Apple fires back in Epic Games 'Fortnite' saga, seeks damages for breach of contract

Posted:
in General Discussion edited September 2020
Apple filed counterclaims and responses on Tuesday in its legal battle with Epic Games, and is seeking damages for the "Fortnite" maker's alleged breach of contract.

Credit: Apple
Credit: Apple


The latest legal volley, filed Tuesday in the U.S. District Court for the Northern District of California, continues an ongoing saga between the two companies that began in August. On Aug. 13, Epic Games baited Apple into removing "Fortnite" from the App Store and filed a prepared lawsuit shortly thereafter.

In its court filing Tuesday, Apple said that the Epic lawsuit is "nothing more than a basic disagreement over money." The Epic Games suit alleges anti-competitive behavior on the App Store and protests Apple's cut of in-app purchases.

"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," Apple wrote in the counterclaim.

Furthermore, Apple believes that it should be awarded compensatory and other damages as a result of the entire debacle.

"Epic fired the first shot in this dispute, and its willful, brazen, and unlawful conduct cannot be left unchecked. Neither Mr. Sweeney's self-righteous (and self-interested) demands nor the scale of Epic's business can justify Epic's deliberate contractual breaches, its tortious conduct, or its unfair business practices," Apple wrote. "This Court should hold Epic to its contractual promises, award Apple compensatory and punitive damages, and enjoin Epic from engaging in further unfair business practices."

Apple's dustup with Epic started when the game company implemented a direct payment system into "Fortnite" that bypassed the 30% commission on App Store and in-app purchases. Apple then pulled "Fortnite" from the App Store as it was directly violating the company's developer guidelines -- a move that Epic was apparently anticipating.

Unbeknownst to Apple, Epic had been busy enlisting a legion of lawyers, publicists, and technicians to orchestrate a sneak assault on the App Store," Apple said of the implementation of the direct payment system.

The move appeared to be a strategic on Epic's part, as the company quickly launched an anti-Apple campaign along the lawsuit. Although Epic Games has denied wanting a special deal for "Fortnite," email correspondence between Apple and Epic Games executives suggest otherwise.

In the counterclaim, Apple adds that Epic Games has earned more than $600 million from the App Store. It also asks the court to hold Epic liable for breach of contract and other counts. It also seeks restitution of the revenue that "Fortnite" made through its direct payment system and a permanent injunction banning that payment system across all of Epic's apps on the App Store.

Epic Versus Apple - Apple's Counterclaim by Mike Wuerthele on Scribd

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Comments

  • Reply 1 of 88
    sflocalsflocal Posts: 6,088member
    If Epic wins, it will turn Apple's App Store into the wild-west, malware-ridden infestation that is Android.  I can't believe that anyone, including the government can force any company to open their all-in-one product to allow other companies free reign.  

    This is not anything remotely similar to what Microsoft did with Windows.  Microsoft owned the software, but not the hardware that vendors were loading the OS onto.  Microsoft was forcing PC makers to submit to its will.  The iPhone is owned and made by Apple, for Apple.  It's a toaster.  Critics can say whatever they will to suit their narrative, but when it comes down to it, this is Apple's exclusive product and it can do whatever it wants with it.

    I'm embarrassed to be a developer, with these crybabies feeling entitled to barge into someone else's house and give orders.
    bshanktmaygeorgie01DAalsethBeatsdchenderpichaeltobybeagleflyingdplolliver
  • Reply 2 of 88
    Good! Epic is a hypocrite and everything Apple said in the latest filing represents them 100%. Give it to them with both barrels, Apple!
    pulseimagesbshankdchenderpichaelflyingdplolliverchasmDogpersonretrogustostevenoz
  • Reply 3 of 88
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    pulseimagespichael
  • Reply 4 of 88
    carnegiecarnegie Posts: 1,077member
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    The court may order it to, but as of now it has not so ordered Apple.

    Apple has informed Epic that it will deny a reapplication (by Epic) for at least a year. So at this point, Epic doesn't have the option to just undo the hotfix and make Fortnite compliant.
    edited September 2020 pulseimagesbshankpichaellolliverpscooter63roundaboutnowDogpersonurahararandominternetpersonwatto_cobra
  • Reply 5 of 88
    thrangthrang Posts: 1,002member
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    If Epic adhere's to all the stipulations, I'm sure Apple would being them back in - Apple might be viewed negatively if the denied access to them.

    Having said that, there may be aspects to the developer agreements that also stipulate that certain actions may lead to a permanent barring. 

    I don't play games, but Epic is big an popular so it makes sense to have them back in the fold once their tale is tucked deeply between their legs.

    The stupidity of Epic's action/claim is boggling to me...
    pulseimagesbshankBeatsflyingdpMisterKitwatto_cobraDetnator
  • Reply 6 of 88
    Yes, the party is over, and somebody has to pay the bill.  
    Mr. Sweeney, you may guess now, who needs to open wide his wallet and pay for his stupidity.  Next time you should think twice before you start telling lies.
    pulseimagesbshankBeatslolliverstevenozwatto_cobraDetnator
  • Reply 7 of 88
    Not only breach of contract, but numerous counts of defamation. Apple should seek billions in damages.
    pulseimagesbshankrob53lkruppBeatstobybeaglelolliverpscooter63MisterKitwatto_cobra
  • Reply 8 of 88
    carnegie said:
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    The court may order it to, but as of now it has not so ordered Apple.

    Apple has informed Epic that it will deny a reapplication (by Epic) for at least a year. So at this point, Epic doesn't have the option to just undo the hotfix and make Fortnite compliant.
    The court was considering, but rejected, the idea of putting fortnite back on the store with the alternate payment system. It was not considering forcing the product back on the store if the alternate payment system was removed. I was talking about a different scenario entirely. Your second paragraph is a completely new news item to me. I find your point fascinating. I’m going to see if I can confirm that.

    My question remains: can Apple stop a third-party software developer from using the App Store if it simply doesn’t like the developer? Similarly, could Walmart refuse to sell Samsung products just because they don’t like Samsung?
    edited September 2020 watto_cobra
  • Reply 9 of 88

    thrang said:
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    If Epic adhere's to all the stipulations, I'm sure Apple would being them back in - Apple might be viewed negatively if the denied access to them.

    Having said that, there may be aspects to the developer agreements that also stipulate that certain actions may lead to a permanent barring. 

    I don't play games, but Epic is big an popular so it makes sense to have them back in the fold once their tale is tucked deeply between their legs.

    The stupidity of Epic's action/claim is boggling to me...
    I agree that Apple is likely to let them back in, but my question is a legal question about whether they would be forced to let them back in.
    watto_cobra
  • Reply 10 of 88
    Holy crap!  I didn't think Apple would take their gloves off already now. But I'm all for it.  Give'm h3ll, Apple!!!
     :* 

    #KickSweeney_FreeFortnite
    BeatsanantksundaramDogpersonwatto_cobraDetnator
  • Reply 11 of 88
    It's going to be hard for Epic to fight that one, considering that one day after Apple kicked back the app for breach of contract Epic reacted with a fully formed lawsuit AND a video. It's obvious that they intentionally breached the contract with the intent of using Apple's rejection as grounds for a lawsuit.
    Beatsradarthekatlolliverretrogustostevenozwatto_cobraDetnator
  • Reply 12 of 88
    DAalsethDAalseth Posts: 2,783member
    carnegie said:
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    The court may order it to, but as of now it has not so ordered Apple.

    Apple has informed Epic that it will deny a reapplication (by Epic) for at least a year. So at this point, Epic doesn't have the option to just undo the hotfix and make Fortnite compliant.
    The court was considering, but rejected, the idea of putting fortnite back on the store with the alternate payment system. It was not considering forcing the product back on the store if the alternate payment system was removed. I was talking about a different scenario entirely. Your second paragraph is a completely new news item to me. I find your point fascinating. I’m going to see if I can confirm that.

    My question remains: can Apple stop a third-party software developer from using the App Store if it simply doesn’t like the developer? Similarly, could Walmart refuse to sell Samsung products just because they don’t like Samsung?
    That's a darn good question. Could Walmart just chose to not carry Samsung TVs? Could Target just chose not to carry Levi Jeans? I want to say yes, it's a private store and in the end they should be able to say what they do or don't want to carry, and they don't have to give a reason.

    Using Epic's logic should Proctor and Gamble demand Costco carry their many products but NOT take a cut because you could pick up a package of TidePods and pay over the air with your phone to P&Gs online store and skip the line? I'd say the premise is absurd. This gets back to Epic's core argument that the AppStore is a monopoly and the government should force Apple to carry anyone's product for free. It's an argument that I didn't agree with when first advanced and the more this unfolds, the more vacuous it seems.
    edited September 2020 Beatsflyingdppscooter63applguyMisterKitwatto_cobraDetnator
  • Reply 13 of 88
    blastdoorblastdoor Posts: 3,217member
    sflocal said:
    If Epic wins, it will turn Apple's App Store into the wild-west, malware-ridden infestation that is Android.  I can't believe that anyone, including the government can force any company to open their all-in-one product to allow other companies free reign.  

    This is not anything remotely similar to what Microsoft did with Windows.  Microsoft owned the software, but not the hardware that vendors were loading the OS onto.  Microsoft was forcing PC makers to submit to its will.  The iPhone is owned and made by Apple, for Apple.  It's a toaster.  Critics can say whatever they will to suit their narrative, but when it comes down to it, this is Apple's exclusive product and it can do whatever it wants with it.

    I'm embarrassed to be a developer, with these crybabies feeling entitled to barge into someone else's house and give orders.
    I wonder if the consequences of an Epic win are even more far reaching, perhaps including invalidating the console business model. How can Sony, Microsoft, or Nintendo charge developers for access to their hardware platforms if Epic wins this suit? 

    I'm definitely not a lawyer, and I've seen over and over that my attempts to understand law based on what I imagine is "common sense" tend to fail spectacularly, so maybe I'm totally wrong here. But it sure seems to me that Epic is fighting the wrong battle here. I think they need the law to change in order to get what they want, because I don't see how they win this under current law (but again -- I ain't no lawyer). 
    Beatswatto_cobra
  • Reply 14 of 88
    carnegiecarnegie Posts: 1,077member
    carnegie said:
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    The court may order it to, but as of now it has not so ordered Apple.

    Apple has informed Epic that it will deny a reapplication (by Epic) for at least a year. So at this point, Epic doesn't have the option to just undo the hotfix and make Fortnite compliant.
    The court was considering, but rejected, the idea of putting fortnite back on the store with the alternate payment system. It was not considering forcing the product back on the store if the alternate payment system was removed. I was talking about a different scenario entirely. Your second paragraph is a completely new news item to me. I find your point fascinating. I’m going to see if I can confirm that.

    My question remains: can Apple stop a third-party software developer from using the App Store if it simply doesn’t like the developer? Similarly, could Walmart refuse to sell Samsung products just because they don’t like Samsung?
    In the earlier TRO hearing, the court didn't need to consider whether Apple had to allow Fortnite back on the App Store if Epic made the app compliant. Epic didn't ask the court to order that because that wasn't, at that time, an issue. And it was clear that Apple would allow Fortnite back on the App Store if Epic made it compliant. That was before Apple terminated the ('84) developer account.

    In this recent motion for perlimanry injunction, one of the things Epic is asking the court to order Apple do is to effectively reinstate Epic's ('84) developer account. That is a separate ask from ordering Apple to allow Fortnite back on the App Store even while it isn't complaint. The court could, but hasn't yet, order Apple to reinstate that account even if the court doesn't order Apple to allow Fortnite back with the alternate payment method. So Apple could effectively be ordered to allow Fortnite back on the App Store if it is made compliant.

    As indicated, the court could order Apple to do what you asked about. But it hasn't yet done so. So Apple isn't required to do that.

    As for your more general question: It might depend on the circumstances, but generally speaking yes. Apple could do what it wanted unless and until a court told it that it couldn't.
    watto_cobraDetnator
  • Reply 15 of 88
    I remember a mac world where Nvidia jumped the gun about there great graphic cards that would be the next mac. It ended with Nvidia no longer showing up in a mac officially. Apple has a we will never forget attitude. Apple almost never licenses software from a company that took them to court. It’s often petty on apples part they should be bigger than that but they seldom are. Epic killed it’s golden goose. They might as well move on. 
    ashleyflyingdpwatto_cobra
  • Reply 16 of 88
    DAalseth said:
    carnegie said:
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    The court may order it to, but as of now it has not so ordered Apple.

    Apple has informed Epic that it will deny a reapplication (by Epic) for at least a year. So at this point, Epic doesn't have the option to just undo the hotfix and make Fortnite compliant.
    The court was considering, but rejected, the idea of putting fortnite back on the store with the alternate payment system. It was not considering forcing the product back on the store if the alternate payment system was removed. I was talking about a different scenario entirely. Your second paragraph is a completely new news item to me. I find your point fascinating. I’m going to see if I can confirm that.

    My question remains: can Apple stop a third-party software developer from using the App Store if it simply doesn’t like the developer? Similarly, could Walmart refuse to sell Samsung products just because they don’t like Samsung?
    That's a darn good question. Could Walmart just chose to not carry Samsung TVs? Could Target just chose not to carry Levi Jeans? I want to say yes, it's a private store and in the end they should be able to say what they do or don't want to carry, and they don't have to give a reason.

    Using Epic's logic should Proctor and Gamble demand Costco carry their many products but NOT take a cut because you could pick up a package of TidePods and pay over the air with your phone to P&Gs online store and skip the line? I'd say the premise is absurd. This gets back to Epic's core argument that the AppStore is a monopoly and the government should force Apple to carry anyone's product for free. It's an argument that I didn't agree with when first advanced and the more this unfolds, the more vacuous it seems.
    Thanks. I was making a point, and I guess I made it successfully. My question was both rhetorical and legal. But some people here missed my point and instead responded "Why would Apple ever do that?" Indeed, I would even go so far as to say I was implying that Apple *should* hold a grudge against Epic and refuse to let either Epic's software or apps that use Epic's SDK on the App Store. Even if Apple prefers to forgive and forget, my point is that Apple is permitted to say "buh bye."

    If a company had an employee that was bad-mouthing them on social media, the company would certainly be allowed to fire that employee. This sort of thing happens all the time. Freedom of speech in the US applies only to US state and federal governments restricting the free speech of others. Keeping critics like Epic off Apple's store would be akin to firing them, and perfectly legal. And, on a scale of 1 to 10, I would rate Epic's egregiousness at around 5. This isn't a 10 out of 10 on the evil scale. What Epic did was no secret and it wasn't theft, so I'm only calling it a 5, and barely that. But you can fire someone for anything above a 0.

    The CEO of Facebook has been criticizing Apple lately. In my books, Apple should be allowed to ban Facebook's apps for that reason. I remember Jobs once saying, "That's not our style." I think that's very noble and magnanimous of Apple to let critics generally stay on their app store. Apple's reputation is golden as far as I'm concerned here. Actually, the fact that Apple is launching a counter suit against Epic proves that even their magnanimity has its limits.

    Apple doesn't hold grudges, and I'm glad you don't, because I think I disagreed with you a few days ago on something. You should be allowed to ignore me or fire me because we disagreed, but you are being magnanimous, like Apple tends to be.
    DAalsethwatto_cobra
  • Reply 17 of 88
    carnegie said:
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    The court may order it to, but as of now it has not so ordered Apple.

    Apple has informed Epic that it will deny a reapplication (by Epic) for at least a year. So at this point, Epic doesn't have the option to just undo the hotfix and make Fortnite compliant.
    The court was considering, but rejected, the idea of putting fortnite back on the store with the alternate payment system. It was not considering forcing the product back on the store if the alternate payment system was removed. I was talking about a different scenario entirely. Your second paragraph is a completely new news item to me. I find your point fascinating. I’m going to see if I can confirm that.

    My question remains: can Apple stop a third-party software developer from using the App Store if it simply doesn’t like the developer? Similarly, could Walmart refuse to sell Samsung products just because they don’t like Samsung?
    Well, depends on what you mean by "like". Walmart refuses to carry all sorts of products if the vendor doesn't or can't meet Walmart's requirements. 
    pscooter63watto_cobra
  • Reply 18 of 88
    Every comment here seems to miss the point.

    The App Store is NOT just another business, Even Walmart and Costco have far more competitors than does the App Store.  The app store is the ONLY choice for people with iPhones. The only quasi alternative here would be an Android App Store.  Are those very similar choices ?  Practically every Apple lover here would argue “no, the Apple experience is far superior”.  This is much different than being able to buy the very same identical TV at a large number of different retailers, as some have suggested.

    The ultimate goal of capitalism is to become so successful, as to destroy the free market by eliminating and preventing all competition. Let that sink in because most people can’t grasp that at first,  Once again, the end goal of capitalism is to destroy free markets, and create an all powerful, monopoly or all powerful, duopoly. That destroys consumer choice, which is the very goal of a free market, People often assume capitalism and free markets go hand in hand, and generally they do.... until a business grows so big that it is no longer subject to competition because it can or has effectively destroyed it,

    That’s the very point of anti-trust law.  To prevent the destruction of free markets,

    There is a price to be paid for total success and rightly so. Once a company becomes so successful that it has essentially destroyed competition, the checks and balances of a free market are destroyed. Either the company is forcibly broken up in a way that restores a level of free market control or it becomes subject to regulations as a substitute for the loss of free market checks and balances.

    is the App Store a monopoly or even just a duopoly? The argument for the latter is strong, and for the latter is almost certain,

    The real question here is do you support free markets, defined as markets that encourage healthy competition for the benefit of consumers ?  If so, you can’t argue that Apple should be allowed to do whatever it wants, because Apple created the App Store. As you cheer on Apple becoming a 2 trillion dollar company, remember that you are also cheering the end of a truly functional free market for mobile apps.

    The United States has become a poster child for massive inequality in developed countries and is getting worse.  That “American Dream” that is all but gone, was strong after world war 2.  The reason the American dream was reborn was the Sherman Act.... powerful anti trust law that broke up large corporate Robber Barons, like Rockefeller.  Forcing the breakup of too large and powerful corporations after world war 2 is what brought back the American dream and decades of shared prosperity.

    So the larger question here is do you want to worship the control of monopolistic corporations that have grown to destroy free markets, or do you want to see the American dream restored, where the free market ensures maximum productivity and a fair chance for everyone to share in that prosperity ?








    Oferdarkvaderapplguy
  • Reply 19 of 88
    carnegie said:
    Is Apple required to let Epic back on the store even if Epic relents and wants to pay 30%?
    The court may order it to, but as of now it has not so ordered Apple.

    Apple has informed Epic that it will deny a reapplication (by Epic) for at least a year. So at this point, Epic doesn't have the option to just undo the hotfix and make Fortnite compliant.
    The court was considering, but rejected, the idea of putting fortnite back on the store with the alternate payment system. It was not considering forcing the product back on the store if the alternate payment system was removed. I was talking about a different scenario entirely. Your second paragraph is a completely new news item to me. I find your point fascinating. I’m going to see if I can confirm that.

    My question remains: can Apple stop a third-party software developer from using the App Store if it simply doesn’t like the developer? Similarly, could Walmart refuse to sell Samsung products just because they don’t like Samsung?
    Well, depends on what you mean by "like". Walmart refuses to carry all sorts of products if the vendor doesn't or can't meet Walmart's requirements.

    Walmart does not have to carry Samsung Products at All. As a matter of fact they chose not to carry iPhones until they just couldn’t avoid it anymore without missing sales opportunities. 

    lolliverpscooter63randominternetperson
  • Reply 20 of 88
    sflocalsflocal Posts: 6,088member
    dpkroh said:
    Every comment here seems to miss the point.

    *yawn*


    No... you missed the point, or you're changing the narrative to suit your agenda.

    Having a monopoly is not illegal.  An iPhone is both an OS and hardware.  Both go together.  No one else but Apple can make an iPhone.  No one else but Apple can make iOS.  It's a packaged deal.  Clowns like Epic are just vendors, knocking on Apple's door, hat in hand asking to be let into Apple's house hoping to sell its wares.  Nothing more.

    Epic was invited into Apple's house on good terms.  Then, Epic saw how much money they were making (because Android, Xbox, PlayStation, etc.. pays crap) and decided to break an agreement and pocket all the money made in Apple's house.  

    What part of this eludes you?
    chasmviclauyyccornchipDAalsethGilliam_Batesuraharatobybeaglepscooter63watto_cobraDetnator
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