Corporate sabotage, lawsuits, countersuits, wins and losses, ethical and moral battles—all of these things seem to come straight out of a fictional law book. Surprisingly enough, all of these things happened last year when two tech giants went head-to-head in a lawsuit on monopolies. This is the story of the Epic Games V. Apple Lawsuit and what it means for developers all around the world. 

Let’s start off with the background of these two companies. According to Britannica, Apple is an American manufacturer of personal computers, smartphones, tables, and computer software. In addition to that, Britannica credits Apple as the “first successful personal computer company and the popularizer of the graphical user interface.” Apple was also the inventor of the smartphone that a lot of us own. Meanwhile, Epic Games, the company that created Fortnite, developed the Unreal Engine, a game engine that allows game developers to code sequels without having to start from scratch. 

Now that we have that out of the way, what led up to this lawsuit? From 2018 to 2020, Fortnite made $1.2 billion through Apple’s app store. Apple, who takes a 30% cut of all video game purchases made, ended up leeching $356 million from that $1.2 billion. While that may not seem like a lot, it is a sizable amount for a company that was growing for most of that time. 

When Apple takes 30% of a $10 purchase, the creator loses $3. When we add this loss of money up over time, it accumulates to hundreds of thousands of dollars that the creators lose. This loss of money prohibits companies from reinvesting money back into themselves to make better features to encourage customers to make in-app purchases. 

In August of 2021, Epic Games started off a set of events that led up to a lawsuit when it created its own in-app payment system for its golden goose, Fortnite. This payment system bypassed Apple’s own payment system and allowed Epic Games to lower their price of all in-game currency purchases by 30%. Knowing this alternate payment system would not be good for them, Apple kicked Fortnite off the app store by taking away Epic Games’ developer rights and prevented them from updating their game anymore. Epic Games expected this and filed a lawsuit against Apple on the same day. Epic Games filed this lawsuit on the count that Apple was a monopoly or, in other words, performing antitrust conduct. Apple countersued Epic Games under the count that they broke Apple’s Terms of Conditions. 

The case, handled by Yvonne Gonzales Rogers, a judge of the United States District Court for the Northern District of California, began on May 3, 2021. During the 3 week case, Epic Games and Apple debated on whether or not Fortnite was a game or an Ecosystem, which means several different games in a single app, and whether or not Summer Peeley, an alternate style of the Fortnite banana skin, was clothed or not.

Many companies, like Microsoft and Spotify, supported Epic Game’s position. Brave, a browser with a crypto reward system as its main selling point, had fought against Apple before. If we view a certain amount of advertisements, we would get a share of the money made in their Basic Attention Token (BAT). Brave’s reward system was something unique to them, and Apple took that away. Brave was told that either they remove that feature from their browser, or Apple would make the browser no longer available on the app store. Brave faced the wrath of Apple and were forced to comply, and this was what Epic Games was fighting for. Or at least that’s what their Public Relations team marketed it to be.

In addition to Judge Rogers, there were other notable people involved in the case:

The significant players in this case were:

• Tim Cook, the CEO of Apple
• Tim Sweeney, the CEO of Epic Games 
• Gibson Dunn, the law firm used by Apple
• Cravath Swaine & Moore LLP, the law firm used by Epic Games

The final result for the case was released on September 10, 2021. Of a total of 10 counts, Apple won 9 of them. The other count, that Apple was breaking anti-competitive laws in California, was won by Epic Games. 

Keep an eye out for the second part of the article, Epic Games V. Apple: What It Means for the Future, to learn about what the effects of the case are on all of us, from consumers to Epic Games executives.

 

written by Edward Christopher

edited by Saanvi Gutta and Tryphena Pilli

 

References:

Gallagher, D. (2021, September 10). Apple’s walled GARDEN springs a leak. The Wall Street Journal. Retrieved September 27, 2021, from https://www.wsj.com/articles/apples-walled-garden-springs-a-leak-11631301916?mod=searchresults_pos3&page=1. 

Higgins, T. (2021, September 10). Judge orders Apple to loosen App store restrictions in mixed verdict. The Wall Street Journal. Retrieved September 27, 2021, from https://www.wsj.com/articles/apple-trial-ends-in-mixed-verdict-after-fortnite-makers-monopoly-allegations-11631289792?mod=searchresults_pos11&page=1. 

Board, T. E. (2021, September 12). Opinion | an antitrust victory for Apple. The Wall Street Journal. Retrieved September 27, 2021, from https://www.wsj.com/articles/antitrust-victory-apple-fortnite-epic-11631476049?mod=searchresults_pos9&page=1. 

Higgins, T. (2021, September 12). Apple judge’s Warning Suggests App STORE fight is far from over. The Wall Street Journal. Retrieved September 27, 2021, from https://www.wsj.com/articles/apple-judges-warning-suggests-app-store-fight-is-far-from-over-11631363400?mod=searchresults_pos10&page=1. 

New fortnite skins summer legends pack/bundle leaked. Fortnite Insider. (2020, September 10). Retrieved September 27, 2021, from https://fortniteinsider.com/new-fortnite-skins-summer-legends-pack-bundle-leaked/.