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Businesses The Courts Apple

Apple Fires Back in Court, Says Epic Games CEO Asked For Special Treatment (cnbc.com) 163

Apple responded to Epic Games' lawsuit accusing it of anticompetitive behavior in how it controls the App Store, telling the court that the Fortnite maker violated Apple's rules and shouldn't be placed back into the store temporarily while the legal battle rages. From a report: In its filing, Apple alleges that Epic Games asked for an individual arrangement with Apple, producing three emails from Epic CEO Tim Sweeney that bolster its claim. This is Apple's first significant legal response to Epic Games after the dispute between the two companies spilled into the courts. It comes the week after Epic Games released a direct payment mechanism inside Fortnite designed to bypass the App Store's payment system, from which Apple takes a 30% cut. Apple subsequently removed Fortnite from its store for violating its policies. People who already have Fortnite installed on their iPhones can continue to play, but cannot update or download the app for the first time.
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Apple Fires Back in Court, Says Epic Games CEO Asked For Special Treatment

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  • by dmay34 ( 6770232 ) on Friday August 21, 2020 @02:21PM (#60427587)
    Another round of lawyers minting millions for themselves in the courts. Can't wait for nothing to happen. Just like all of the rest of the court cases.
    • by jellomizer ( 103300 ) on Friday August 21, 2020 @02:34PM (#60427615)

      Stuff happens, when these companies are not out for blood.

      The problem with say Apple vs Samsung. Was that Apple was out to bankrupt Samsung, so the proposed punishment basically kept on going back and forth until it was manageable.

      Justice isn't Revenge. The Justice System roll is to find a just ruling. If Epic has a strong case, Apple will probably do something out of court. If Apple has a strong case, then Epic may back down. If both have a strong case and it goes into full court the stakes are High especially for Apple as an entire business model is at risk.
      But at this point Apple cannot back down.

    • Can't wait for nothing to happen.

      Two companies are suing each other. Something always happens, whether money changes hands or contract terms change... just like the rest of the court cases.

  • Shocking! (Score:5, Funny)

    by Opportunist ( 166417 ) on Friday August 21, 2020 @02:27PM (#60427597)

    They DARED to want to negotiate a deal instead of just swallowing whatever Apple wanted them to sign! Imagine that chutzpa!

    • It's not that they aren't legally allowed to do that.

      The "chutzpah" is the fact that they're running that ridiculous ad campaign that makes them out to David versus Apple's Goliath. They only started pretending to give a shit about anyone else because they want the public to back them, when in reality it's just two giant, greedy companies duking it out.

      • -- In your world: --

        Q: What does a poor person call any court case?

        A: Just two rich people fighting.

        --- END ---

        That worldview fails to understand that the rule of law and how a discovery of justice in one place helps everybody, even though with less resources.

    • by v1 ( 525388 )

      They DARED to want to negotiate a deal instead of just swallowing whatever Apple wanted them to sign! Imagine that chutzpa!

      Tha's not how it unfolded it went more like:

      EPIC: "hey we went to sell our game through your store!"

      APPLE: "ok, just read our rules and if they look ok and you're going to follow them, sign up!"

      (epic signs the contract)

      (time passes)

      (epic's game becomes one of the best sellers on the apple store)

      EPIC: Yeah that deal we agreed on earlier, we're not making enough money, we want a bigger cu

  • by Junta ( 36770 ) on Friday August 21, 2020 @02:29PM (#60427601)

    Epic didn't like the terms and find them unreasonable. They sought at least an exception. Sure it would have been *nice* if they asked for the terms to change across the board, but generally you aim your sights a bit more realistic.

    I don't see how Epic seeking a unique exception to unreasonable terms detracts from their claim that the terms were unreasonable. It may slightly make them less altruistic looking, but their legal arguments would seem to be unaffected either way by such a reality.

    • Contracts (Score:5, Insightful)

      by JBMcB ( 73720 ) on Friday August 21, 2020 @02:35PM (#60427617)

      Are they making a legal argument that the terms of the contract are unfair? That's a strange position to take, as they were OK with them until this point. Are the terms of the contract illegal? Epic has entered into similar contracts with Microsoft and Sony (they get cuts of in-game sales as well - Microsoft also takes 30% of X-Box sales.)

      • by Junta ( 36770 )

        The argument is probably that the state of all those software store terms are illegally anti-competitive.

        It'd be like "if you agree to accept Visa at all, then you will refuse to accept cash or Mastercard and force all customers to use Visa".

        Epic Games on PC and on Android at least have the option of offering a sideloaded channel for their 'store' if they don't like the store but still want access to the customers of the platform. For iPhone, and game consoles, they don't really have that luxury.

        • by laxguy ( 1179231 )

          it has nothing to do with "loading the game" - it has everything to do with V-bucks (Fortfucks fake currency)

          Epic doesnt like that Apple demands a 30% cut so they implemented their own way for kiddies to buy their V-bucks without giving 30% to Apple (and then flipped them off and now were here). thats the story, Epic wants to rent a room in Apples hotel, but doesnt want to pay to stay there.

          • Except it isn't Apple's hotel, it is my hotel (device). I bought it and it is mine. While the store is Apple's, if they don't allow any other option for me to put software on it, I believe they shouldn't be allowed to set any terms that they feel like that minute and can change any second. If they want to make whatever rules they want, I think they must allow another store or method for me to add apps. We have had open hardware separate from software for much too long for me to accept anything less.
            • Except it isn't Apple's hotel, it is my hotel (device). I bought it and it is mine. While the store is Apple's, if they don't allow any other option for me to put software on it,

              Apple made clear from their legal filing that they consider your device (at least from the OS up, as far down as they can grab) to be theirs.

          • by Junta ( 36770 )

            The point being that by blocking 'loading the game' except through the store, the blocking for direct payment doesn't offer an alternative.

            If they did this against Google, Google could say "if you don't find value in Play store, then fine, tell all your players to sideload". Google Play payment processing is not a hard requirement to make your software available to users with Google devices, though users will have to agree to scary warnings making sure they understand what it is potentially doing.

            So the arg

            • by laxguy ( 1179231 )

              they did do this against Google, and Google simply removed them as well.

              plenty of other companies/apps find ways to extract payments from users without breaching contract. Epic did this willingly knowing exactly what they were doing.

              • Did it ever occur to you that the contract itself is not fair and needs to have the law step in and correct it? iOS cannot have only one store forever, its an untenable situation.
                • OS cannot have only one store forever, its an untenable situation.

                  Why?

                  I would wager that close to 99% of Apple's Users are completely fine with the App Storeâ(TM)s âoeCompany Store" policy; and, unlike the whiners at Slashdot (99% of which who coincidentally don't even have standing; because they use Android), understand that you cannot have a platform as blissfully malware-free as iOS. (and its progeny), and allow alternate sources of Apps.

                  Why? Because Apple (and its Users) know that it won't matter to the public is someone got malware from sideloading an App;

              • by Junta ( 36770 )

                My point is that while they are removed from Google's store, they are still able to install on Google devices. Therefore going after Google is a high risk of being utterly fruitless because they have a viable alternative to Google's store to reach Google handsets (they just have to provide their own infrastructure and basically inflict zero burden on Google and users are clearly notified about what they are risking or not, and the platform security model does a good job in general of containing the risk).

                Be

          • I don't think its that simple. Its more to do with the fact that Apple (or whoever) don't just want a cut from the initial sale; they also want a cut of all sales within the app as well. The hotel analogy is pretty poor, but running with it anyway - its more like renting a room in Apple's hotel and they also want a cut from any business deals you make whilst staying there.

            I can see their dilemma. If they don't take a cut then everyone will give their app away and charge fees inside the app. But it still fee

          • it has nothing to do with "loading the game" - it has everything to do with V-bucks (Fortfucks fake currency)

            Epic doesnt like that Apple demands a 30% cut so they implemented their own way for kiddies to buy their V-bucks without giving 30% to Apple (and then flipped them off and now were here). thats the story, Epic wants to rent a room in Apples hotel, but doesnt want to pay to stay there.

            Yeah. One of the problems with Epic's argument is that they need to claim that Apple has a monopoly on distributing apps to iOS - it has to be that narrow, because if the market is "software" or even "mobile apps", there are lots of other marketplaces, and Apple clearly doesn't have a monopoly. The only place they could have a monopoly is on selling apps to iOS users.
            ... but if you start defining the market that narrowly, Epic has a monopoly on selling in-game items to Fortnite users. You have to use V-buc

      • by Sloppy ( 14984 )

        That's a strange position to take, as they were OK with them until this point

        While I disagree that antitrust law sensibly applies here, my understanding is that Epic is saying it does apply. So therefore it's possible that Apple wasn't a monopoly a few years ago when Epic agreed to the contract, but some statistic changed in the interim, thus causing them to become one recently. (e.g. maybe some competing console/phone/computer manufacturers went out of business a few weeks ago, and most of us simply missed

        • by bws111 ( 1216812 )

          You do not have to have a monopoly to violate antitrust laws. In the Apple ebook pricing case Apple was found guilty of antitrust violations even though they had virtually zero market share in ebooks. What matters is not if you are a monopoly or not, but if you are engaging in anticompetitive behavior. The claim here is that, by not allowing any way for a developer to release an app other than going through the App Store, Apple is engaging in anticompetitive behavior.

      • Here are their legal arguments.

        https://cdn2.unrealengine.com/... [unrealengine.com]

      • Are they making a legal argument that the terms of the contract are unfair?

        No, they are making a legal argument that Apple has violated antitrust law (through their contract, but also through technological means, locking down their platform).

    • by aitikin ( 909209 )

      Epic didn't like the terms and find them unreasonable. They sought at least an exception. Sure it would have been *nice* if they asked for the terms to change across the board, but generally you aim your sights a bit more realistic.

      I don't see how Epic seeking a unique exception to unreasonable terms detracts from their claim that the terms were unreasonable. It may slightly make them less altruistic looking, but their legal arguments would seem to be unaffected either way by such a reality.

      I feel like this is virtue signaling on behalf of Apple more than anything. Apple's trying to get out in front and say, "You were the ones asking for special treatment, we're just trying to treat all developers equally*. We're not the bad guys here!"

      *That being said, the Netflix, Hulu, and Amazon Primes of the world have different payment terms from what I understand, so that's not going to fly very well

      Regardless, could someone pass the popcorn?

    • They're really playing up the altruism angle, though. Oh, Epic just wants a better deal FOR ALL developers.

      Really, Tim Sweeney the Benificent wants you to stop making Apple and Google rich by paying them 30% and instead make HIM rich by paying 12%. Stop buying your games from Steam, buy them from Tim. Lock-in is bad unless Epic is doing it.

      I don't even mind being locked into a system, I just hate his faux concern for customers, like this isn't about him getting slightly richer.

    • Sure it would have been *nice* if they asked for the terms to change across the board,

      They did. Check the lawsuit, page 2, section six: [unrealengine.com]

      "Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers."

      • "Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers."

        They don't have standing to represent those parties, sorry.

        It just underscores how disingenuous Epic's lawsuit is. And how stupid their legal team is.

        Summary Judgment time!

        • They don't have standing to represent those parties, sorry.

          This shows such a misunderstanding that you shouldn't have written it. The document I linked to describes carefully why they have standing, and specifically why they have standing in the particular court they chose.

    • I don't see how Epic seeking a unique exception to unreasonable terms detracts from their claim that the terms were unreasonable.

      It depends on what you're exonerating Apple for. Most of the court cases and investigations into Apple are the result of Apple treating companies differently to each other. That is something potentially illegal.

      This here is nothing more than evidence that Epic thinks they are special and above the ToS that apply equally across the board. It's not an exoneration, it's just a piece of evidence in a larger case. This will not end well for Epic since Apple doesn't owe Epic shit.

  • Isn't anyone who refuses the standard terms of a huge corporation asking for "special treatment?" I don't see that as a very strong argument.

    Having said that, iProduct users bought a seat in the walled-garden and I'm not convinced that fairness demands that Apple give vendors a better deal than they can extract.

  • by schwit1 ( 797399 ) on Friday August 21, 2020 @02:36PM (#60427621)

    https://www.cnbc.com/2020/08/2... [cnbc.com]

    Apple offered Amazon a special deal in 2017, only making the e-commerce giant pay a 15 percent fee on customer subscriptions for Amazon’s Prime Video app via the App Store. Other developers pay a 30 percent fee for most in-app purchases.

    • by HumanEmulator ( 1062440 ) on Friday August 21, 2020 @03:04PM (#60427701)
      Amazon literally stopped selling Apple products to get that deal. So the message has been clear: Apple won't give you a fair deal unless you harm their business. Apple brought Epic's actions on themselves.
      • by fazig ( 2909523 )
        It is ironic.

        But if there's been a law violated, I say let them set the precedent that'll backfire on them.
        The same goes for Epic. Breaking Apple's walled garden open, might have other people want Epic's walled garden broken open as well.

        As a developer and consumer who doesn't own stakes in any of these corporations, I see this as a win-win if they succeed in their lawsuits.
    • Apple offered Amazon a special deal in 2017, only making the e-commerce giant pay a 15 percent fee on customer subscriptions for Amazon’s Prime Video app via the App Store. Other developers pay a 30 percent fee for most in-app purchases.

      Ironically this is because Amazon were the ones abusing their market power to get the deal.

  • by t0qer ( 230538 ) on Friday August 21, 2020 @03:03PM (#60427699) Homepage Journal

    Then 7-11 got so big it stopped. What happened?

    7-11 negotiated with their credit processors and ATM vendors. Basically telling them, "Hey, if you're in our store we should be charging YOU money for advertising. Don't like it? We'll go elsewhere!"

    That's the biggest problem with app stores. There is no elsewhere. Despite this being 2 money grubbing assholes I'm glad one of them is putting apple in their place.

    • Epic is not a money grabbing asshole. Or maybe in your world all money is bad, I can't argue in that case.

      But Epic is well known for Fortnite which does NOT prey on people with pay-to-win. I don't even play they game or own Epic, but I respect that this is way better than other game companies.

    • There is no elsewhere.

      No one owes you shelf space in a store. No one owes you a podium. And no one owes you a special place in the iOS app store with a special set of rules that apply only to you.

      Market power ultimately helps in negotiation, but fundamentally that doesn't change anything underlying in a company. 7-11's efforts had no influence outside 7-11 and it only happened because the credit processors needed 7-11 more than the other way around. There is nothing different here. Amazon got a special deal from Apple as they we

  • although the letter did note that “we hope that Apple will also make these options equally available to all iOS developers.”

    We want a special deal, that we hope you also give everybody else. So much for a special deal.

    • To quote the Epic lawsuit [unrealengine.com]:

      "Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers."

      Page 2.

      • by Cederic ( 9623 )

        Hmm. Without the details of the emails cited, it's quite possible that what happened was:
        - Give us a deal
        - no
        - Ok. Court, give everybody a deal.

        Negotiations on a contract would typically be between the two sides in the negotiation. Court action alleging a breach of the law must perforce address that breach, which benefits all impacted parties.

        • Asking for special terms and getting rejected strengthens their court case, because it concretely demonstrates that Apple was not willing to allow them to do these things (use an alternate form of payment).

          Now it's up to the court to decide if Apple's rejection is anticompetitive behavior. The facts are not in dispute, only the interpretation of the law related to the facts.
  • Apple(The Walled Garden Monopoly) says no! Our 30% cut for letting you be in the Garden is fair. Nothing to see here folks all is as expected.

    But Epic had to expect this, what is their next move? You do not do something like this with out a plan of some kind.
    • It is fair. Epic is provided with a massive customer base, pre-filtered to run their game satisfactorily.
      Apple worked for those credit card accounts, maintains them securely, and handles all of epic's
      account management for them for iPhone and iPad customers.

      Those micro transaction fort-bucks all run thru systems that Epic didn't have to build or maintain or host. Epic knows this. They just want to kill competition both big and small.

      No App Store? Then Xcode will cost $2,500/yr per seat, like in the old day

      • Epic doesn't need Apple to handle all of those details. They have their own systems for all of that. The only thing they need is Apple's blessing to be executed on their platform. I can't speak to whether a court will eventually find this to be illegal, but it should because none of this is in the consumer's interest. It's all for vendor lock-in.

        I understand the argument that the user agreed to the terms and conditions, but it's really not in the people's best interest to allow these restrictions. Google's

        • If they need it, then pay the asking price.

        • I can't speak to whether a court will eventually find this to be illegal, but it should because none of this is in the consumer's interest. It's all for vendor lock-in.

          IMO that is the strength of the Epic case filing. They've done a good job showing that the Apple lock-down hurts consumers.

      • "Then Xcode will cost $2,500/yr per seat"
        then I stop using XCode/Doing Apple Development in any way.
        I abandoned Windows Development because of the big MSDN price hikes(first 2999.00 goes to MS every year) back in the day. I can do the same with iOS and OS X development.

        Think about it, over my 30 years of being an independent work for hire developer. The government takes 35% - 37%, If Apple takes 30%, If Google takes their ??%, Amazon takes their 8%-15%(based on product category) usually keeps switching to
    • But Epic had to expect this, what is their next move? You do not do something like this with out a plan of some kind.

      This is part of the pre-fight. Epic asked to be allowed back onto the Apple store without modifying their app, until the court case ends. Apple counter-argued that they should not be allowed back on the store until they modify their app. If the ruling is against Epic, they can either disable the code and get back on the Apple store, or stay off the Apple store until later.

      Eventually the main fight comes. Is Apple a monopoly? Epic says yes, for ten different reasons [unrealengine.com], that Apple has violated federal antitru

    • The next move is that Amazon Video Streaming got a special deal.

      https://www.theverge.com/2020/... [theverge.com]

      So it is not unprecedented. The little deals are for the little guys. There is clearly special treatment for big players.

  • Watching Apple and Fortnite fanbois go to war, there is not enough popcorn in the world for that.

  • by presearch ( 214913 ) on Friday August 21, 2020 @04:12PM (#60427885)

    Walled garden, walled garden!!
    I can't get over it, I can't get under it! No fair, no fair!

    Sounds more like engineers with no balls and no skills.
    With the manufacturing and component resources these days, and with all this bitching about
    Apple is not worth paying anyway, get your own damn phone built.

    If iPhones are just fanboi products, it should be easy to leap past everything they make.
    Then load what ever you want, put your address book and email and bank info on it.
    Download some drivers (again). Tweak some config files. Apply some patches. Reboot.
    Send Epic some money. Knock yourself out.

  • How much was the i-Bill this month?
    25m bought us into the walled garden, sir. This is a monthly expense.
    How much is the legal bill this month?
    10m, all they did was write a couple EULAs, sir. This is a monthly expense.
    How much revenue this month?
    250m, the mob loves us, sir. We expect more next month.
    Why the @$%@ am I paying these lawyers 10m for nothing? Put them to work on the i-Bill!
    Yes sir.

    (Pulled the numbers out of my ass, but you get the idea)

  • While I'm not a lawyer, I don't think Epic has a leg to stand on in this case. If Apple had around 80% or more of the smartphone and/or tablet marketshare, then Apple's actions could be considered in violation of US anti-trust laws, but since that is not the case, I fully expect Epic to lose this case. With that said, I don't think Epic's intent was ever to win this lawsuit. The lawsuit seems to be intended to put Apple's behavior under the microscope and apply pressure on them in the court of public opi
    • by bws111 ( 1216812 )

      Antitrust law does not require a monopoly. It regulates anticompetitive behavior. Apple lost the ebook pricing antitrust case even though they had virtually no market share.

      • Apple lost the ebook pricing antitrust case even though they had virtually no market share.

        True but price-fixing laws are independent of anti-trust law and do not apply at all in this situation.

        • by bws111 ( 1216812 )

          Uh, no. They were prosecuted under the Sherman Antitrust Act, which is pretty much THE antitrust law for the US. While this case does not involve price fixing, it still involves other violations of the Sherman act.

    • I don't think Epic has a leg to stand on in this case. If Apple had around 80% or more of the smartphone and/or tablet marketshare, then Apple's actions could be considered in violation of US anti-trust laws, but since that is not the case, I fully expect Epic to lose this case.

      Epic literally responded to this point in their filing [unrealengine.com], and said that since it's hard for users to switch to another phone manufacturer, under the law the rest of the smartphone market doesn't count as a direct competitor.

  • does apple take an 30% vig on sports book apps?

  • Could that famous old expression apply to both contenders?

    The lawyers must be loving this stuff. Well, Apple has plenty of cash; donno about Samsung and Epic Games so much.

  • Doesn't Apple get special treatment in Ireland? Don't all companies large enough to use tax havens get special treatment, really?
  • I can guarantee this more about forcing Apple's hand into court so it can get a decision that a third party store should be allowed on iPhones and such. That way, Epic store can be loaded, then an exclusivity war can be started between Epic and Apple.

    Oh, the times we live in - exclusives keeping me from playing a game at release on PC, and soon the same on iPhones.

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