Apple's argument with Epic Games, the company behind the popular battle game Fortnite, goes back to June, the tech giant said in a Friday filing. And it started with Epic asking for a deal to offer a competing app store and payment system on iPhones, separate from Apple.
Apple said it received an email from Epic's CEO Tim Sweeney on June 30, asking for a "side letter" that would create a special deal for Epic, allowing the company to break App Store guidelines other companies can't. Among them, Apple doesn't allow developers to create separate app stores, nor does it allow companies to offer alternative payment processing in their apps.
"Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified," Phil Schiller, an Apple Fellow and former head of Worldwide Marketing, said in a statement filed with the court.
"Apple has never allowed this," Apple said in its filing. "We strongly believe these rules are vital to the health of the Apple platform and carry enormous benefits for both consumers and developers."
What followed, after more emails back and forth between the two companies, was an early morning message from Sweeney to Apple on Aug. 13. In it, he said Epic would break the App Store rules. A few hours later, it activated a hidden payments system in the app, breaking Apple's rules.
The back and forth offers a look into the discussions between the two companies before Epic activated code in its Fortnite app that allows players to use its payment processing instead of Apple's. The iPhone maker responded, booting Fortnite from its App Store, to which Epic sued. Since then, iPhone and iPad users who have Fortnite installed on their phones can still play, but everyone else is no longer able to download the app.
It all boils down to money, who has how much of it and for what reasons. Apple's stuck by its up to 30% commission for payments made in apps, despite developer complaints. The company says the commission is fair and in line with other companies like Google. But companies large and small increasingly disagree. And it's causing regulators to take a look at the issue too.
Spotify filed a complaint to the European Union over Apple's commission, helping to touch off an investigation into the App Store announced in June. Regulators in the US are investigating Apple too.
Even lawmakers on Capitol Hill are considering action. In a July Congressional hearing on antitrust, Apple CEO Tim Cook was asked whether his company treats developers fairly and whether it retaliates against ones it doesn't like. "We do not retaliate or bully people," Cook said. "It's strongly against our company culture."
Epic argued in a filing to the court that Apple "retaliated ferociously" to its moves with Fortnite, threatening to ban Epic from its developer program. Epic says outside developers who use its Unreal Engine game developer tools would be hurt as a result. Epic's argued to the court, and in public, that Apple's inflexible rules stifle competition and hurt app developers broadly, too.
Epic's lawsuit alleges that Apple has become a "behemoth seeking to control markets, block competition and stifle innovation."
"Apple is bigger, more powerful, more entrenched and more pernicious than monopolies of yesteryear," Epic said in its initial suit. "Apple's size and reach far exceeds that of any technology monopolist in history."
Bringing back Fortnite
Apple's filings on Friday were in response to Epic's request to a judge for a temporary restraining order, effectively allowing Fortnite back to the App Store even though it's violating Apple's guidelines. The court is planning its first hearing next week.
Apple said Epic doesn't have legal grounds to have a court force Fortnite back onto its app store because, as Apple said, Fortnite is suffering from "self-inflicted wounds." "All of the injury Epic claims to itself, game players, and developers could have been avoided if Epic filed its lawsuit without breaching its agreements."
Apple further repeated its offer for Fortnite to come back to its App Store, so long as Epic removes the payment system breaking its rules. "All of that alleged injury for which Epic improperly seeks emergency relief could disappear tomorrow if Epic cured its breach," Apple said in its filing.
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