Epic Games has filed legal papers in response to Apple [pdf](cdn2.unrealengine.com)
cdn2.unrealengine.com
Epic Games has filed legal papers in response to Apple [pdf]
https://cdn2.unrealengine.com/apple-complaint-734589783.pdf
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This filing is clever on Epic's part. (Or someone at Cravath, more likely.)
What Epic is asking for is an injunction. They may well get a temporary injunction quickly, compelling Apple to put their app back in Apple's store. Then the case gets litigated on the merits, but starting from a de facto win for Epic.
The standard required for a temporary injunction is low:
"To justify a temporary injunction it is not necessary that the plaintiff's right to a final decision, after a trial, be absolutely certain, wholly without doubt; if the other elements are present (i.e., the balance of hardships tips decidedly toward plaintiff), it will ordinarily be enough that the plaintiff has raised questions going to the merits so serious, substantial, difficult and doubtful, as to make them a fair ground for litigation and thus for more deliberate investigation."[1]
Litigation on temporary injunctions is relatively fast. This part will be decided in weeks, not years.
Epic might only win a rollback to the last uncontroverted state, though. That is, apparently, before Epic's payment system went live on Apple platforms. If Apple had allowed third party payments for a while, then removed the app, Epic would be in a stronger position to insist that their own payment system remain live.
[1] https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article...
[2] https://www.courtlistener.com/recap/gov.uscourts.wiwd.39930/...
What Epic is asking for is an injunction. They may well get a temporary injunction quickly, compelling Apple to put their app back in Apple's store. Then the case gets litigated on the merits, but starting from a de facto win for Epic.
The standard required for a temporary injunction is low:
"To justify a temporary injunction it is not necessary that the plaintiff's right to a final decision, after a trial, be absolutely certain, wholly without doubt; if the other elements are present (i.e., the balance of hardships tips decidedly toward plaintiff), it will ordinarily be enough that the plaintiff has raised questions going to the merits so serious, substantial, difficult and doubtful, as to make them a fair ground for litigation and thus for more deliberate investigation."[1]
Litigation on temporary injunctions is relatively fast. This part will be decided in weeks, not years.
Epic might only win a rollback to the last uncontroverted state, though. That is, apparently, before Epic's payment system went live on Apple platforms. If Apple had allowed third party payments for a while, then removed the app, Epic would be in a stronger position to insist that their own payment system remain live.
[1] https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article...
[2] https://www.courtlistener.com/recap/gov.uscourts.wiwd.39930/...
Woah - Epic says they would release a competing app store if it weren't for "Apple's illegal restraints".
> But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool."
Part 16, in the Intro.
> But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool."
Part 16, in the Intro.
> Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages.
Well, that's interesting.
> But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool
So, Epic doesn't want money, they want the ability to allow users to install an Epic App Store. They must assume there's a lot more money to be made by operating a competing store.
Well, that's interesting.
> But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool
So, Epic doesn't want money, they want the ability to allow users to install an Epic App Store. They must assume there's a lot more money to be made by operating a competing store.
A little "speculative execution" here by Epic.
They anticipated Apple's action would be to ban them, and they prepared a lawsuit and PR campaign in anticipation.
They anticipated Apple's action would be to ban them, and they prepared a lawsuit and PR campaign in anticipation.
Epic appears to have retained Cravath's antitrust team; e.g. https://www.cravath.com/cvarney/, who "is the only person to have served as both the U.S. Assistant Attorney General for Antitrust and as a Commissioner of the Federal Trade Commission."
Going after Apple for antitrust violations has a big hill to climb in the form of the Google Play Store.
More than that, a ruling against Apple here would have huge implications for any company running an app store on their device. Smart TV manufacturers, companies like Roku, Automobile manufacturers, etc... If you can be considered a monopolist because you control your platform then there will be a LOT of monopolies out there.
I'm not expecting Epic to get any real traction on this suit. The best they can hope for is Apple working out some system where they'll reduce their cut in certain circumstances, but given how unlikely this case is to go anywhere I don't think Apple is feeling any pressure.
More than that, a ruling against Apple here would have huge implications for any company running an app store on their device. Smart TV manufacturers, companies like Roku, Automobile manufacturers, etc... If you can be considered a monopolist because you control your platform then there will be a LOT of monopolies out there.
I'm not expecting Epic to get any real traction on this suit. The best they can hope for is Apple working out some system where they'll reduce their cut in certain circumstances, but given how unlikely this case is to go anywhere I don't think Apple is feeling any pressure.
Apple is about to get bitten hard for being a monopoly.
I hope the government considers the harshest punishment of all: splitting up Apple into hardware and software+services entities.
This is absurd that Apple has built a fiefdom on America's most popular generic computer device. It's a threat to freedom! We can only compute what the overlords allow and can tax? What a crock!
The fact that Apple thinks they can extort more protection money from developers than the government does in taxes is an affront. But the freedom aspect should have everyone out with their pitchforks.
This after Apple created an environment where its users, many of whom have lots of disposable income for buying goods and services, expect apps to be $0.99 and come with free updates for life. Meanwhile Apple's own products are luxury priced. And they still take 30%.
US Government, please force Apple to open up iPhone to any software we want to install. It's a generic computer. It's how we communicate, do banking, do basic shopping, dating, business ... everything. Apple can't be the gatekeepers of 21st century life. It's incredibly damaging to our ability to innovate and succeed as small business owners and entrepreneurs.
Apple, you are the tyrant king. Long have we suffered under your rule. We won't stand for it any longer and we demand our freedom.
I hope the government considers the harshest punishment of all: splitting up Apple into hardware and software+services entities.
This is absurd that Apple has built a fiefdom on America's most popular generic computer device. It's a threat to freedom! We can only compute what the overlords allow and can tax? What a crock!
The fact that Apple thinks they can extort more protection money from developers than the government does in taxes is an affront. But the freedom aspect should have everyone out with their pitchforks.
This after Apple created an environment where its users, many of whom have lots of disposable income for buying goods and services, expect apps to be $0.99 and come with free updates for life. Meanwhile Apple's own products are luxury priced. And they still take 30%.
US Government, please force Apple to open up iPhone to any software we want to install. It's a generic computer. It's how we communicate, do banking, do basic shopping, dating, business ... everything. Apple can't be the gatekeepers of 21st century life. It's incredibly damaging to our ability to innovate and succeed as small business owners and entrepreneurs.
Apple, you are the tyrant king. Long have we suffered under your rule. We won't stand for it any longer and we demand our freedom.
Epic has a good argument that Apple is engaging in illegal "tying" - requiring that to buy B, you must also buy A, where A and B are not inherently tied tightly together
AT&T lost that one decades ago. At one time phone users could only use a rented AT&T phone. (Or modem, and AT&Ts modems were huge, expensive, and included a dial and handset.) See "Carterphone decision".
AT&T lost that one decades ago. At one time phone users could only use a rented AT&T phone. (Or modem, and AT&Ts modems were huge, expensive, and included a dial and handset.) See "Carterphone decision".
Summary
1) iOS devices are a large market (Over 1.5 BILLION devices)
2) iOS users spend more then Android users
3) Apps must be independently developed for each platform
4) Apple’s Monopoly Power in the iOS App Distribution Market. (p20) As it is the sole means by which apps are distributed to consumers in the iOS Market.
5) Non-iOS app distribution platforms do not constrain Apple’s monopoly power in the iOS App Distribution Market because they are not compatible with iOS devices, they cannot provide iOS users with apps for their devices, and they do not contain iOS compatible apps.
6) Apple imposes unreasonable restraints and unlawfully maintains a monopoly in the iOS App Distribution Market through several anti-competitive acts, including technical restrictions - Cannot download alternative app stores
- App store is preinstalled
- Contractual restrictions on distributing iOS apps outside the app store
- Section 3.3.2(b) of the Developer Agreement prohibits “Application[s]” that “create a store or storefront for other code or applications”. (p25 C75)
7) Apple’s anti-competitive conduct harms all would-be app distributors by foreclosing them from competing in the iOS App Distribution Market. (p26 D88)
8) Apple has a monopoly over the iOS In-App Payment Processing Market and, in the alternative, over the iOS Games Payment Processing Market, as it has a 100% market share.
9) The cost of alternative electronic payment processing tools, which Apple does not permit to be used for the purchase of in-app digital content, can be one tenth of the cost of In-App Purchase.
Electronic Payment Processing Tool, Base U.S. Rate
PayPal 2.9%
Stripe 2.9%
Square 2.6%-3.5%
Braintree 2.9%
1) iOS devices are a large market (Over 1.5 BILLION devices)
2) iOS users spend more then Android users
3) Apps must be independently developed for each platform
4) Apple’s Monopoly Power in the iOS App Distribution Market. (p20) As it is the sole means by which apps are distributed to consumers in the iOS Market.
5) Non-iOS app distribution platforms do not constrain Apple’s monopoly power in the iOS App Distribution Market because they are not compatible with iOS devices, they cannot provide iOS users with apps for their devices, and they do not contain iOS compatible apps.
6) Apple imposes unreasonable restraints and unlawfully maintains a monopoly in the iOS App Distribution Market through several anti-competitive acts, including technical restrictions - Cannot download alternative app stores
- App store is preinstalled
- Contractual restrictions on distributing iOS apps outside the app store
- Section 3.3.2(b) of the Developer Agreement prohibits “Application[s]” that “create a store or storefront for other code or applications”. (p25 C75)
7) Apple’s anti-competitive conduct harms all would-be app distributors by foreclosing them from competing in the iOS App Distribution Market. (p26 D88)
8) Apple has a monopoly over the iOS In-App Payment Processing Market and, in the alternative, over the iOS Games Payment Processing Market, as it has a 100% market share.
9) The cost of alternative electronic payment processing tools, which Apple does not permit to be used for the purchase of in-app digital content, can be one tenth of the cost of In-App Purchase.
Electronic Payment Processing Tool, Base U.S. Rate
PayPal 2.9%
Stripe 2.9%
Square 2.6%-3.5%
Braintree 2.9%
Saw on reddit and agree 100%
> I will say it's a VERY smart move by Epic to position Apple against customers by no longer making it "Apple is taking 30% from epic" to "Apple is taking 20% from you"
> I will say it's a VERY smart move by Epic to position Apple against customers by no longer making it "Apple is taking 30% from epic" to "Apple is taking 20% from you"
IMO The key takeaway is that developers are no longer afraid of Apple. Epic Games move would be unthinkable a few years ago. Looks like this will become common practice. Epic Games joins Spotify, what will be joined by X, Y.
Maybe at some point multiple developers will also follow and also file legal actions.
Maybe at some point multiple developers will also follow and also file legal actions.
> Apple has asserted that blocking third-party app distribution platforms
is necessary to enforce privacy and security safeguards. [...] A simple comparison to how Apple handles third-party software on its Mac personal computers illustrates how baseless its justifications are.
Clever. Now Apple will either need to (1) state that Macs are insecure and bad for privacy, or (2) admit that there is no privacy/security benefit from the App Store rules.
Clever. Now Apple will either need to (1) state that Macs are insecure and bad for privacy, or (2) admit that there is no privacy/security benefit from the App Store rules.
ok am going to put a highly objectionable comment.
I buy stuff on apple store because its easy and SAFE.
That safety point is more important than ever, if there was no app store or lets say having 10 other app stores , i wont have the same level of confidence and heck i wont even be spending any dollars out there.
Over to Apple's 30 % cut, i dont know whats the call here, to make it 0%? ,10% , 20%? what if the same fortnite (or any other company) increases the bill to $9.99 next week :)
Am saying this purely from a consumer perspective that i dont care how apple and devs split the money as long as it doesnt bite me ...
I buy stuff on apple store because its easy and SAFE.
That safety point is more important than ever, if there was no app store or lets say having 10 other app stores , i wont have the same level of confidence and heck i wont even be spending any dollars out there.
Over to Apple's 30 % cut, i dont know whats the call here, to make it 0%? ,10% , 20%? what if the same fortnite (or any other company) increases the bill to $9.99 next week :)
Am saying this purely from a consumer perspective that i dont care how apple and devs split the money as long as it doesnt bite me ...
Seems like they were prepared to do this all along
A 65 page lawsuit? How long was Epic planning this, and how did they manage to time it right after Apple's antitrust hearing?
Go Epicgames! The #freefortnite campaign is bold; it’ll require users being proactive for it to maintain its momentum.
I love the the things that both companies make, but I’m not in favor of the App Store’s monopoly. I’m excited to see the outcome of this lawsuit but not very excited to wait for a long, drawn out process that the US legal system lends itself to.
I love the the things that both companies make, but I’m not in favor of the App Store’s monopoly. I’m excited to see the outcome of this lawsuit but not very excited to wait for a long, drawn out process that the US legal system lends itself to.
I have zero interest in replacing one tyrant with another. Epic games doesn't care about what Apple is doing, they just want to do it themselves.
They keep trying to buy the PC gamer market, and it doesn't take much of an imagination to guess what they'd do if they got control of it.
They keep trying to buy the PC gamer market, and it doesn't take much of an imagination to guess what they'd do if they got control of it.
It will be funny to read Apple's excuses how they are not a monopoly and how consumers are benefiting from their no competition allowed policy.
This is a bit cynical of me but I thought it was interesting: In the PDF their legal says this:
> in the years since, Fortnite has topped 350 million players and has become a global cultutral phenomenon.
Interestingly, this 350 million players number appears to have been announced back in May [0]. Of course it is somewhat likely that their legal team just Googled this number instead of sourcing an updated figure from Epic, but could it potentially be that Fortnite's growth has stagnated? It definitely feels as though it has left the zeitgeist compared to years gone by, and it could be that Epic has calculated that the payoff of this suit could exceed the amount of V-Bucks they were expecting to sell through the iOS version of Fortnite. Certainly a big gamble, but it's possible that the situation may be dire enough to make it worth it. Of course they attempt to make it look like this isn't what they want by not demanding a cash payoff, but the obvious play is that if they win then a) they will be able to sell V-Bucks again for presumably a higher margin, and b) they will launch their own Epic app/game store and take a small cut of those transactions.
https://www.theverge.com/2020/5/6/21249497/fortnite-350-mill...
https://www.theverge.com/2020/5/6/21249497/fortnite-350-mill...
I have zero sympathy for a corporation that thinks everyone should have to pay them a 30% cut of everything, but that they shouldn't have to pay any tax themselves.
Looks like this was the plan all long. Now to see whether or not the risk of implementing their own payments system for V-Bucks is worth the potential revenue loss they will incur with the app being removed from the store.
I feel like its only a matter of time until the EU pins something to Apple, if the US won't address this issue, the EU will.
They've now posted an FAQ site to ask their fans to complain to Apple with the #FreeFortnite hash tag.
https://www.epicgames.com/fortnite/en-US/news/freefortnite
(this beef is fascinating to watch)
https://www.epicgames.com/fortnite/en-US/news/freefortnite
(this beef is fascinating to watch)
As someone without legal knowledge, it surprised me that the NATURE OF THE ACTION section reads more like a blog post than what I would expect in a legal document.
I've reached point 7 and so far I'm seeing a lot of demagoguery. Not that I'm in love with Apple or its business practices, but for example is "tax" the right word for something that isn't a government entity? Or e.g. does a judge care what happened in 1984 or what that ad campaign looked like? That one's in there (point 1, right at the top) for the press, I suppose.
Demonstrate some relevant facts and just let them be what they are, and if they aren't how you want, that's called being "wrong?" I dunno, maybe I'm being naive or maybe my courtroom (if I were a judge) would be a hell of a place to try that horseshit.
Demonstrate some relevant facts and just let them be what they are, and if they aren't how you want, that's called being "wrong?" I dunno, maybe I'm being naive or maybe my courtroom (if I were a judge) would be a hell of a place to try that horseshit.
Most of the focus on the legal position but the damage to Apple's brand shouldn't be underestimated here. Hey was a big deal for a small group but Fortnite will hit a much, much wider audience.
The 1984 video was a clever and calculated move.
The 1984 video was a clever and calculated move.
This is bigger than Apple, it would be a massive precedent if they pull it off.
And it gets to my major concern with the possible merging of iOS and MacOS. I don't mind curation on my phone, but it's a deal breaker for my PC
Epic is trying to sue an near $2 trillion dollar company. It's very dangerous to sue them alone. You need Microsoft and Facebook to back you guys up given that they kicked their apps out too.
Unfortunately, this app store sheriff is unreal.
Unfortunately, this app store sheriff is unreal.
in seeking moderate profits, apple has put themselves into a corner. they literally sold the cow, to pay for the donkey's medicine. apple can't argue that users having alternative means to install apps is insecure, as they allow to that on the mac. they also can't argue about anti-competitive practices and monopoly tendencies e.g 30% cut. only way out was if the 30% was a cut directly to the gvt. whoever is running apple services is one of the most sighted exec's in history.
For all Apple's faults, they've actually put a huge amount of effort to making payment processing seamless for the user, while also making it extremely transparent. I get regular notifications if I have a subscription trial about to expire, and it's super easy to manage ALL subscriptions through a single UI, and cancel them with a single click. This would not be possible through third-party systems, which I can guarantee would put huge effort into tricking users rather than making it easier for them. And yet again, Apple would receive the blame for allowing these Apps.
All that said I also don't agree with Apple taking a huge 30% cut, especially for subscription services that directly complete with them such as Netflix. Though obviously there are costs to run this ecosystem, so Apple also can't just charge nothing. I see both sides of this argument, and I don't see a middle ground that can please all sides. There needs to be a reasonable compromise somewhere in the middle.