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Why Apple is refusing to reinstate Epic’s developer account despite a promise to play by the rules

The account was terminated last year, locking the two companies in a legal dispute that might not end any time soon.

“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,” Epic Games CEO Tim Sweeney tweeted on September 22.

Fortnite’s developer account was terminated in August 2020 for violating App Store guidelines by allowing its users to pay directly to Epic for in-app purchases rather than through Apple’s billing system.

Didn’t a US court issue a verdict on this issue?

Yes. On September 10, US Judge Yvonne Gonzalez Rogers gave his verdict on the long-running and monumental Apple vs Epic lawsuit. While Judge Rogers ruled that Apple must allow iOS apps to direct users to purchasing mechanisms other than the one offered by the company, he ruled in favour of the iPhone maker on all other counts.

Notably, the judge ruled that Epic Games was in breach of its contract with Apple when it implemented an alternative payment system in Fortnite and that Apple does not have to reinstate Fortnite’s developer account and it can choose to terminate other Epic-affiliated developer accounts as well.

Predictably, Epic Games has filed an appeal. And now Apple, through its lawyers, is saying that Epic’s developer account will not be reinstated “until the district court’s judgment becomes final and non-appealable.”

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Didn’t Apple say it will allow Fortnite if Epic played by the rules?

Yes. “As we’ve said all along, we would welcome Epic’s return to the App Store if they agree to play by the same rules as everyone else,” Apple said as recently as two weeks ago.

And a week ago, in a letter to Apple, Sweeney wrote: “Epic promises that it will adhere to Apple’s guidelines whenever and wherever we release products on Apple platforms.”

Despite this assurance, Apple’s lawyers responded saying that because of Epic’s recent statements and “duplicitous conduct in the past, Apple has exercised its discretion not to reinstate Epic’s developer program account at this time.” This enraged Sweeney.

But, Epic’s promise came with a caveat

While the letter from Sweeney to Apple says that Epic will play by the rules, this statement is in relation to the Mac version of Fortnite and the other games and apps that Epic makes.  “Whether Epic chooses to bring Fortnite back to iOS consumers depends on whether and where Apple updates its guidelines to provide for a level playing field between Apple In-App Purchase and other methods of payment,” the letter clarifies.

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“Epic will resubmit Fortnite to the App Store if you adhere to the plain language of the court order and allow apps to include buttons and external links that direct customers to other purchasing mechanisms without onerous terms or impediments to a good user experience,” Sweeney added.

So Epic is not saying that it will submit a version of Fornite that adheres to the current App Store guidelines, which is what Apple probably wants to hear, and which is what Apple possibly meant when it said it “would welcome Epic’s return to the App Store if they agree to play by the same rules as everyone else.”

The App Store guidelines haven’t changed yet to allow alternative payment systems because the company has until December to implement the court’s order and it might decide to appeal the decision.

Apple has been lenient with Epic’s other developer accounts

“So here’s the thing to keep in mind, and that I think Sweeney purposefully muddled in the way he announced this news,” John Gruber writes in Daring Fireball:

Epic is a conglomerate with multiple subsidiaries, and those subsidiaries have their own Apple Developer Program accounts. The only developer account Apple ever disabled in this dispute was the one held by Epic Games, Inc. — the Fortnite account. It was disabled on 28 August, 2020 and has been disabled ever since.

Accounts that have never been disabled include the accounts for Rocket League (a game whose Mac support Epic discontinued in January 2020, exemplifying Epic’s “wholehearted” support for “Apple platforms”), and separately and importantly, Unreal Engine. It is true that Apple moved to block the Unreal Engine account back in August 2020, but Judge Yvonne Gonzalez Rogers ordered Apple not to pending a decision in the case, while allowing the Fortnite account to be blocked. In her ruling this month, however Gonzalez Rogers stated that Apple would now be in its rights to disable any and all of Epic’s Apple developer accounts for breaching the license agreement.

My understanding is that none of those accounts are affected by Apple’s decision not to reinstate the Fortnite developer account. Those accounts have been operational throughout this legal dispute, and I believe will continue to be — by Apple’s choice.

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Significant implication for the evolution of metaverse: Epic

“This is another extraordinary anti-competitive move by Apple, demonstrating their power to reshape markets and choose winners and losers,” Epic said in a blog post.

“The loss of Fortnite as an iOS metaverse competitor alongside Roblox and PUBG Mobile has significant implications for the evolution of the new medium of our era,” the Fortnite maker added.


Full transcript of Tim Sweeney’s email to Apple

From: Tim Sweeney
Date: Thu, Sep 16, 2021 at 5:01 PM
Subject: Fortnite and the App Store
To: Phil Schiller

Hi Phil,

I’m writing to provide clarity on where we stand.

Epic has appealed the court’s decision in our suit over Apple’s policies on In-App Purchase and competing stores. Though we can’t update the Fortnite version that users still have on their iOS devices, we’ve disabled Epic payments server-side, and have paid Apple $6,000,000 as ordered by the court.

Epic has asked Apple to reactivate our Fortnite development account. Epic promises that it will adhere to Apple’s guidelines whenever and wherever we release products on Apple platforms. If we get the account back, we’ll bring Fortnite back to Mac as soon as possible, and we’ll reincorporate Fortnite for iOS in our Unreal Engine development and testing process, which will benefit all of our mutual developers.

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Whether Epic chooses to bring Fortnite back to iOS consumers depends on whether and where Apple updates its guidelines to provide for a level playing field between Apple In-App Purchase and other methods of payment.

Epic will resubmit Fortnite to the App Store if you adhere to the plain language of the court order and allow apps to include buttons and external links that direct customers to other purchasing mechanisms without onerous terms or impediments to a good user experience. In that case, our remaining dispute will be about competing stores, and I genuinely believe we could find common ground on the topic if Apple’s position were based solely on user security and privacy rather than commercial interests.

As a provider of developer tools, Epic continues to support Apple platforms and our mutual developers wholeheartedly.

If you have any questions or thoughts, I’m happy to talk.

Tim Sweeney
Epic Games

Full transcript of Apple’s letter to Epic

September 21, 2021

VIA ELECTRONIC MAIL

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Gary Bornstein
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475

Re: Developer Program Account No. 8XJ6WJ8Z84

Dear Gary,

I am responding to your recent request that Apple reinstate Epic’s developer program account, which was terminated for cause last year. Epic committed an intentional breach of contract, and breach of trust, by concealing code from Apple and making related misrepresentations and omissions. In its decision, the court recognized that “Apple had contractual rights to act as It did. It merely enforced those rights as [Epic’s] own internal documents show Epic Games expected.” ECF No. 812 at 178-79. The court further found that “Apple’s termination of the [Developer Program License Agreement] and the related agreements between Epic Games and Apple was valid, lawful, and enforceable.” Id. at 179. Following that decision, Mr. Sweeney has publicly said that Epic “[w]ouldn’t trade [an alternative payment system] away to get Fortnite back on iOS.” In light of this and other statements since the court’s decision, coupled with Epic’s duplicitous conduct in the past, Apple has exercised its discretion not to reinstate Epic’s developer program account at this time. Furthermore, Apple will not consider any further requests for reinstatement until the district court’s judgment becomes final and nonappealable.

Sincerely,

/s/ Mark A. Perry
Mark A. Perry

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