Money and Marketing: Apple faces off against Fortnite maker over App Store rules
Apple Inc. threatened to remove Epic Games Inc.’s developer account, cut off its developer tools and limit its ability to supply key graphics technology to other apps, the latest skirmish in a battle over app store fees.
The iPhone maker’s plans were disclosed in a court filing by Epic on Monday. The developer has asked a California federal court to block Apple’s removal of the popular Epic game Fortnite from the App Store. Epic sued Apple last week over the move.
Epic also asked the court to stop Apple from terminating its developer account on Aug. 28. Epic said it will probably suffer irreparable harm if the court doesn’t order the Fortnite game app to be made available to smartphone users.
“The court cannot, on today’s motion, level the playing field against Apple,” Epic’s lawyers wrote in the filing Monday. “But the court can order that while its practices are being litigated, Apple cannot retaliate by blocking Fortnite and tools for the Unreal Engine and harm the hundreds of millions who -- especially in this time of social distancing -- use Epic’s software to play, build and stay connected.”
This represents a major escalation of an antitrust dispute that has been building for more than a year. Epic’s Unreal Engine is a suite of software tools used by millions of 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 said in its legal filing.
“I do think that is likely to be perceived as an overkill response. They are supersizing the confrontation,” said Lewis Ward, research director of gaming at IDC.
Other app developers that use Unreal Engine may be “held liable for what Fortnite did,” he added. “If that is accurate, then this is going to be a much bigger snowball.” Apple didn’t immediately respond to a request for comment.
The removal of Epic’s developer account would mean that the gamemaker can’t sell new apps to more than 1 billion iPhone, iPad and Mac users. It could mean the removal of the company’s other games. It sells one game on the Mac App Store called Shadow Complex Remastered and another iPhone and iPad game called Battle Breakers.
The disagreement stems from a longstanding Apple App Store rule saying that games must bill their subscriptions and in-app-purchases through Apple’s billing system, which charges a 30 per cent fee. On Thursday morning, Epic began offering customers a way to directly buy items for Fortnite and circumvent the fees. Hours later, Apple pulled the app. Google followed suit later in the day, removing Fortnite from its Play app store.
In its court filing, Epic highlighted comments from Apple Chief Executive Officer Tim Cook from a recent antitrust hearing in Congress. Cook was asked by lawmakers whether Apple has ever retaliated against a developer who complained publicly about the App Store. Cook said his company doesn’t “retaliate or bully people,” according to the filing.
“But Apple has done just that,” Epic wrote.
The Apple case is Epic Games Inc. v. Apple Inc., 20-cv-05640, U.S. District Court, Northern District of California (San Francisco).