Epic Games Loses Again on Restoring Fortnite to Apple Store
(Bloomberg) - Epic Games Inc. once again failed to force Apple Inc. to reinstate Fortnite in its app store while the game developer is asserting its antitrust claims against the iPhone maker.
A federal judge in Oakland, Calif., On Friday turned down Epic's offer for an injunction that would require Apple to reinstate the Battle Royale video game on the App Store - and allow Epic to use its own payment option. Apple removed Fortnite in August after Epic implemented a direct payment option for in-game purchases that bypassed Apple's payment system.
It is Epic's second setback in its lawsuit, according to which Apple operates its app store as an illegal monopoly by banning developers from making their iPhone and iPad apps available through their own websites. Instead, Apple only allows downloads and payments through the App Store and pays 30% of the purchase price. The case will now be brought to trial next year.
What Bloomberg Intelligence Says
Epic's antitrust lawsuit threatens the billions in revenue generated by the App Store.
- Jennifer Rie, Senior Litigation Analyst
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While Epic is not asking for monetary damages, it is calling for an order that complies with Apple's rules and opens iOS devices to competing app distributors and payment systems, which could severely limit app store revenue, Rie said.
In a consolation for Epic, the judge stuck to her earlier decision that Apple cannot remove Epic's Unreal Engine from its developers' tool program because the software program used by third-party developers is not part of the antitrust battle.
Behind the battle between Apple and Fortnite App Store: QuickTake
US District Judge Yvonne Gonzalez Rogers said in her ruling that due to the novelty and scale of the issues raised in the lawsuit regarding competition in digital marketplaces, she was unwilling to tilt the pitch in favor of either side.
"This matter raises questions about the boundaries of antitrust law in the United States," said Rogers. “Simply put, there is no such thing as an analogous authority. The issues and issues raised in this litigation concern novel and innovative business practices in the technology market that have otherwise not been the subject of antitrust litigation. "
The judge reiterated her position that Epic's predicament was inherent in breaching her contract with Apple by inserting a hotfix in Fortnite to bypass Apple's payment system. Epic "flatly" rejected the judge's suggestion that if Epic brought Fortnite back to Apple without the hotfix, Apple's 30% in-game purchases would be placed in an escrow account until the case is settled in court according to the ruling.
"Epic Games is grateful that Apple is still not allowed to retaliate against Unreal Engine and our customers in game development in the further course of the lawsuit," said a company spokesman. "We will continue to evolve under the protection of the court for iOS and Mac and we will do everything possible to end the anti-competitive behavior of Apple."
Apple denies running its app store as a monopoly, claiming that it faces stiff competition in every market it operates in, including gaming.
"We are grateful that the court recognized that Epic's actions were not in the best interests of its own customers and that problems they may have encountered were caused by themselves when they breached their agreement," said Apple in a statement.
Apple has said that Epic's chief executive officer Tim Sweeney was looking for a side deal for an exclusive storefront for Fortnite. A move Apple executives argued would fundamentally improve the way the App Store works. Sweeney claims he did not ask for special treatment, but that Apple give the same option to all developers.
Unreal Engine is a software suite that developers use to create 3D games and other products. Epic's performance on Apple's iOS and Mac developer tools would mean the game company would no longer be able to distribute Unreal Engine to other developers, according to Epic. Microsoft Corp., maker of Xbox, is leveraging the technology to create games designed for consoles, PCs, and mobile devices, and is helping Epic in court.
The case is Epic Games Inc. v Apple Inc., 20-cv-05640, US District Court, Northern District of California (Oakland).
(Updates based on the justification of the judge in paragraph six.)
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