A US federal judge ruling will allow Apple to continue to bar the Fortnite game from its App Store, but also sets out that it cannot harm publisher Epic Games’ developer tools business, which includes the Unreal Engine software use by other video games.
In an escalating battle over Apple’s App Store fees, US district judge Yvonne Gonzalez Rogers handed a partial victory to Apple, denying Epic’s request to temporarily reinstate Fortnite while the two battle in court.
Judge Rogers said in her ruling that Apple’s ban of the game could continue because Epic had violated its contract with Apple. There is “significant public interest” in requiring companies to adhere to contracts or resolve disputes through the normal course, she wrote.
But she warned Apple not to hurt other companies, who rely on Epic’s “Unreal Engine” software to make games, by revoking Epic’s access to the iPhone’s development ecosystem.
“Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders,” she said.
As well as making games, Epic sells the Unreal Engine software platform, which many companies use to create their own games. Cutting Epic off from developer tools would prevent it from updating Unreal Engine, affecting thousands of other apps.
The court says that in regard to Fortnite, preliminary injunctive relief is “rarely granted,” with the ruling pointing out that an order for injunctive relief would require Epic to establish that it is likely to succeed in the legal battle, it is likely to suffer irreparable harm without relief, the balance of equities tips in its favor, and that an injunction is in the public interest, none of which Epic Games was able to do.
Epic Games has claimed that it should be given injunctive relief because it should not have to comply with an anti-competitive App Store contract, but the court has rejected this argument multiple times because Epic Games deliberately breached its contract with Apple and caused Fortnite to be banned.
Epic Games cannot simply exclaim “monopoly” to rewrite agreements giving itself unilateral benefit. Its other identified bases: damage to its reputation and the Fortnite gaming community cannot constitute irreparable harm where such harm flows from Epic Games’ own actions and its strategic decision to breach its agreements with Apple. While consumers are feeling the impact of this litigation, the fact remains: these are business disputes.
To assist, the Court even offered to require the 30% to be placed in escrow pending resolution of the trial which Epic Games flatly rejected. The refusal to do so suggests Epic Games is not principally concerned with iOS consumers, but rather, harbours other tactical moves. Epic Games admits that the technology exists to “fix” the problem by easily deactivating the “hotfix.”
In a statement, Apple said that it’s “grateful” to the court for the decision.
Our customers depend on the App Store being a safe and trusted place where all developers follow the same set of rules. We’re grateful the court recognized that Epic’s actions were not in the best interests of its own customers and that any problems they may have encountered were of their own making when they breached their agreement.
For twelve years, the App Store has been an economic miracle, creating transformative business opportunities for developers large and small. We look forward to sharing this legacy of innovation and dynamism with the court next year.
Epic sued Apple in August, claiming that the company’s 30% commission on some in-app purchases made through its App Store, combined with Apple’s controls over what apps users can download to their iPhones, constituted anticompetitive behaviour. The lawsuit came after Epic rolled out its own payment system in the popular Fortnite video game.
Apple does not allow such alternative payment systems and removed Fortnite from the App Store and threatened to terminate Epic’s developer accounts, which would have affected Epic’s other business of selling software used to create games.
Epic moved to stop Apple from taking both steps. The judge previously issued an emergency order that allowed Apple to pull Epic’s titles from the App Store but barred Apple from taking any action that would harm Epic’s developer tools.
“Epic Games has strong arguments regarding Apple’s exclusive distribution through the iOS App Store, and the in-app purchase (“IAP”) system through which Apple takes 30% of certain IAP payments”, the judge said in Friday’s ruling.
In a hearing last month, Apple said it was willing to reinstate Fortnite to its app store before a trial if Epic would return to complying with its rules. Judge Gonzalez Rogers proposed an arrangement that would put Apple’s fees from Fortnite in an escrow account until after the trial. But Epic refused, arguing that doing so would be complying with a contract it views as unlawful.
“I didn’t buy that argument before,” Judge Rogers said in the hearing.
“I’m not particularly impressed with it now.”
