Google files counterclaim against Epic Games for dodging commissions on in-app purchases

Cal Jeffrey

Posts: 3,160   +872
Staff member
In context: In August 2020, Epic Games initiated a two-pronged attack when it implemented a direct payment method for Fortnite's in-app purchases, skirting the Apple's and Google's store commissions. The stunt got the game removed from the App Store and Google Play, which Epic used as the impetus for filing antitrust lawsuits against both tech giants.

On Monday, Google filed a countersuit against Epic Games, claiming breach of contract. The complaint alleges that introducing an external payment system to avoid paying Play Store commissions on in-app purchases was a willful breach of the Google Play Developer Distribution Agreement (DDA).

Unlike iOS, developers have more than one way to distribute apps to users. However, when they choose to sell their apps through Google Play, they agree to pay the 30-percent commission on in-app purchases.

Google claims that Epic violated this agreement when it submitted an update that added the off-platform payment method. It further adds that it continues to violate this clause, considering that many users purchased Fortnite through the Play Store and are still using the alternative payment system. Google claims it is entitled to a portion of those sales.

"Google did not disable Epic's developer account and indicated that Epic could publish a new, compliant version of Fortnite," the countersuit argues. "The users that downloaded the non-compliant version of Fortnite before its removal from Google Play are still able to use Epic's hotfixed external payment mechanism to make in-app purchases—allowing Epic to evade its contractually agreed service fee to Google for those purchases."

The lawsuit puts Epic in a challenging position. The only way to fix the situation is to issue a Fortnite patch that removes the external payment system. However, users are not likely to download the update when they can still get lower prices using the alternative method. So Epic will also have to temporarily take down its payment platform to incentivize players to update the game.

Additionally, it has been a year since all of this began. While Google's documents do not list the damages dollar value, 30 percent of a year's worth of Fortnite revenue from Android users is likely a substantial lump sum.

The likelihood of Google winning its counterclaim seems high considering that Apple filed a similar lawsuit and got awarded more than $3.6 million. That figure does not appear significant, but it is only based on revenue ($12,167,719) received between August 2020 and October 2020. If it wins, Google's award could be seven times that amount or more.

Permalink to story.

 

trparky

Posts: 957   +1,023
If you ask me, both Google and Apple have every reason to take a cut off the purchase price. They’re handling the cost of processing the credit card transaction and the cost of having host the download which involves the cost of having the servers, disk space, bandwidth, and the electricity to run the servers.

Sorry Epic, I don’t agree with you.
 

psycros

Posts: 3,613   +4,459
If you ask me, both Google and Apple have every reason to take a cut off the purchase price. They’re handling the cost of processing the credit card transaction and the cost of having host the download which involves the cost of having the servers, disk space, bandwidth, and the electricity to run the servers.

Sorry Epic, I don’t agree with you.

I do find myself wondering why Epic didn't just post a link to their site and instructions on how to enable sideloading, with the incentive that customers would save a little money. Legally, Google couldn't do anything except cry about security risks, as if the Play Store is really any safer than downloading straight from the developer.
 

cliffordcooley

Posts: 12,993   +6,314
What needs to be put on trial here is Google's (and Apple's) entitlement for such commissions. Are they or are they not reasonable? I have no doubt they are entitled to payment. The question is if those high percentages are reasonable. I for one do not believe they are.
 

kiwigraeme

Posts: 550   +425
I just hope the future brings an agnostic system - that bypasses all the big boys .
When developers sign up they all pay a small % into fund and agree lose IP for abandonware and hand over source files .

Would be a laugh if Microsoft becomes a savoir - laws requiring Apple etc to allow other vetted servers .
MS hosts Android/Apple/Linux/Windows etc - buy 1 platform play on any.

Apple number 1 gaming company in the world - er what games , TV media created that are masterpieces?. My tried to play a "free" game on my son's Ipad - stopped for the incessant beating of adverts - had the same games on android - practically no adverts - when son was younger android paid versions were super cheap - saw some prices on apple and monthly subs were like crazy prices -- for games I got for say $5 ( angry birds , PvZ, where's my water etc all the big ones were dirt cheap 10 years ago )- maybe just as bad on android now - don't know

 

Uncle Al

Posts: 8,229   +6,997
You would think that by this time there would have been a good 3rd of 4th choice out there for companies like Epic to go to for ALL their business .......
 

Vanderlinde

Posts: 52   +44
If you ask me, both Google and Apple have every reason to take a cut off the purchase price. They’re handling the cost of processing the credit card transaction and the cost of having host the download which involves the cost of having the servers, disk space, bandwidth, and the electricity to run the servers.

Sorry Epic, I don’t agree with you.

And assure that the apps your getting from these stores are as clean as possible, with zero to none malware really.