Epic Games, Inc. v. Apple Inc., the App Store Battle

Photo Source: VRScout.com

Epic Games, Inc. (“Epic”), the multi-billion dollar video game developer and creator of the hit game Fortnite, sued Apple Inc. (“Apple”) on August 13, 2020 in Federal Court. Epic’s complaint alleges that “Apple Monopolizes the iOS App Distribution Market[,]” and “Apple Monopolizes the iOS In-App Payment Processing Market[.]” Epic alleges six different violations of the Sherman Anti-Trust Act. The Sherman Anti-Trust act is an anti-trust law that prohibits monopolization and was passed back in 1890.

While this lawsuit may have seemed to come out of nowhere, the tension between Epic and Apple has been building for some time. Epic’s CEO, Tim Sweeney, has spoken out regarding Apple’s control over the app store. For example, on July 24 Sweeney told CNBC that the App Store is an “absolute monopoly.” Sweeney’s disdain for Apple’s App Store came to a head on August 13th when Epic introduced a direct payment option in their Fortnite app. This direct payment option allowed players to receive a 20% discount on V-Bucks, Fortnite’s in-game currency, by circumventing Apple’s in-app purchase mechanism. This direct payment option is a violation of Apple’s App Store Guidelines. As a result of Epic’s violation of Apple’s Guidelines, Apple removed Fortnite from the App Store that same day. After the removal of Fortnite from the App Store, Epic filed what appears to be a prepared lawsuit against Apple in California. Epic argues that the 30% commissions Apple and Google take are unfair, oppressive, and hurt developers and are a violation of the Sherman Act, the California Cartwright Act, and California’s Unfair Competition Law. Meanwhile, Epic has filed a similar lawsuit against Google after Fortnite was removed from the Google Play Store for violating the Play Store’s Terms of Service. The tech giant claims that its case is far different than Apple’s as the Google Play Store allows other app stores to be installed on their devices.

Not only did Epic file a prepared lawsuit against Apple, they initiated an attack through their social media as well. Epic shared a video called “Nine Eighty-Fortnite” which was a parody of Apple’s “1984” ad. Epic aims to depict Apple as the new “Big Brother.” Furthermore, Epic has attempted to gain the public’s favor even more by stating that they are not seeking damages versus Apple. Instead, Epic is claiming that they are simply seeking to end Apple’s dominance over the App Store. This is especially noteworthy because if Apple was found liable for violating the Sherman Act, Epic would be entitled to treble damages under the Sherman Act!

The gaming community, tech industry, and app developers around the world are watching this case closely as it could bring some major changes. Apple has been able to control its App Store for some time, but Epic is ready to change that. Only time, and a lengthy court process, will tell what fallout this epic lawsuit brings.

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