Days after removing Epic Games’ popular game Fortnite from the iOS App Store, Apple has threatened it with termination of all of its developer accounts and to cut Epic from iOS and Mac development tools by August 28. Epic has filed a motion in a California court to stop Apple from doing so. Apple meanwhile, in a statement to the Verge, said that the “problem Epic has created for itself can be remedied” if Epic complies with App Store guidelines.
Epic is currently in the middle of a legal battle with Apple and Google after the companies removed Fortnite from respective app stores after Epic started offering a direct payment mechanism to users, essentially bypassing in-app purchases that both the companies mandate.
If Apple were to terminate all of Epic’s developer accounts, it will have far reaching consequences on not just Fortnite, but on an array of developers who use a program developed by Epic, called Unreal Engine, to develop their own apps. Unreal Engine is used in the development of not just popular games such as PUBG (a Fortnite competitor), and Mortal Kombat, but also by TV shows like The Mandalorian on Disney+. “Unreal Engine is used to develop a wide array of products including games, films, biomedical research and virtual reality. Millions of developers rely on the Unreal Engine to develop software, and hundreds of millions of consumers use that software,” Epic said in the motion.
Apple removed Fortnite from the App Store and has informed Epic that on Friday, August 28 Apple will terminate all our developer accounts and cut Epic off from iOS and Mac development tools. We are asking the court to stop this retaliation. Details here: https://t.co/3br1EHmyd8
— Epic Games Newsroom (@EpicNewsroom) August 17, 2020
What Apple’s retaliation means to the future of Unreal Engine: After the lawsuit was filed, Apple told Epic that by August 28, it will “cut off Epic’s access to all development tools necessary to create software for Apple’s platforms—including for the Unreal Engine Epic offers to third-party developers, which Apple has never claimed violated any Apple policy. Not content simply to remove Fortnite from the App Store, Apple is attacking Epic’s entire business in unrelated areas,” Epic Games said in the motion.
“If the Unreal Engine can no longer support Apple platforms, the software developers that use it will be forced to use alternatives. The damage to Epic’s ongoing business and to its reputation and trust with its customers will be unquantifiable and irreparable.” — Epic Games
Epic said that a preliminary injunction was “necessary” to prevent Apple from “crushing Epic before this case could ever get to judgment”. In the motion it also said that Apple should be ordered to restrain from “removing, de-listing, refusing to list or otherwise making unavailable the app Fortnite, including any Fortnite update, from the App Store because it provides Fortnite users choice and lower prices on in-app purchases”.
Apple’e behaviour amounts to being anti-competition, says Epic: “Apple’s conduct constitutes per se illegal tying under Section 1 of the Sherman Act”, Epic alleged in the motion. The section prohibits agreements in restraint of trade, such as price-fixing, refusals to deal, bid-rigging, etc. “Epic will be able to show anti-competitive effects in the iOS In-App Payment Processing Market: but for Apple’s tie, Epic, other app developers and dedicated third-party payment processors could enter and compete for market share, which would cause increased innovation and lower prices. There is no legitimate pro-competitive justification for Apple’s restraint,” Epic added.
Access to the iOS platform is an “essential facility for app developers, and conditioning that access on acquiescence not to compete against Apple in the In-App Payment Processing Market maintains Apple’s monopoly there,” Epic noted in the motion.
Over 50% iOS Fortnite users chose Epic’s payment method: Epic also revealed in the motion that since August 13, when the direct payment option was first launched, until August 16, more than half of iOS Fortnite players who made an in-app purchase chose to use Epic’s direct payment over Apple’s mandated payment mechanism. This isn’t surprising as purchases made via Epic’s direct payment method were cheaper.
‘We won’t make an exception for Epic’, says Apple: “We very much want to keep the company as part of the Apple Developer Program and their apps on the Store. The problem Epic has created for itself is one that can easily be remedied if they submit an update of their app that reverts it to comply with the guidelines they agreed to and which apply to all developers. We won’t make an exception for Epic because we don’t think it’s right to put their business interests ahead of the guidelines that protect our customers,” Apple said in a statement to the Verge.