Judge 'inclined' to grant protection to Unreal Engine, not Fortnite

Posted:
in General Discussion edited August 2020
The judge presiding over Apple's legal fight with Epic Game said she isn't "inclined" to order Apple to reinstate Fortnite with new direct payment options intact, but may take action to allow Epic to maintain its Unreal Engine.

Credit: Epic Games
Credit: Epic Games


In a hearing over Zoom on Monday, U.S. District Judge Yvonne Gonzalez Rogers appeared unswayed by Epic's arguments that it was suffering "irreparable" harm from Apple's removal of Fortnite from the App Store.

"Your client created this situation," Judge Rogers told Katherine Forrest, Epic's lawyer. "In my view, you cannot have irreparable harm when you create the harm yourself."

At another point during the hearing, Judge Rogers said that Epic could remove its direct payment option and "return to the status quo" while all entities wait for a trial date in April.

In response, Forrest said that the move to implement the direct payment option was part of a broader strategy to "break the chokehold that Apple has on its payment system and the prohibition that it has on competition." Forrest added that the calculated move to force Apple's hand is protected by law, saying the company is unwilling to return to an anti-competitive contract.

Judge Rogers did appear inclined to grant a temporary restraining order to stop Apple from cutting off access to Unreal Engine, saying that its attack on that platform appeared like "an overreach." Forrest, for her part, said that developers were "fleeing" the engine because of what Apple may do.

Epic Games maintains Unreal Engine under a separate SARL entity called Epic Games International. Apple's counsel suggested that the SARL acts as a shell corporation, with Epic able to shift blame wherever and whenever it pleases. Epic's lawyers maintain that Epic Games International is a separate entity that Apple is going after because of the move Epic's primary account made with Fortnite.

Arguing on whether Apple was monopolistic, Epic's lawyers likened Apple's in-app purchase strategy to Expedia taking 30% of both the hotel rate and room service charges.

Fortnite events following the App Store removal

The ruling is the latest in a string of events triggered by Epic Games updating the Fortnite app in the App Store on August 13 to include direct payments for virtual currency to Epic itself, bypassing the App Store's payment mechanism entirely. As this is forbidden in the App Store guidelines, Apple quickly pulled the app from being available to download within hours of the update's appearance.

Later the same day, Epic filed a lawsuit against Apple, requesting an injunction preventing Apple from performing retaliatory moves, such as pulling the app from the App Store, and to allow Epic to work unimpeded by the iPhone maker. The complaint itself accused Apple of being a "technology monopolist," and largely argued against the guidelines and the exorbitant" 30% commission fee for in-app purchases.

Simultaneously, Epic launched a campaign to gain support from the public, including releasing a parody ad of Apple's famous "1984" Super Bowl commercial. Later, Epic announced an in-game tournament that provided merchandise featuring "Free Fortnite" branding and prizes including other platforms that Fortnite could be played on instead of iOS and macOS hardware.

By August 17, it was revealed by Epic that Apple had threatened to terminate all of Epic's developer accounts relating to iOS and macOS, which resulted in Epic requesting a temporary restraining order against Apple to halt the process.

Apple's filing to the court included a chain of emails between Epic and Apple executives, which seemingly confirmed the lawsuit and anti-Apple marketing campaign were prepared in advance of the app's takedown, and that the update itself was an attempt to force Apple's hand on the issue of the 30% transaction fee.

The emails also showed Epic asked Apple to give it permission to open up its own Epic Games Store on iOS, complete with its own separate payment mechanism that didn't provide Apple with its 30% cut. The store, which Apple opposes for many reasons including device security and revenue levels, was previously discussed by Epic CEO Tim Sweeney, including a suggestion in June that its own iOS app store could arrive within months.

Comments

  • Reply 1 of 15
    sflocalsflocal Posts: 5,737member

    Arguing on whether Apple was monopolistic, Epic's lawyers likened Apple's in-app purchase strategy to Expedia taking 30% of both the hotel rate and room service charges.
    Epic is hoping that the courts are too stupid to walk beyond all the smoke it's blowing out from its backside.  In the above "argument", if Expedia built and owns all the physical hotels it's advertising the prices for, then sure... Expedia has the absolute right to demand a cut of the money it makes from Epic's sales of liquor from the mini-bars in Expedia's hotel rooms.

    Epic (and the trolls) is demanding entry to Apple's own home, and squat in it while Apple pays for everything.  Freeloaders.


    edited August 2020 larryjwrob53ronnpujones1pscooter63killroygeorgie01ericthehalfbeemdriftmeyerwilliamlondon
  • Reply 2 of 15
    The judge looks like she is giving Epic one last chance to revert Fortnite back to its approved version and come up with a better argument, and live to fight another day, or have her rule that Epic screwed themselves. 

    SpamSandwichkillroyFileMakerFellerwatto_cobra
  • Reply 3 of 15
    This sounds like Epic has a separate developer account for their Unreal Engine team which is marketed under a separate entity and Apple has threated to close both accounts, despite only one violating the App Store rules. So maybe they have a case after all?
  • Reply 4 of 15
    Pascalxx said:
    This sounds like Epic has a separate developer account for their Unreal Engine team which is marketed under a separate entity and Apple has threated to close both accounts, despite only one violating the App Store rules. So maybe they have a case after all?

    They would indeed, if Epic Games International was a genuine, independent third-party. I don't think that EGI is independent of Epic's control, though.

    Epic's lawyers likened Apple's in-app purchase strategy to Expedia taking 30% of both the hotel rate and room service charges.

    Two problems with this argument - firstly, room service is wholly done by the hotel, Expedia does nothing to help room service, but IAPs are done by Apple, so Apple are providing a service. But more importantly, Expedia has competitors just like Apple does. Expedia would be perfectly within their rights to start charging 30% of room service charges, and if the hoteliers don't like that, they are free to stop using Expedia, and continue using Expedia's competitors (if they want).
    fastasleepkillroyBeatsaderutterretrogustojony0FileMakerFellerwatto_cobra
  • Reply 5 of 15
    sdw2001sdw2001 Posts: 17,673member
    I’m not versed in all the details of this, but this comment sounds reasonable on the surface.
    watto_cobra
  • Reply 6 of 15
    SpamSandwichSpamSandwich Posts: 33,408member
    Pascalxx said:
    This sounds like Epic has a separate developer account for their Unreal Engine team which is marketed under a separate entity and Apple has threated to close both accounts, despite only one violating the App Store rules. So maybe they have a case after all?
    If so, then “Unreal Engine” should’ve had a separate developer’s account.
    killroytmaywatto_cobra
  • Reply 7 of 15
    jungmarkjungmark Posts: 6,870member
    Self inflicted pain by Epic. No emergency ruling should be made. Let Epic seep In the stew of their making. 
    Beatswilliamlondonjony0watto_cobra
  • Reply 8 of 15
    BeatsBeats Posts: 2,531member
    Judge Koh got cancelled? Good.
    mwhitejony0watto_cobra
  • Reply 9 of 15
    cjlaczcjlacz Posts: 40member
    Pascalxx said:
    This sounds like Epic has a separate developer account for their Unreal Engine team which is marketed under a separate entity and Apple has threated to close both accounts, despite only one violating the App Store rules. So maybe they have a case after all?
    What I remember reading in the past is that the tax id (?) and emails on the accounts are identical. If your corporate identifiers are the same, then the accounts are under the same company. If SARL is really a different company not under epic shouldn't it have a different tax id? Personally, I think I agree with Apple pulling all the accounts with the same IDs. I'm not sure I'm against the judge ordering restoration of the SARL account, which is what it sounds like. It basically only means they get official access back to the dev tools and the normal App Store support tools I think. They'd probably get in trouble again if they tried to move Fortnite to the SARL account. 
    razorpitwatto_cobra
  • Reply 10 of 15
    I don't get it. If Epic Games International is a separate entity with a separate developer account, then how will revoking the developer account for Epic affect Epic Games  International?

    If Apple sent the warning of revoking the developer licence for Epic Games International, then why is Epic the one fighting it and not Epic Games International? By fighting for Epic Games International, Epic is just confirming the fact that EGI is a shell company.
    GabyrazorpitaderutterretrogustoPascalxxSpamSandwichFileMakerFellerwatto_cobra
  • Reply 11 of 15
    Rayz2016Rayz2016 Posts: 6,957member
    I don't get it. If Epic Games International is a separate entity with a separate developer account, then how will revoking the developer account for Epic affect Epic Games  International?

    If Apple sent the warning of revoking the developer licence for Epic Games International, then why is Epic the one fighting it and not Epic Games International? By fighting for Epic Games International, Epic is just confirming the fact that EGI is a shell company.
    Mmmm. I hadn’t thought of that. But Applecsaid they’d cancelled the developer account for their breaches, but didn’t say what they were. 
    watto_cobra
  • Reply 12 of 15
    GabyGaby Posts: 176member
    “Epic's lawyers likened Apple's in-app purchase strategy to Expedia taking 30% of both the hotel rate and room service charges.”

    I would think a more appropriate analogy would be something akin to..  An exclusive Island resort offering various therapies and luxury treatments to their affluent clientele; subcontracted to Self employed beauticians and therapists who thus pay a commission to said resort for access to the facilities and also the extremely lucrative clients with lots of disposable income...

    I mean almost every hair salon on earth also works on the same model. The hairdressers have everything provided except for the scissors and for that they pay a Damned site more than 30% in many cases.... on a per client basis. 

    There’s a litany of examples that could be cited that just render this weak argument moot. 
    edited August 2020 razorpitwatto_cobra
  • Reply 13 of 15
    This is nuts. This company wants to screw Apple out of its fee. If a company want to market its product, it take time and money to do so. In general it takes about 30% to move a product to market. In Apple part they have spent billions to create the IOS platform, billions to create the App Store, and billions to create the software necessary for the developer to make it work, plus maintenance to keep it safe and make it work.. The developer get 70% of the proceeds! But, no, they want the other 30%. If they don’t like the system they can go elsewhere! Apple is right to pull their product! 
    aderutterjony0watto_cobraDetnator
  • Reply 14 of 15
    fastasleepfastasleep Posts: 5,691member
    Rayz2016 said:
    I don't get it. If Epic Games International is a separate entity with a separate developer account, then how will revoking the developer account for Epic affect Epic Games  International?

    If Apple sent the warning of revoking the developer licence for Epic Games International, then why is Epic the one fighting it and not Epic Games International? By fighting for Epic Games International, Epic is just confirming the fact that EGI is a shell company.
    Mmmm. I hadn’t thought of that. But Applecsaid they’d cancelled the developer account for their breaches, but didn’t say what they were. 
    They didn't cancel it, they threatened to. Neither Epic Games or EGI's accounts have been canceled yet.

    Apple said they routinely disable linked developer accounts that have broken the rules.
    watto_cobra
  • Reply 15 of 15
    Another way to look at this. I have made a new speaker system. So I go into Best Buy and clear out a 10 ft by  10 ft area, set up my advertising promotional material and a demo unit. I pay Best Buy nothing! The manager comes over an says...you must pay for this space! I pay the rent for the building, I pay for the air conditioning and heat, I pay for the janitorial service, and you are pitching my customers as they come into my store.  The manager says you must leave. I say like hell I am going to pay and I am not going to leave. Furthermore, I am going to sue you because you are a monopoly! Thus is just wrong!!!!!
    watto_cobraDetnator
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