Suing isn't new in the digital world. Tech giants and other big companies may not always sue others due to an actual issue, but sometimes it's just to give them a speed-breaker for the race they're in! With that said, let's discuss the recent Apple vs Epic Games Lawsuit battle.
So let's jump into the topic without any delay!
Epic Games vs Apple, (An Overview)
Epic Games v. Apple is a lawsuit filed in August 2020 in the United States District Court for the Northern District of California by Epic Games against Apple regarding Apple's activities in the iOS App Store.
Epic Games has expressly challenged Apple's prohibition on apps using in-app buying mechanisms other than those provided by the App Store.
Epic Games' creator Tim Sweeney has previously questioned Apple's 30% income share on each App Store transaction. With their game Fortnite, he intended to either skip Apple or have Apple take a smaller portion. Epic made changes to Fortnite on August 13, 2020, with the goal of circumventing the App Store payment mechanism, forcing Apple to remove the game from the App Store and resulting in Epic's lawsuit. In the counter lawsuit, Apple stated Epic Games willfully breached its contract. Apple also stated it was done to provoke them into action.
From May 3 through May 24, 2021, the trial was open to the public. Judge Yvonne Gonzalez Rogers ruled in favor of Apple on nine of ten charges in the first phase of the lawsuit in September 2021 but found against Apple on its anti-steering practices under the California Unfair Competition Law. Rogers ruled that Apple could not prevent developers from notifying app users about other payment options.
Epic also filed another complaint on the same day, Epic Games v. Google, challenging Google's identical policies on the Google Play app store for Android after Google removed Fortnite after the update for the same reasons as Apple. Google, on the other hand, has stated that the legal issue in their case is not the same as in Apple's.
When & How the Disputes Developed
It all started with unrest among the team of Epic GAmes due to the high percentage of expenses they had to share with Apple over every download and in-app purchase. Eventually, Apple was imposing a massive 30% share on any transactions.
And this spike in subsidy made Epic Games furious.
What role did Fortnite and Battle Royale play?
With the popularity of the Battle Royale mode, Epic Games wanted to extend the free-to-play game on mobile devices as Fortnite moved from personal computers to other platforms in 2018. Epic originally launched its Android client as a sideloaded program rather than a Google Play store app because they didn't want Google to profit from the game's microtransactions. However, due to security issues and several unscrupulous clones attempting to pass themselves off as the actual Fortnite game on the Google Play Store, Epic stopped the sideloaded version. Instead, it moved the game to the Google Play store in April 2020.
What's Apple saying about their 30% cut in App Store?
Apple claims that the 30% cut it takes from In-App Purchases (IAP) "reflects the immense value of the App Store". Additionally, it is covering "Apple's tech, software for app creation and examination, marketing inputs, top-notch customer service (this one is surely true, Customer Service is a thing to be considered), as well as distribution of developers' apps and other digital content" in addition to the visible features it offers developers. Apple also claims that requiring iOS apps to utilize its storefront is necessary to "ensure that iOS apps satisfy Apple's high standards for privacy, security, content, and quality" and to protect iOS users from threats posed by other shops.
Apple's Countersuit on Epic Games in 2020
To understand this we have to know a bit about the "QUARREL SIGMA RULE #1".
This is, when you're being accused, just accuse back, alongside clarifying (something politicians have been doing for decades. This will give you several benefits like more time and resources of your rival being distributed into saving themselves on the counter-attack rather than focusing 100% on attacking. Well, that's not a new trick. It's happening everywhere and all the time. We're definitely not accusing either one or taking sides here, but along with sharing facts and official incidents, just trying to explain standard market practices (sometimes advised by the hired advocate).
And it happened, Apple could not resist itself from filing a countersuit upon Epic Games on September 8, 2020. In their lawsuit, Apple claimed that Epic had broken their contract and was seeking to prohibit the use of Epic's payment system in any of their created games, including Fortnite, on the iOS marketplace, as well as monetary penalties to recoup revenue earned. At the same time, Epic's version of Fortnite remained live on August 13, 2020. Epic's lawsuit was described by Apple as an attempt "to be part of a marketing campaign aimed to reignite interest in Fortnite.
Late last night, Apple informed Epic that Fortnite will be blacklisted from the Apple ecosystem until the exhaustion of all court appeals, which could be as long as a 5-year process. pic.twitter.com/QCD7wogJef
— Tim Sweeney (@TimSweeneyEpic) September 22, 2021
" However, in November 2020, Judge Rogers rejected Apple's monetary theft allegations, finding that they could not be deemed "independently unlawful" of the breach of contract claims, but left the breach claims in place.
Who won the Lawsuit Verdict, (Explained)
When all this started last year, all the big fishes in the market stated Epic would surely fail, and Apple is already a winner. But We now see external payments on Epic Games where they're even giving a 20% discount to gamers if bought directly. You will see two payment options from now onwards, one through Apple and another directly to the developer.
This is very much a WIN for Epic Games, but the judge didn't clarify whether or not Apple can apply their 30% fees on the discounted price of Epic Games. If Apple doesn't do that, then clearly Epic Games won, otherwise not.
Today’s ruling isn't a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. https://t.co/cGTBxThnsP
— Tim Sweeney (@TimSweeneyEpic) September 10, 2021
One good takeaway from this lawsuit was that developers can now see themselves as stronger than before and can surely win lawsuits against tech giants such as Apple. It's the beginning of a fair settlement for not just Apple and Epic Games but for all such giants and the developers who rely on the store policies.
