Judge suggests Apple vs Epic should go to jury, trial expected in July 2021

Posted:
in iOS edited September 2020
During Monday's hearing for Epic and Apple's legal battle over the App Store and "Fortnite," the judge suggested that the public's opinion is important, with the matter otherwise penciled-in for a July bench trial.




Towards the end of a virtual hearing on Monday morning at the US District Court for the Northern District of California, Judge Yvonne Gonzalez Rogers told the legal teams of Epic and Apple that it would be worth considering having the trial with a jury to weigh in on the "Fortnite" saga"Fortnite" saga.

While a trial such as this could be handled by a judge or a group of judges, Rogers proposes it may be suitable for regular people to weigh in on the matter as a jury.

"They are important cases on the frontier of anti-trust law," said Rogers, pointing out how major the case could be. However, Rogers also suggests the opinions of a federal judge may not necessarily be as useful as the public, especially in such important matters.

"It is important enough to understand what real people think," the Judge added. "Do these security issues concern people, or not?"

Early indications indicate that Epic may not want to use a jury, with lawyers pushing for a bench trial instead. Legal teams have until Tuesday to declare whether a trial by jury is demanded.

As for the rest of the schedule, there's a deadline of January 6 for the filing of data for the trial, while the trial itself will be sometime in July.

The hearing also gave a preview of what the potential trial between Epic and Apple could look like. Based on discussions in the hearing, it seems that it won't be an easy ride for Epic.

The conversation in the two-hour hearing largely concerned arguments raised in earlier filings by both sides, including reports from experts. However on key points, Epic was seemingly admonished by Rogers.

The judge repeatedly highlighted that the matter was of Epic's own doing, at times when Epic's lawyers urged there was harm. Epic forced Apple's hand in the matter, and it also has the opportunity to agree to Apple's rules for "Fortnite" to be readmitted to the App Store.

There was also some pushback on Epic's repeated declarations that Apple was a monopolist, as well as Epic's disregarding of rules and not being "forthright" with Apple itself. The judge also highlights the oddity of Epic's arguments against Apple comparing a smartphone to a game console due to size reasons, by referencing the existence of the Nintendo Switch.

How did we get here?

The saga between Epic Games and Apple publicly started on August 13, with Epic updating the "Fortnite" iOS and Android apps with a feature enabling users to pay Epic directly for in-app purchases, at a discount. The addition was against App Store rules that required such purchases go through Apple's payment system.

The same day, Apple pulled the game from the App Store for breaking the rules. Epic then went on to file a lawsuit against Apple, demanding changes to App Store guidelines, such as reducing Apple's "exorbitant" 30% in-app purchase commission and alleging rules barring competing app stores were uncompetitive.

Epic also released a video parody of Apple's famous "1984" Super Bowl commercial, but featuring game characters and framing Epic as being the breaker of Apple's control of the App Store. Later, Epic would try to encourage more anti-Apple sentiment with the "FreeFortnite Cup""FreeFortnite Cup" tournament, which offered a skin based on the parody commercial and related prizes.





By August 17, Apple had threatened to pull Epic's access to its developer accounts and development tools for iOS and Mac on August 28. Epic quickly filed a request for a temporary restraining order preventing Apple from delisting the Fortnite app, updates, and "any adverse action against" the developer.

Apple's response to the court was that the situation was a "problem Epic has created for itself," and that it could easily be fixed by Epic issuing an update to the game that complied with guidelines. Apple said it wouldn't "make an exception for Epic because we don't think it's right to put their business interests ahead of the guidelines that protect our customers."

By August 21, Apple revealed a chain of emails starting from June 30 where Epic warned it was going to implement the competing payment processing option, and a wish to create a competing Epic Games Store. Epic gave Apple two weeks to confirm "in principle" to both ideas before it would proceed anyway with implementing payments.

Apple fired back an email about how Epic had earned "hundreds of millions of dollars from the sales of in-app content," as well as pointing out the security, privacy, content, and quality standards involved with the App Store guidelines. In response, Epic declared it would "no longer adhere to Apple's payment processing restrictions" by adding the payment system to the game, effectively forcing Apple's hand in removing the game and triggering legal activity.

On August 23, Epic responded to Apple's filing, reasoning Apple's argument against Epic's request to prevent the ban on tools access was incorrect, goes against Apple's contracts, and that it would significantly not only Epic, but developers using Epic's tools.

The first hearing on August 24 had Epic deemed unable to demonstrate irreparable harm from the ban, with the Judge agreeing it was Epic's own making. However, Apple was also ordered not to take action against Epic Games International's developer account, used to license the Unreal Engine.

Following the decision, Epic continued to grandstand by telling players it wouldn't change, and not to expect updates to the iOS or Mac versions of the game.

In a second attempt to keep the game in the App Store, Epic told the court on September 5 in a formal petition that Apple was violating antitrust protections and "used that same power to try and coerce Epic to abide by its unlawful restrictions." Epic's "irreparable harm" would also include harm felt by countless third parties and the public.

Apple retorted in a September 8 counterclaim demanding Epic be held accountable for a breach of contract, as well as an injunction banning the payment system across all of Epic's apps in the App Store. Epic was said to portray itself as a "modern corporate Robin Hood," but really it was a "multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store."

By September 9, Epic told consumers Apple was stopping access to the game via Sign in with Apple from September 11, but the next day said Apple had provided an "indefinite extension" for the authentication feature. Apple advised in a statement it wasn't actively seeking to disable compatibility with Sign in with Apple, casting doubt on Epic's claims.

A graphic created by Epic to promote its legal battle with Apple.
A graphic created by Epic to promote its legal battle with Apple.


Another court filing on September 16 had Apple accusing Epic of using the affair as a marketing exercise for the game, which Apple believed was declining in popularity. "If Epic were truly concerned that it would suffer reputational injury from this dispute, it would not be engaging in these elaborate efforts to publicize it," Apple said.

Epic's rebuttal countered Apple's claims as "cherry-picked" data sourced from Google Trends, which used a period of time that commenced with high interest caused by an in-game event to maximize the apparent decline in users. By Epic's own figures, it saw daily users increase over the same period by "more than 39%.

Throughout the legal fight, Epic has also courted assistance from critics of Apple who also have problems with the 30% commission. This included Spotify, which is already engaging Apple in an antitrust complaint, a group of newspapers, a group of companies in Korea petitioning the Korean Communications Commission, Microsoft, and the "Coalition for App Fairness."
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Comments

  • Reply 1 of 31
    carnegiecarnegie Posts: 1,007member
    The merits case was already set to be decided by a jury unless Apple changed its mind or the judge decided all the issues through summary judgment. I'm not sure how likely the former is, but I think the latter is quite unlikely. Apple demanded, as was its right, a jury trial on all triable issues when it filed its answer and counterclaims.

    Also, Epic had proposed a schedule which would have had the trial starting in late March or early April while Apple proposed a schedule which would have had it start in early August. So it looks like the schedule will be closer to what Apple had proposed.
    aderutterjahbladelkruppAlex1Nwatto_cobra
  • Reply 2 of 31
    Microsoft angers me in this. They have a history of failing at something and then trying to appropriate someone else’s success for their own gain. 
    Rayz2016MacProBeatsjdb8167Alex1Nkillroyflyingdppscooter63watto_cobra
  • Reply 3 of 31
    MacProMacPro Posts: 19,505member
    I can't understand why if Epic feel it wants a larget net profit per game sold they don't just raise the price to net out what they want after the 30% fee, it's not as if they are not in control of the retail price.
    jdb8167Alex1NkillroyNoFliesOnMepscooter63watto_cobradewmeaderutter
  • Reply 4 of 31
    sflocalsflocal Posts: 6,007member
    This is one trial I would love to sit in for.  It's my hope that Epic gets smacked hard and Apple collects attorney's fees and some serious damages compensation as well.  Would also send a message that trying to squat someone else's house without paying rent will not be tolerated.
    jahbladeAlex1NNoFliesOnMewatto_cobraaderutter
  • Reply 5 of 31
    Apple will lose. 30% is theft..
  • Reply 6 of 31
    johnbear said:
    Apple will lose. 30% is theft..

    hahaha you lose...
    evilutionBeatschasmflyingdppscooter63watto_cobrauraharaaderutter
  • Reply 7 of 31
    johnbear said:
    Apple will lose. 30% is theft..
    "Theft" is relative, but more importantly that Epic cannot process their own payments using their own payment system.  Lose 3% as typical payment systems charge or 30% that Apple charges.
  • Reply 8 of 31
    I really have yet to see any arguement of merit (beyond the inane "30% is theft" arguement - which fails to say what sort of fee isn't theft. I mean, where's the line? 25%? 20%? 15%? 3%? And who determines that line for Apple's own product?) coming from Epic.

    It would seem they didn't get very good advice from their legal council before proceeding with this stunt. Once you have the federal judge openly agreeing with Apple's key points, it really doesn't look good for Epic here.
    jdb8167Fidonet127NoFliesOnMewatto_cobrauraharahammeroftruthaderuttermuthuk_vanalingam
  • Reply 9 of 31
    Apple "could" adjust the guidelines for a two tiered setup
    i)  Use Apple's tools, Maps, Purchase/InApp payment model etc - 30% or
    ii) Do it yourself and have no access to Apples "frameworks" and distribute it all yourself - 5% (or some "royalty" fee)
    In not advocating that the 30% is fair or unfair. Apple "could" take the moral higher ground in this.. The key would be to determine what would be in the "package" that you get for 30%.
    Just my 10 cents..
    Alex1Nrandominternetpersonwatto_cobra
  • Reply 10 of 31
    slurpyslurpy Posts: 5,362member
    johnbear said:
    Apple will lose. 30% is theft..
    "Apple will lose", even though 30% is the fucking standard across virtually all appstores, from Android, to Windows Store, to Sony, Nintendo, etc etc. And Apple arguably provides much, much more than any of those stores through it's first rate tools, ecosystem, infrastructure, APIs, and immense monetizable customer base. 

    But keep trolling. I'm sure you put an incredibly high amount of thought into your posts. 

    lkruppAlex1NBeatspscooter63JosephAUwatto_cobrauraharaaderutter
  • Reply 11 of 31
    johnbear said:
    Apple will lose. 30% is theft..
    I’m only willing to pay 10%. No wait, only 7%. Maybe only 5%. I just can’t decide.
    Beatswatto_cobraurahararetrogustotechconc
  • Reply 12 of 31
    jungmarkjungmark Posts: 6,924member
    johnbear said:
    Apple will lose. 30% is theft..
    Damn right. I want it free with no ads. No way for anyone to make money or pay for employees, benefits, cost of doing business. Everyone should provide their services for free. 
    Beatswatto_cobrauraharaDaRevhammeroftruthaderutter
  • Reply 13 of 31
    Well done Epic, in an attempt to make another 100 million, you are now going to lose 700 million whilst you wait for the court date, which you'll lose.
    Beatswatto_cobrahammeroftruthtechconc
  • Reply 14 of 31
    lazereth said:
    Apple "could" adjust the guidelines for a two tiered setup
    i)  Use Apple's tools, Maps, Purchase/InApp payment model etc - 30% or
    ii) Do it yourself and have no access to Apples "frameworks" and distribute it all yourself - 5% (or some "royalty" fee)
    In not advocating that the 30% is fair or unfair. Apple "could" take the moral higher ground in this.. The key would be to determine what would be in the "package" that you get for 30%.
    Just my 10 cents..
    Not sure I (as customer) like the idea. I don't want to investigate whether the payment goes through "safe" payment gateway, or through some cheap implementation. This is the huge advantage of the Apple's app store.
    Do you remember the HomeDepot leak, the Equifax leak, the Capital One leak..... If the app store is going to contain apps that are paid through different payment gateway, then the store will suffer, because there will be customers like me, that will just stop spending money.  I don't have time to investigate policies, to read about different payment providers.... I will do it only if it is really necessary - and games like Fortnite, and Roblox are really low in the importance charts. Sorry kids..

    tenthousandthingsBeatswatto_cobrauraharahammeroftruthtechconc
  • Reply 15 of 31
    The thing I don’t get is, so they want to process their own payments. Okay! So how much do they pay? Maybe 25% instead of 30%, right?

    Apple would need a way to collect that money. Handling payment processing is just a convenient way to do so. I just don’t see how Epic avoids paying Apple in the end. The whole thing is a waste of everyone’s time.

    There’s something in this that reminds me of the larger societal problem of income inequality.

    The genius of the App Store is the larger developers subsidize the smaller developers — Epic doesn’t want to do that any more.

    EDIT to add that Apple’s position is clear and simple. They are perfectly fine with Fortnite not being available at all on iOS and iPadOS if Epic doesn’t want to contribute its fair share of App Store income. 

    “I’m tired of freeloading billionaires!”
    edited September 2020 BeatsNoFliesOnMewatto_cobrahammeroftruth
  • Reply 16 of 31
    I fully support Apple's position. I see it also as a contract breach and Epic knew what they were doing.  Apple is following their remedies per the contract. At the same time, I really miss playing Fortnite. But it has also broken my addiction and got me to pay attention to other games which I had forgotten, like Minecraft.

    I just think Epic and Tim Sweeney really shot themselves in the foot with a 12 gauge shotgun. Their effed. They couldn't see that Fortnite was a fad just like any others and they have done a pretty good job of ending the fad quicker than time would have.
    Alex1NBeatsgabrielblNoFliesOnMewatto_cobrahammeroftruthaderutter
  • Reply 17 of 31
    BeatsBeats Posts: 3,073member
    johnbear said:
    Apple will lose. 30% is theft..

    Do you know the definition of theft? Are all retailers thieves?

    I really have yet to see any arguement of merit (beyond the inane "30% is theft" arguement - which fails to say what sort of fee isn't theft. I mean, where's the line? 25%? 20%? 15%? 3%? And who determines that line for Apple's own product?) coming from Epic.

    It would seem they didn't get very good advice from their legal council before proceeding with this stunt. Once you have the federal judge openly agreeing with Apple's key points, it really doesn't look good for Epic here.

    Another dumb argument is that Apple is too successful and they need to share their creations. As if allowing Android to exist isn't enough sharing from Apple.

    watto_cobraaderutter
  • Reply 18 of 31
    johnbear said:
    Apple will lose. 30% is theft..
    Was going to comment but saw that other commenters had already reduced you to a smouldering pile of ash
    edited September 2020 Beatswatto_cobra
  • Reply 19 of 31
    johnbear said:
    Apple will lose. 30% is theft..

    Not! EPIC pays more than 30% on some other platforms.
    Beatswatto_cobra
  • Reply 20 of 31
    chasmchasm Posts: 2,579member
    johnbear said:
    Apple will lose. 30% is theft..
    A perfect example of the kind of ignorant armchair-lawyering that reveals how little the writer has bothered to read the summaries AI has thoughtfully provided.

    This case, and this trial, have absolutely nothing to do with the fees Apple charges, or whether its a "monopolist" (not that that's illegal) or any of that. This case is a matter of contract law, and even just reading this one article above -- which I'm not convinced johnbear did either -- would have told him that, because the judge has pointed this out over and over again.

    In short: did Epic abrogate the terms of the contract it signed and agreed to with Apple? Yes it did.
    Do Apple's terms and conditions in the contract meet legal requirements, i.e. they don't violate any law or ask Epic to violate any law? Yes.
    That's pretty much it. Epic created this situation by willfully violating the contract they signed. They're not going to win this case. They've already been told this fairly explicitly.

    Are their other avenues by which Epic might get some of what they want? Possibly -- the government could decide to regulate how much fees can be for digital store places like Apple's (but that would affect all digital storefronts), or perhaps investigate whether iOS/Apple is guilty of monopoly abuse by having only one legit source for software (there's some points to be made about that, but the safety/security argument for a "walled garden" also has some very strong real-world counterpoints -- thanks to Android, Apple has solid proof that their approach is better for consumers). But both of those avenues would require government intervention, and would take many years and many additional court cases to resolve.

    Epic wanted to pull a stunt, generate bad press for Apple, have Apple give in, and live on the App Store rent-free while continuing to charge people for the service they're selling through the App Store, because they want that audience. The longer this thing drags on, the worst it gets for Epic, and the more damage they do to their main income source: their players. If more Fortnite fans knew that those updates they crave could be on the App Store tomorrow if Epic would just play by the rules until they win a legal victory of some sort, they'd be putting a lot more pressure on Epic to get back to normal until they can make whatever point they're trying to make through the proper mechanisms.

    Epic is just a child throwing a tantrum and hoping it will work. Apple is not that kind of parent.
    randominternetpersonBeatspscooter63watto_cobraurahararotateleftbytedewmetenthousandthingslazerethtechconc
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