Apple says Epic’s Fortnite payment scheme “is theft, period.”
Stop, thief! —
iOS’ App Store requirement is needed for “security and privacy,” Apple adds.
Apple is going on the offensive in its continuing legal battles with Epic Games over the iOS version of Fortnite. In a wide-ranging motion filed Tuesday afternoon, Apple defended itself against Epic’s legal charges while also accusing the Fortnite maker of breach of contract and outright theft in a countersuit.
“Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store,” Apple writes.
Who pays for what?
In its own legal filings, Epic in part seeks the right to provide what it calls “competitive payment processing on iOS” by going around the in-app purchase system built into the iOS App Store. Epic attempted to do this unilaterally last month by adding a discounted Epic Direct Payments option to the iOS version of Fortnite, a move that led Apple to bar Epic from the App Store entirely.
Besides being a breach of contract, Apple says in its motion that Epic’s addition of Direct Payments was a “Trojan Horse” that amounts to “little more than theft.” By using a “hotfix” update method that was deliberately concealed from the usual App Store review process, Apple says Epic “sought to enjoy all of the benefits of Apple’s iOS platform and related services while [lining] Epic’s pockets at Apple’s expense.”
Later in the motion, Apple says Epic’s introduction of Direct Payments in the game “is theft, period.”
Epic has happily agreed to Apple’s contractual terms to access iOS development since 2008, Apple writes, earning over $600 million from App Store sales in that period. The fact that Epic no longer accepts that deal “does not provide cover for Epic to breach binding contracts, dupe a long-time business partner, pocket commissions that rightfully belong to Apple, and then ask this Court to take a judicial sledgehammer to one of the 21st Century’s most innovative business platforms simply because it does not maximize Epic’s revenues,” Apple writes.
The 30-percent iOS sales commission that Epic tried to get around is much more than a simple fee for processing payments, Apple adds. Instead, that fee “reflects the immense value of the App Store, which is more than the sum of its parts and includes Apple’s technology, tools, software for app development and testing, marketing efforts, platinum-level customer service, and distribution of developers’ apps and digital content.” That includes over 150,000 APIs that Apple has created to ease iOS development, the company writes, as well as the Metal graphics API that Epic itself has praised in the past.
“The App Store is not a public utility,” Apple wrote in a letter to Epic in July in response to Epic’s request. Epic has no right to reap “all the benefits Apple and the App Store provide without having to pay a penny,” the company said.
No, you can’t have your own App Store
In its own recent filings, Epic says it “does not seek to force Apple to provide distribution and processing services for free, nor does Epic seek to enjoy Apple’s services without paying for them.”
Instead, Epic says it would like “the freedom not to use Apple’s App Store or IAP, and instead to use and offer competing services” on Apple’s hardware, just as it can on Windows PCs. That’s not possible, though, because of what Epic says is Apple’s monopolistic control over the market for all iOS software.
Apple says directly in its motion that it “is not a monopolist of any relevant market” and that “competition both inside and outside the App Store is fierce at every level: for devices, platforms, and individual apps.” More than that, though, Apple says the requirement that all iOS purchases go through the App Store infrastructure is necessary to “ensure that iOS apps meet Apple’s high standards for privacy, security, content, and quality.”
Apple cites Epic’s own example on other platforms as proof of this necessity. When Epic started distributing the Android version of Fortnite independently in 2018, Apple writes that “immediately sites appeared that not only advertised Android Fortnite but also distributed malware in the game.” Apple also cites security vulnerabilities in that independently distributed Android version as evidence that its iOS protections are necessary.
“Although Apple does not leave it to any developer to keep the iOS platform safe and secure, Epic in particular had demonstrated that it could not be entrusted with this type of responsibility,” Apple writes.
In addition to compensatory and punitive damages related to the breach of contract and other related violations, Apple is seeking an injunction preventing Epic from continuing to use its own external payment processing mechanism in extant copies of the iOS version of Fortnite or future apps.