Epic has appealed Friday’s ruling in the Epic v. Apple case
source link: https://www.theverge.com/2021/9/12/22670269/epic-files-appeal-fortnite-legal-battle
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Epic has appealed Friday’s ruling in the Epic v. Apple caseSkip to main content
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Epic Games has filed an appeal to a Friday’s ruling in its lawsuit against Apple, calling on a higher court to reexamine the case and overturn the judge’s ruling.
“Notice is hereby given that Epic Games, Inc.... appeals to the United States Court of Appeals for the Ninth Circuit from the final Judgment entered on September 10, 2021,” the document reads. Few details are given about the legal basis for Epic’s appeal, but it is likely to continue to press on the federal antitrust allegations dismissed by the court.
At trial, Epic argued Apple had a monopoly because of how it requires developers to use its payments system for in-game purchases. But Judge Yvonne Gonzalez Rogers ruled Friday that Epic should pay damages to Apple for violating rules around its in-app purchasing system, while undoing Apple’s most restrictive rules on steering customers to alternate payment systems.
Most notably, the judge found that Epic failed to make the case for Apple as a monopoly in the mobile gaming marketplace, which she ultimately found was the relevant market for the company’s claims. “The evidence does suggest that Apple is near the precipice of substantial market power, or monopoly power, with its considerable market share,” Judge Rogers wrote — but said the antitrust claims failed in part “because [Epic] did not focus on this topic.”
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There are 75 comments.
They have the right to appeal but Fortnite players are rightfully turning on epic. It might be time to do right by your fans (which should be top priority) take the loss and get your game back onto the hands of tens of millions of players that epic left behind. I can’t imagine the amount money epic is losing from iOS IAP’s and legal bills.
Posted on Sep 12, 2021 | 2:57 PM
Apple banned their developer account so they can’t just put Fortnite back in the store. They literally just asked to have their account reinstated due to the new law in S. Korea.
Posted on Sep 12, 2021 | 8:19 PM
Apple owes Epic nothing and isn’t obligated to restore their developer account after they deliberately precipitated all this action.
However, they have said if Epic returns to compliance with App Store rules while this all plays out in court, then yes they will reinstate the account and allow Fortnite back into the store. So, up to Epic.
Posted on Sep 12, 2021 | 8:43 PM
Yeah, Epic refused to bow down to a bully. How terrible of them.
Posted on Sep 12, 2021 | 9:40 PM
These are two massive corporate giants with infinite money, not kids in a schoolyard. The argument on both sides is entirely greed driven. Epic’s clumsy marketing spin that they’re fighting for the little guy is a joke. They’re pushing this because they want to launch their game store that everyone hates on iOS.
Posted on Sep 12, 2021 | 11:36 PM
These are two massive corporate giants with infinite money
Nevertheless, Apple is still a bully. Always has been.
Posted on Sep 13, 2021 | 1:08 AM
Yeah, if tomorrow an asteroid wipes out Apple HQ, I’ll be celebrating and launching fireworks.
Posted on Sep 13, 2021 | 1:28 AM
Epic is starting to lose the public on this one. You won the right to use your own payment system, you aren’t forced to give Apple the 30% cut anymore – take the win and move on. This futile crusade to get the judicial to acknowledge that Apple is a monopoly is a waste of time and money.
Posted on Sep 12, 2021 | 3:11 PM
None of what you said is accurate.
Epic won none of those things. Apple doesn’t even have to let Epic back in and indeed COULD take stronger action against Unreal. (Which would be foolish.)
They did "win" the right to link offsite but DID NOT win the right to prevent Apple from imposing a fee even on those offsite payment options.
But yes, I think this appeal is probably a hard sell.
Posted on Sep 12, 2021 | 3:26 PM
Hmm. If all you say is correct then Apple didn’t really lose anything. I don’t see why a company would use an external payment system and end up making less than 70% that they would otherwise make using apple’s payment.
Even if a developer is able to link to another payment system, the ruling doesn’t state they would be able to offer a different price. So for convenience why would a user opt to use another payment method!
Posted on Sep 12, 2021 | 4:13 PM
If all you say is correct then Apple didn’t really lose anything
Indeed. Go read Apple’s and Epic statements. Apple won, and Epic lost.
It’s not immediately clear to most observers that Apple won’t lose a dime on this.
Posted on Sep 12, 2021 | 4:30 PM
I don’t know where the public determined that using an off-site provider avails the developer of paying Apple’s fees. The fees are not from the payment itself, that would be ridiculous. Those are developer fees owed to the platform hosting the app, that pay for the review process. Free apps bypass the typical 30% fee for the app sale, so Apple then tacks that same fee onto in-app purchases. If the developer throws a button in an app to PayPal, they don’t suddenly not owe Apple any money just because of where the transaction was made. It’s literally written into the contract. One of the points of this case was whether that was legal, and Apple won that their contract with developers is completely legal, and they have to right to ban Epic’s account, on the matter of the violation alone, even if they pay the money owed to Apple. The public is turning on Epic, but this is now completely out of their hands – Apple has 100% of the say on whether Fortnite can ever return to the app store. They can choose to permanently ban Epic’s developer account from the iOS platform. That has more than just Fortnite keep in mind, that also has a chilling effect on whether Epic can deliver tools to game developers for their Unreal Engine on iOS. Epic bet the farm on this ruling and lost, and have put a lot of their business in jeopardy right now; and instead of begging forgiveness for the reinstatement of their developer rights, they are choosing to appeal. Literally spitting in Apple’s face. I will tell you right now, if they go forward with this appeal and lose, or the court decides not to pick up this case because they agree with the lower court’s ruling – Apple will never allow Epic back on iOS.
Posted on Sep 12, 2021 | 5:16 PM
That’s just not true though, Apple can spin it has hosting fees but at the end of the day it’s a payment fee and nothing else. If these costs were needed to cover hosting and reviews, then the developer fees that exist would reflect that.
Posted on Sep 12, 2021 | 8:15 PM
It’s not a matter of spinning it, it’s contract law. The developers agreed to the 30%, and now they are pitching a fit. The judge upheld that 30% is a payment for intellectual property of Apple, a licensing fee, not a transaction fee, that just so happens to be imposed on the transaction. I literally read the entire 180 page judgement, go see my comment below for the relevant quotes. Apple has a legal right to charge the commission, because developers agreed to those terms. Apple put forth to the court that the fee is used for their human app review process, to prevent malware on the platform, and as a licensing fee for use of their intellectual property in apps, like buttons and animations. Epic tried to argue that the contract was illegal because they are using their market dominance to impose high fees. While the judge felt that the fee has no basis to be 30% specifically, the contract stands as legal and enforceable.
Posted on Sep 12, 2021 | 8:33 PM
It’s not a matter of spinning it, it’s contract law. The developers agreed to the 30%, and now they are pitching a fit.
The fact that Apple can force developers to agree to this usurious fee means that it’s a monopolist.
In a well-running market such fees are impossible.
Posted on Sep 13, 2021 | 6:57 PM
The Judge largely bought Apple’s spin on the fees, as overall proposition, even if she side-eyed some or the details.
Posted on Sep 12, 2021 | 8:35 PM
A developer enters a contract with Apple when it wants to become a developer, and that contract includes commission rates. Those rates are regardless of method of sale. Gonzales Rogers even addresses it in her ruling, that Apple is still entitled to its commission rate for purchases made outside of In-App-Purchasing (IAP).
Posted on Sep 12, 2021 | 8:39 PM
They did "win" the right to link offsite but DID NOT win the right to prevent Apple from imposing a fee even on those offsite payment options.
They can’t enforce this so I don’t know what your point is. There is no way it would fly legally that Apple will demand all developers to submit the equivalent of a tax filing for all money made through the App Store without drawing even more anti-trust lawsuits.
Posted on Sep 12, 2021 | 5:26 PM
Literally from the judge herself.
"The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions,"
Posted on Sep 12, 2021 | 5:38 PM
Thanks for quote, seems I was mistaken. Will be interesting to see if Apple decides to enforce this then.
Posted on Sep 12, 2021 | 8:58 PM
It’s absolutely enforceable. Or some other fee structure as well. If Apple is not a monopoly, and this judge says they are not, then they are able to pretty much demand what they like for the right to have an app in their store. Practical limitations certainly limit this, such as scaring away developers. But they are able to set the terms and the developers can take or leave them.
Posted on Sep 12, 2021 | 8:11 PM
They CAN enforce it. The Judge said devs can’t prevent them from enforcing a commission. She said it would require more work for Apple to COLLECT one (and also incidentally more work for a developer to pay one) but it’s not true that It wouldn’t be legal.
Posted on Sep 12, 2021 | 8:25 PM
There is no realistic way for Apple to take commission on outside payments via auditing. Some of the largest developers are based in countries where auditing is, shall we say, less rigid than in other countries. You’ll have developer A who submitted to a full and proper audit, suing Apple because their competitor (based in another market but targeting users in the same market) fudged the audit and an gained unfair advantage, and then Apple has to audit the audit… It would be a legal and practical mess. And that’s to say nothing of crypto payments and the difficulty of tracking and auditing those (devs can offer any form of outside payment, that’s up to the court and not Apple).
Apple also can’t easily do a sort of flat rate commission based on "clicks out" either, as competitors can click bomb competing apps (even Google after all these years struggles with this) and of course the value of and purpose clicks out would vary dramatically, and on and on. So more legal action that would be very difficult to counter and would further change the landscape. Basically trying to apply a % commission on payments made outside of the app and thus off the radar would likely be so impractical as to be a non-starter. The only way might be to increase developer fees independently of payments received.
Posted on Sep 12, 2021 | 11:17 PM
Yes you can, and actually is standard practice in many industries. Agreed the rigorousness and efforts required would need to increase but is entirely normal.
basis – I’m a chartered accountant and ex-auditor
Posted on Sep 13, 2021 | 7:04 AM
And what if the developer is an individual? There are many apps with millions (or hundreds of millions) of downloads in the US listed under the personal names of foreign individuals (not companies), folks who have no idea what a corporate audit entails. And what if the "developer" is BVI holding company, which requires no annual reporting whatsoever? How are they to be audited? (You better believe there are more than a few of those.) And what if the app with millions of downloads is a very successful a NFT game put together by a few 19 year olds in South Ossetia? Do Ernst and Young have offices in South Ossetia? Or And so on. The international element combined with the low bar to entry, ability to scale and the focus on games make the App Store very different beast to say the shipping industry, or to any industry commonly audited.
And then if you just offer the ability to direct users outside to US developers, well that opens up an even bigger can of worms.
Posted on Sep 13, 2021 | 8:37 AM
And what if the developer is an individual?
Presumably, if Apple went this route, they’d just suspend the developer account of any developer not complying.
I doubt anyone disagrees that it would be more work (on both sides) and the Judge even called this out as a point in favor of Apple’s system as it exists today.
But it’s a choice between forgoing whatever revenue they’d make from those outside sales or putting in the work. My only point is that it makes far more sense to just accept this as the new status quo and find a creative way to live within the parameters as they are set out.
Posted on Sep 13, 2021 | 10:17 AM
It’s not so much about non-compliance — putting aside individuals and companies that do not have public reporting, etc. (a non-little chunk of App Store revenue) even for companies that do submit to an audit it’s a terrible can of worms.
Picture this. American mobile game studio loses category share (in America, mind you) to Chinese mobile game studio. Why? Because Chinese mobile game studio has a lot more to spend on user acquisition. US studio suspects China studio is paying far less to Apple in commission than they ought to and are funnelling the savings into user acquisition to squeeze US studio out. US studio says so. China studio says hey guys, come on, we’re audited, we comply, Apple has the PDF. US studio shakes head, does not trust an audit done by a Chinese provincial auditing firm (but who else can audit firms in that province?). Anyway too late, US studio files for bankruptcy. Story goes viral. Congress steps in. Congress to Apple: "Let me get this straight, you are punishing American business on the word of Chinese provincial auditing firms?"
Posted on Sep 13, 2021 | 11:02 AM
You’re just describing the problems inherent to virtually any auditing systems. This is not a new problem, even assuming it now could become a new problem for Apple.
But here’s the issue: Apple HAD a solution. They were told that solution doesn’t fly. So now being told that they’re not allowed to try and collect (even though the law says they can) gets to the point where congress is telling a company they’re not legally allowed to seek a commission the law says they are owed and I highly doubt that survives a challenge all the way to SCOTUS.
Posted on Sep 13, 2021 | 1:35 PM
They are legally allowed to seek a commission. But they are not practically able to execute a per-transaction commission. Or likely legally, because the steps they need to execute practically open new legal questions (but that doesn’t even matter if it’s not practically doable). So they would have to find a different way of seeking that compensation.
And those aren’t the problems inherent to virtually any auditing system. They are only problems inherent to an auditing system that is commission based and for whom the business audited can be in any country, of any structure, in any standing, with any history, and any reporting (or none), with any amount of revenue, or an individual, and with customers in any country, and any number of customers in each, etc. When you drill down you see it’s an auditing system that’s pretty much one of a kind. Or two of a kind.
Posted on Sep 13, 2021 | 9:15 PM
I don’t think this will be hard at all. Apple should be able to specify how the external payment is made. They could simply add to the API a process that allows tracking the IAP up to the last step when the developer can point to the external payment processor.
Some developers may like this since they can gather additional data on the users that would otherwise be anonymous.
Posted on Sep 13, 2021 | 7:09 AM
Apple cannot specify how the external payment is made, that is now up to the courts as per this injunction.
Nor can Apple simply integrate any sort of API as you mention. An in-app API would not work. Jumping out of the app is no indication of upcoming payment, evening if tapping on a pay outside link. And if the dev simply alerts the user with a video in the app "hey you can always go to site xyz and pay!" and there is no link or immediate jump out then what? And so on.
And they cannot ask devs to add any sort of API on their own external sites, the court would likely strike that down pretty swiftly.
That’s the position Apple is in.
Posted on Sep 13, 2021 | 8:18 AM
But this all involves buying something that will be delivered via Apple’s app store.
It shouldn’t be difficult to set up a system that knows "50 downloads via IAP and 25 through an off-site purchase."
The hard part, I guess, would be knowing what the off-site purchase price was and calculating a percentage of that, but there are smart people working at Apple. The Judge says they are owed something, so I think anything that reasonably allows Apple to collect what they are owed without impeding the offsite sale would be allowed.
Posted on Sep 13, 2021 | 10:22 AM
It shouldn’t be difficult to set up a system that knows "50 downloads via IAP and 25 through an off-site purchase."
That alone seems an impossible task without demanding a) explicit consent, b) an invasive technology integration c) third-party validation and d) a high degree of payment centralisation, and e) limitations on crypto. None of those demands seem overly viable, or perhaps legal. An XX number is not something you could get close to with heuristics or anything of the like. Estimates from Similarweb, Semrush, AppAnnie and the like can be way, way off, and that is their bread and butter. You can’t charge money based on bad estimates, it all falls apart.
The hard part, I guess, would be knowing what the off-site purchase price was and calculating a percentage of that
Given that the easy part is more or less a non-starter the hard part is an non-diddly-on-starter.
The Judge says they are owed something, so I think anything that reasonably allows Apple to collect what they are owed without impeding the offsite sale would be allowed.
For certain Apple is owned something, but I don’t think there is any practical way to execute a % model. Even for Google, who are way ahead of Apple in analytics. It would have to be done off of number of downloads, or data, or something that Apple can track, and that would change the dynamic of the store greatly.
Posted on Sep 13, 2021 | 10:55 AM
That alone seems an impossible task without demanding a) explicit consent, b) an invasive technology integration c) third-party validation and d) a high degree of payment centralisation, and e) limitations on crypto.
Why do you think this? The Judge ruled Apple is owed a commission no matter where the sale comes from as a matter of law. Explicit consent is covered in the contract and lawful. No invasive technology is necessary. If they won’t self report Apple could just say "we’ll deduct 30% of what we would have collected from our IAP option."
Devs cannot legally refuse to pay a commission.
Again, all of this sucks and Apple tried to point that out. But that it sucks doesn’t mean Apple can’t demand it and maybe devs should have been careful what they wish for.
Posted on Sep 13, 2021 | 11:39 AM
It’s not uncommon that a company is allowed to do something that is just not practical. You can’t run a global per-transaction commission operation on the honor system. And you can’t guess at numbers, which is what you’re doing if you say "we’ll deduct 30% of what we would have collected from our IAP option". (What if your guess is double the truth, you just screwed your developer over and watch out.)
Posted on Sep 13, 2021 | 9:26 PM
Everything you say is true but I believe that Apple needs to just start allowing these links to other payment processors and let it go rather than start demanding fees on those transactions, requiring audits and all of that stuff. I would bet most will just continue using Apple’s IAP system and the overall revenue decline won’t be that significant. I truly believe there is a storm brewing for Apple at this point with how uncomfortable regulatory bodies around the world are with their margins, market share and business practices. Even the judge in this case seemed to have an unease with how little pricing pressure Apple feels unless threatened by legal or government action and even said that though Apple isn’t a monopoly today they are on the cusp of being one. They really need to pick and choose their battles in my opinion, giving an inch here might be perceived as giving a mile which could buy them regulatory equity they will need down the road. Just my armchair non-expert opinion.
Posted on Sep 12, 2021 | 6:16 PM
But she says Apple is still entitled to license that intellectual property for a fee of some sort, and requiring developers to use Apple’s payment system "accomplishes this goal in the easiest and most direct manner.
So what you’re saying is technically true, but it really seems unlikely; Apple was going to leave well enough alone and it’s hard to imagine at this point that Epic can win on the merits. If Apple were going to impose those sorts of fees and thought they could get away with it somehow, you’d think they’d already be taking Netflix in.
Posted on Sep 12, 2021 | 7:31 PM
I agree that Apple SHOULD just find a way to let devs link off-site and avoid a 30% commission.
I think they should set up new requirements for how a button can be displayed alongside their in-app option, take a smaller commission (say, 10%) of any offsite purchase for in app add-ons.
They should use this as an opportunity to defend against future litigation or antitrust enforcement.
Posted on Sep 12, 2021 | 8:33 PM
I’m of the opposite opinion. In the strictest since they just tested their contract’s legal enforceability and won. Not only is their current contract legal (aside from specifically requiring developers to use their payment system), but they now have the legal right to audit the accounting records of developers to ensure compliance with their contract. They simply don’t have any reason to change it, except what, avoiding future legal fees? It’s unlikely given this decision that any higher court is going to be able to get them for anti-trust, and the U.S. does not have a good history of winning those cases. This case cost Apple chump change compared to what giving up the 30% fee would, and now they have the legal basis to continue doing it.
Posted on Sep 12, 2021 | 8:40 PM
It’s less an issue of lawsuits and more of government introduced legislation. Apple looking more benevolent would help keep government bodies like the EU from coming down hard on Apple if they end up doing something developers cry about.
Posted on Sep 12, 2021 | 8:54 PM
Apple doesn’t need to worry about court rulings, but the bipartisan Open App Markets Act.
Posted on Sep 13, 2021 | 12:18 AM
This seems unsustainable in the long run. Apple might not be breaking any laws right now, but if they play their hand too strongly—auditing financials of large developers to take a cut—someone WILL pass a law that will make things much harder on them. Honestly, they may have already passed that point. Epic failed to win their case in court, but Apple’s performance in the courtroom has already been broadly accepted as pretty bad, and regulators won’t hesitate to make Apple’s life hard if there’s enough rumbling. ‘Big Tech’ is being painted with a fairly broad brush, so any regulation against any of those companies—even one that’s as relatively benign as Apple—will likely be popular.
It was time for Apple to make some easy concessions a few years ago, and they should think about some of them now (like making the 15% cut permanent for small devs with no application process) before they’re forced to do something that will ACTUALLY be bad for the company and the ecosystem, like 3rd party side-loading.
Posted on Sep 13, 2021 | 8:37 AM
Why should apple do that? None of their customers want the hassle & security concerns of a 3rd party payment solution
Posted on Sep 12, 2021 | 10:34 PM
1) Never say "none of" unless you can speak for all of.
2) I think it’s weird that you ask me a question that I answered in the the comment you’re responding to.
Posted on Sep 13, 2021 | 12:19 AM
Fair enough on your second point. But they’ve just had the antitrust judgement and its going to be very hard to have this decision overturned.
Personally I would like to see Apple reduce its cut, across the board, as this is the main complaint by developers – and a fair one. I haven’t heard any customers complaining. Im doubtful they’ll make a cut though
Posted on Sep 13, 2021 | 1:34 AM
Yeah not widely understood that the judgement was about as good for Apple as it was ever likely to get – they have to allow (if not overturned later) a few buttons that very few will actually use but the model remains intact.
Posted on Sep 13, 2021 | 6:59 AM
Within a few weeks, we will find out the grounds for appeal – they will need to file those soon. However, I think a good part of the battle here will be trying to keep the preliminary injunction in place. The appeal itself doesn’t do that in federal court, and in less than three months, Apple would once again be able to cut off the unreal engine. While this would also hurt Apple since a lot of games use UE, the ones that sell a lot (i.e., make money for Apple) are likely to be rewritten. On the other hand, losing the ability to use UE on Apple would devastate Epic and probably lead to an end to this lawsuit as well as deliver a message to others not to do this again.
Posted on Sep 12, 2021 | 3:36 PM
If I understand game development correctly, and I do know a lot about it, the engine itself that games are based on is not the problem. Games can continue to utilize Unreal Engine, however, it is the toolkit that is in question. Epic publishes developer tools for Unreal Engine that run on iOS, and are published from the Epic account. Utilizing the engine isn’t a problem, but not having those developer tools available for debugging and testing is a real issue. The engine itself is published as part of the game’s source code, and thus has an individual review from Apple in each app that is submitted from each developer account that uploads an app. It isn’t directly linked from Epic’s dev account and then somehow wrapped into the game externally, because that would violate Apple’s rules that all of the source code needs to be inside the app that is being reviewed.
Posted on Sep 12, 2021 | 5:23 PM
To develop for IOS you have to compile in IOS (I know it’s silly but they enforce this for everything, no exceptions thats why IOS doesn’t support most reflection features of .Net and I suspect this also happens for java) so to build a game in UE you will need the UE sdk running.
Posted on Sep 13, 2021 | 12:07 AM
Epic Games has filed an appeal to a Friday’s ruling in its lawsuit against Apple, calling on a higher court to reexamine the case and overturn the judge’s ruling
For all the Epic Won Big headlines we’ve read, why are they so mad?
Posted on Sep 12, 2021 | 3:37 PM
Because Epic didn’t win. This was never about other developers, and they’re pissed that the only things they actually wanted they’re not going to get.
Posted on Sep 12, 2021 | 3:52 PM
Epic ‘won’ because they successfully challenged one of Apple’s rules and got them replaced. They’re mad because they didn’t get the big prize- alternate app stores. Their goal wasn’t to help small developers, it’s to insert themselves into a 19 billion dollar business.
Posted on Sep 12, 2021 | 4:05 PM
The lost 9 out of 10, and is now losing the pr battle also as people realize their true intentions was never for the developers but their own greed.
Posted on Sep 12, 2021 | 4:26 PM
Correction – they lost 9 out of 10, and are now losing the PR battle, because gamers realize this isn’t about Fortnite, it’s about EGS. Their entire promo campaign was focused on Fortnite vs. Apple 1984 style, and now their true intentions are revealed. Gamers hate EGS. Some like it for the free games, but it has an uphill battle even getting people to install it. Epic would sacrifice Fortnite on a golden alter if it meant they could get a piece of the digital gaming pie.
Posted on Sep 12, 2021 | 5:41 PM
You are wrong, the few people that side with Epic never thought that they were doing out of their pure heart. They chose Epic side because they don’t like Apple’s business methods. Just like they hated MS when Baily Gates was running the show.
Posted on Sep 13, 2021 | 12:12 AM
Yes. Alternative App Stores are Epics real prize. But I still think Apple shouldn’t be compelled to allow it beyond web apps.
iOS, iPhone, iCloud and its App Store are all mostly proprietary. Apple shouldn’t be forced by government to operate like an open source platform. If Apple does so voluntarily, fine.
Posted on Sep 12, 2021 | 6:34 PM
This…isn’t going to go well for them. They should have taken what they got, spun it as a win, and walked away. Now, it is unlikely that they’ll even get the small win that they did. The court system only gets more conservative and change-averse the higher you go, and epic is getting some bad legal advice if they think this is a good move.
Posted on Sep 12, 2021 | 3:55 PM
Their endgame has always been Epic Games Store on iOS. They don’t care internally if Fortnite ever returns to iOS. It’s EGS that would make them a ton of money, and the money that is worth is worth every dime they would pay to get it. The problem is, it’s very unlikely they will ever get that. However, them appealing shows that they don’t really give a shit about Fortnite, and this was never about that. They are in the empire business, not the gaming business. Let them get EGS on everything, and they will turn into Valve, and stop making games, and start counting money.
Posted on Sep 12, 2021 | 5:37 PM
Pretty sure their endgame is actually precedence for putting their store on the Playstation. Apple is the target because its a smaller revenue hit and easier to make a case against.
Posted on Sep 12, 2021 | 6:59 PM
Well no reason not to throw Xbox in there too, or the Switch. You’re right that they want legal precedence, but as shown the court is quite conservative with meddling in the tech industry. It only gets more conservative the higher up you go.
Posted on Sep 12, 2021 | 7:36 PM
Actually, this piece of evidence may be the most damning thing in the entire trial, and certainly a contributing reason for the decision:
Based on the freemium model which relies upon in-app purchases, as well as these alternative ways of monetization, Fortnite is quite lucrative and integral to Epic Games’ overall business operations.86 Given that Fortnite utilizes cross-platform technology to capture a larger audience and appears on several different platforms, Epic Games faces commission rates on its in-app purchases. Generally, plaintiff must pay 30% across most platforms. Indeed, for example, Epic Games has agreed to such a rate on all Fortnite transactions via the Microsoft (Xbox) Store, the PlayStation Store, the Nintendo eShop, and Google Play.87 Epic Games has also agreed to extra payments for certain platform holders above and beyond the standard 30% commission rate. For example, for all Fortnite transactions via the PlayStation Store, Epic Games agreed to make additional payments to Sony above this commission rate based on the amount of time that PlayStation users play Fortnite cross-platform.
I don’t understand how they can establish legal precedent with all these other contracts in place.
Posted on Sep 12, 2021 | 7:50 PM
The media in general has been really reporting on this incorrectly. Even Epic says they lost. Here is the appeal. They say they have no intentions of returning Fortnite to the store until they can pass savings along to customers, because this ruling does not give them the ability to do that. However, that’s a little incorrect anyway, because it isn’t their choice to return Fortnite to the app store anymore, it’s now Apple’s.
Posted on Sep 12, 2021 | 5:35 PM
"it isn’t their choice to return Fortnite to the app store anymore, it’s now Apple’s."
Both Epic and Apple need to be willing to put Fortnite back in the Apple app store. Epic would need to submit a version that follows Apples rules, and Apple would need to approve the new version. Neither works without the other.
Posted on Sep 12, 2021 | 7:02 PM
Not exactly. Their developer account is still banned, and will remain banned until they either appeal or Apple decides on their own to re-enable it. Right now they couldn’t submit a new version of the app if they wanted to.
Posted on Sep 12, 2021 | 7:34 PM
Seriously, Verge, Kotaku, so many outlets crowing incorrectly on how this was any kind of win for Epic blows my mind.
Posted on Sep 12, 2021 | 10:33 PM
Alright folks, I have become tired on the media not reporting this, so I am officially posting it here for you. I analyzed the entire 180 page judgment to find this. You know, like journalists should be doing to properly report on a topic.
The only thing that people really care about in this trial is: will we be able to pay 30% less for in-app purchases now that other payment processors can be used? NO
In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple’s innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.
Apple has a pretextual contract with developers that commissions are owed to Apple on ALL in-app purchases, regardless of where they originate from. The court upholds that Apple may add to their contract to audit the accounting records of developers to ensure that there 30% commission is being paid regardless of where the transaction is completed. I hope that ends this debate, and will spark responsible reporting on the situation.
This is why Epic is appealing the decision – they are not allowed to pass savings on to customers when using a 3rd party payment processor, because the contract with Apple is LEGAL.
Source: https://s3.documentcloud.org/documents/21060631/apple-epic-judgement.pdf
Posted on Sep 12, 2021 | 8:19 PM
I guess, this could potentially allow Apple to go after companies like Facebook and request 30% of ad revenue driven by iOS users? As far as I know, they don’t pay anything substantial aside from the developer fees, so that’s a lot of money up for grabs.
Posted on Sep 13, 2021 | 4:27 AM
Why not go after Amazon for all those purchases iOS users make? If Apple even dares try, there will be a mass exodus of major companies who will stop making apps for iOS.
Posted on Sep 13, 2021 | 8:35 AM
Apple lost where it mattered most, their 30% racket. All the other stuff (monopoly, etc…) will be dealt with by governments.
Posted on Sep 13, 2021 | 8:02 AM
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