Epic Games NOT a Modern Corporate Robin Hood, Says Apple

This week, a new revelation came to light in the ongoing battle between Apple and Epic Games. Responding to Epic Games’ preliminary injunction to reinstate Fortnite on the App Store, Apple has filed a countersuit against Epic Games over contract breach. Where is this legal battle headed? 

The gaming industry is populated with action-packed, addictive online video games like Minecraft, Grand Theft Auto, Call of Duty, and League of Legends. But one video game managed to gauge the interest of professional athletes, celebrities, TV shows, and the younger generation and made a remarkable impression. And that was Fortnite. 

Developed by Epic Games, Fortnite was launched in July 2017. Within its first 30 days, Fortnite earnedOpens a new window more than $25 million on mobile. And this was when the app was available only on the iOS platform. In fact, within the first two weeks of April 2018, the Fortnite mobile version generated $1 million in revenue every day, surpassing Netflix, Tinder, Pandora, and YouTube.

More recently, in May 2020, Epic Games announcedOpens a new window that Fortnite has over 350 million registered players and is estimatedOpens a new window to earn $1.5 million per day from the iOS platform. Fortnite’s meteoric popularity and lofty earnings were possible due to its availability in the digital marketplace, such as the App Store and Google Play.

All was well until Epic Games decided to set up its own direct-to-consumer gambit in August 2020. It introduced a new payment system that circumvented Apple’s App Store guidelines and prompted Apple to take action for being in breach of iTunes store rules. In response, Apple blocked Fortnite from its platform. Epic Games retorted with a lawsuit against Apple for being anti-competitive and monopolistic. On August 28, 2020, a temporary restraining order allowed Apple to terminate the Epic Games developer account from the App Store. 

The escalating legal conflict between Apple and Epic Games intensified to a whole new level this week when Apple filed a countersuit against Epic Games for allegedly breaching its contractual obligations to its App Store. The iPhone maker is seeking monetary damages against Epic Games. Apple’s new countersuit comes after Epic Games’ motionOpens a new window for a preliminary injunction, which the company filed on September 4, 2020.

Read More: Fortnite’s Battle Royale With Apple and Google Heats Up

Recent Developments in the Apple-Fortnite Battle

On September 8, 2020, Apple countersued Epic for breach of contract and violation of California’s Unfair Competition Law, prohibiting false advertising. Furthermore, Apple requested the court to award punitive damages. In a 67-page court filing, Apple denied that its App Store guidelines violated the antitrust law and dismissed Epic as the modern corporate Robin Hood.

“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,” wroteOpens a new window Apple in the court filing.

Apple further said, “Apple is not a monopolist of any relevant market. Competition both inside and outside the App Store is fierce at every level: for devices, platforms, and individual apps. There is nothing anti-competitive about charging a commission for others to use one’s service. Many platforms—including Epic’s own app marketplace and Unreal Engine—do just that. In Apple’s case, that commission is not charged—and Apple earns nothing from its substantial investment in the App Store—unless and until developers bill and collect funds from users who engage in digital transactions.”

Read More: Fortnite Vs. Apple: The Saga Continues

What’s Next? 

Locked in an escalating dispute, Apple and Epic Games might continue charging each other with lawsuits and countersuits until the next court hearing on September 28, 2020. However, the legal battle has raised a burning question. Is Apple’s stringent control over its App Store an act of monopoly? 

If Epic Games wins this fight and Apple is accused of anti-competitive practices, then Epic Games might initiate a new era of fair competition in the tech industry. However, if Apple wins, then Epic Games will not only have to end its journey with the company but also have to pay millions for the damages it has caused Apple. 

It will be interesting to see how the story develops from here and what implications it has for the app and video game markets, especially for runaway success like Fortnite, that could not have gotten where it did without diving off the large app marketplaces that iTunes or Google Play enabled. 

Can Epic Games win the battle against Apple? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!