
Why don't these company's just increase the price? If Apple take 30%, why not just increase the price enough so Apple have their percent and you get your profit?

Although I've gotta say some of the rules Apple have put into place for App "Quality" are just plain crazy.
They have been. Passing the cost to the customer. But do you really want that to be acceptable, knowing that it could happen to you?
 

jonny888

Posts: 94   +115
Not really sure what Epic expects to gain out of this. As much as Apple clearly doesn't need the money that badly, they have a right to take their cut for supporting the distribution of the game. Trying to side-step it is an obviously dumb move that was going to backfire, especially for such a popular title with a lot of money on the line.

The issue of whether or not Apple/iOS should support 3rd party app stores is more interesting and has some merit. But, as an end user, the the last thing I would want on a phone is 2, 5, 10, etc app stores for every single dev out there who wants to cut Apple out of the picture. It's bad enough having 8 different app stores on my PC, where storage space is generally at less of a premium.

Fragmented app distribution doesn't seem beneficial unless you expect significant cost savings. And if the PC is anything to go by, all the devs do is keep the same prices they had before and take more of their cut. While I don't object to them making more money from their products, it does nothing to improve the user experience.

Not to mention the hypocrisy, considering Epic launched it's own PC app store and went out of its way to try and lock game developers into "Epic exclusive" contracts, where gamers are unable to buy the game on any other (PC) app store for at least a year. They clearly have no problem on monopolising distribution. The fact that it's temporary doesn't really matter since the bulk of a game's sales and profit happen at launch and tail off as time passes.

And if Apple should be forced to allow other app stores on their hardware/OS, should Sony be forced to allow them on the PS5? Or MS on the Xbox? Or Nintendo on the Switch? They're all just variations of gaming hardware with an OS, so if it applies to one it seems like it should apply to them all. But that sounds like a car crash for end users if that were the case.
 
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psycros

Posts: 3,184   +3,371
Are they going to go after Amazon's walled garden as well? If not, this rings a little hollow. Sure, Apple found a great way to get rich off the hard work of others. They also have the only mobile ecosystem that isn't a cesspool of Chinese scamware, so you take the good with the bad. That said, a 20% take of all purchases would be a lot more fair to the developers who sell on the App Store. Actually, 20% of the gross for actual app sales and 15% on in-app purchases sounds about right. I think most reasonable developers would be fine with that.
 
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Eldritch

Posts: 244   +309
I believe that Epic is in the right here. It is one thing to control app distribution on your platform but it is entirely different matter to allow only yourself to operate an appstore. This is further aggravated by the fact that even if an app is downloaded from appstore its further payments also need to be made after giving Apple an exorbitant cut.

Here's an easy analogy, it's one thing I have to buy my Hyundai from a authorized dealer but it's another matter if they force me to buy Hyundai Motor Insurance only. But when they say that even the gas has to be filled from Hyundai Authorized Gas Pumps then it's a bridge too far. This is the problem with Apple's store and really they need to back off on this. We are getting a bit too comfortable with mega corporations stomping all over our basic competitive and fairness laws.
 

Thanthan

Posts: 46   +95
Why don't these company's just increase the price? If Apple take 30%, why not just increase the price enough so Apple have their percent and you get your profit?

Although I've gotta say some of the rules Apple have put into place for App "Quality" are just plain crazy.
In a lot of business cases Apple has their own apps youre competing with (Apple music f. Ex) and if you raise prices People Will just go to Apple apps instead, since theyll be cheaper, not having to pay 30%.
 

Burty117

Posts: 3,819   +1,688
Price elasticity. Economic 101 really.
They have been. Passing the cost to the customer. But do you really want that to be acceptable, knowing that it could happen to you?
Fine line, right? Sounds simple, but then they'd sell a lot less.
I mean, I don't have an iPhone, so I really don't care if the price increases on the App Store. The way I see it, if you can afford an iPhone, you can afford that extra 50p for an App and all developers should point the finger at Apple. I'm sure once there's a bit of an uproar from it's customers they'd change their policy's.
 

3volv3d

Posts: 279   +117
I believe that Epic is in the right here. It is one thing to control app distribution on your platform but it is entirely different matter to allow only yourself to operate an appstore. This is further aggravated by the fact that even if an app is downloaded from appstore its further payments also need to be made after giving Apple an exorbitant cut.

Here's an easy analogy, it's one thing I have to buy my Hyundai from a authorized dealer but it's another matter if they force me to buy Hyundai Motor Insurance only. But when they say that even the gas has to be filled from Hyundai Authorized Gas Pumps then it's a bridge too far. This is the problem with Apple's store and really they need to back off on this. We are getting a bit too comfortable with mega corporations stomping all over our basic competitive and fairness laws.
I disagree. Apple suck. Always have. They wanted people to use iTunes to install all music, so they had a monopoly on where you bought your music and how it got onto their device.
Other apps immediately were located (winamp) to avoid this.
Yes it was possibly, but I am pretty sure it wasn't meant to be.
But it is their phone and their store so if they don't want something on it for any reason, thats tough, thats how Apple have always been and as an Apple customer you should be used to their tactics and ideas.
See Apple are anti-usb. They don't want to make things easy, they don't want to be like anyone else, let alone everyone else, while customers would love to be able to use any charger or peripheral.
 

MaxSmarties

Posts: 369   +195
Sorry but Apple and Google are right: their stores, their rules. And epic was aware of that since the beginning, and they were more than happy to reach Apple and Google customers via their stores. Epic is playing dirty game now, after milking customers for years. And the lawsuit itself is ridiculous: they sued Apple AND Google about monopoly... that's wrong by definition.
 
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Lounds

Posts: 536   +385
Epic are clearly doing this to get a backroom deal with apple so that the 30% is cut down to say 10% just for themselves.
 

Cubi Dorf

Posts: 236   +90
Microsoft recently ask governments to evaluate Apple app store. I think they are want to do same thing on Microsoft window if goverment saying it ok and Epic is knowing this. They are don't want to lose Epic Store on Windows.
 
I found the easiest way to avoid all this crap is to never purchase any apps, I've owned an iphone for over 10 years and have never once bought an app. If the app isn't free I don't need it.

same goes for android, I have one for work and refuse to pay them for any apps.
 

Adhmuz

Posts: 2,046   +837
But it is their phone and their store so if they don't want something on it for any reason, thats tough, thats how Apple have always been and as an Apple customer you should be used to their tactics and ideas.
Nailed it, Apple's store, Apple's rules. Epic is just a piece of crap trying to make all the money they can and cut out anyone they can, then pretend like they are the good guy despite practicing similar tactics.
 
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Epic are clearly doing this to get a backroom deal with apple so that the 30% is cut down to say 10% just for themselves.
I take it you ignored "Notably, Epic doesn't want monetary compensation nor does it want "favorable treatment" for itself." They are doing this to force the hand of the courts to look at the way Apple and Google handle their app stores.

Nailed it, Apple's store, Apple's rules. Epic is just a piece of crap trying to make all the money they can and cut out anyone they can, then pretend like they are the good guy despite practicing similar tactics.
If there was an alternative you might be right, and even that's iffy, but because the App Store is basically a monopoly Epic is in the right here. There is no reason that Apple should get 30% outside of the fact that they have no competition on iOS so they can do whatever they want, the cost to maintain the App Store is probably closer to 5-7% at best. If this means that Apple has to lower their take or that devs can make their own payment portals then Epic is without a doubt the good guys here. The bad thing is I think Apple will throw billions at politicians and make this go away.
 

Cubi Dorf

Posts: 236   +90
Apple should being able to choose what they want to sell on their store. The real problem is they are giving themself monopoly by not allowing any other company to operate competing app store. They cannot having both way. The "it there store and should be able to do what they want" is right, however only if they let go of the monopoly. Apple is free to do what they are want with their device as long as it is within law. Laws do apply. I have reading US government has broken up monopolies like this in history. Apple should reconsider before is is being too late.

Nailed it, Apple's store, Apple's rules. Epic is just a piece of crap trying to make all the money they can and cut out anyone they can, then pretend like they are the good guy despite practicing similar tactics.
 

MaxSmarties

Posts: 369   +195
Epic are clearly doing this to get a backroom deal with apple so that the 30% is cut down to say 10% just for themselves.
Doing that Apple would lose the grip over any major developer... it would be easier for Apple to buy epic and close it /s