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Apple hits back in Epic Games dispute, as Microsoft takes sides

By Chris Cooke | Published on Monday 24 August 2020

Apple has hit back at ‘Fortnite’ maker Epic Games as the two companies’ very public battle over the former’s App Store policies continues to escalate. Meanwhile, Apple rival Microsoft has officially come out in favour of Epic in the dispute, at least in part.

Earlier this month, Epic followed Spotify’s lead in taking its dispute over Apple’s App Store rules public. Epic, like Spotify, doesn’t like the 15-30% commission that Apple charges on any in-app purchases made on iOS devices, nor the Apple rules that mean app makers can’t even direct users to alternative payment platforms outside the app.

Last year, Spotify launched a consumer-facing website outlining its grievances with Apple’s rules, while asking the European Commission to investigate whether those rules violate competition law. Epic has gone much bigger with its beef, launching a full-on Apple-dissing ad campaign and accompanying #FreeFortnite competition for its users. Meanwhile, on the legal side, it has sued Apple in the Californian courts.

Whereas Spotify simply stopped taking monies via its iOS app in order to circumvent the rules, Epic inserted an alternative payment platform into its iOS ‘Fortnite’ app, outright violating the law of Apple. As a result, it’s been kicked out of the App Store, giving the whole dispute more urgency, as those who play ‘Fortnite’ on iOS devices won’t be able to get upcoming updates to the game.

The impact of the big Epic v Apple dispute will also be felt way beyond the world of ‘Fortnite’, if the latter goes through with its threat to also cut off the former’s access to its developer tools. That would also affect other Epic products, including its Unreal Engine, which is in turn used by a plethora of other third party developers, meaning countless apps would be caught up in the battle.

With that in mind, Epic last week filed new legal papers with the courts seeking an injunction halting all Apple sanctions pending the outcome of its original lawsuit. And it’s that move that has been backed by Microsoft.

The Xbox maker’s General Manager for Gaming Developer Experiences, Kevin Gammill, made his own legal filing this weekend, urging the courts to prevent Apple from introducing any measures that will hinder the Unreal Engine while this competition law dispute goes through the motions.

“Epic Games’ Unreal Engine is critical technology for numerous game creators including Microsoft”, he wrote. “Many of these creators do not have the resources or capabilities to build their own game engines and rely on the availability of third-party game engines, while other creators may choose to use third-party game engines to save development costs and utilise already-developed technologies”.

“Apple’s discontinuation of Epic’s ability to develop and support Unreal Engine for iOS or macOS will harm game creators and gamers”, he went on. “[Developers using the engine] would have significant sunk costs and lost time using Unreal Engine for game creation, and would have to choose between (a) starting development all over with a new game engine, (b) abandoning the iOS and macOS platforms, or (c) ceasing development entirely”.

However, in its response to Epic’s lawsuit and injunction request on Friday, Apple was pretty clear. Any harm Epic and its Unreal Engine will suffer as a result of Apple’s sanctions are entirely self-inflicted. There is an easy fix to it all too, it added. Epic can bring its ‘Fortnite’ app back in line with Apple’s rules in the short term and then proceed with its legal action against the tech giant’s App Store policies. If it could also stop pushing out anti-Apple rhetoric to its userbase on social media, that would be lovely.

Injunctions like the one Epic seeks “exist to remedy irreparable harm”, Apple said in its legal filing, “not easily reparable self-inflicted wounds”. After all, it added, “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 [with Apple]”.

Instead, the legal filing went on, “Epic executed a carefully orchestrated, multi-faceted campaign, complete with a parody video, merchandise, hashtag, belligerent tweets and now a pre-packaged [inunction request]”.

In a separate document filed with the court, Apple’s Philip Schiller set out the tech giant’s side of the story. He ran through various emails that went back and forth between Epic chief Tim Sweeney and senior Apple execs before the gaming firm decided to go nuclear.

And then he set out Apple’s various arguments as to why its App Store policies are fair, many of which were made when Spotify went public with its beef last year. As with Spotify, Apple basically accuses Epic of wanting a free ride, despite being a significant beneficiary of the iOS platform that Apple has invested heavily into building over the years.

“The significant investment in this business model has paid off not just for Apple”, Schiller wrote, “but also for app developers large and small, including Epic. Because of Apple’s rules and efforts, iOS and the App Store are widely recognised as providing the most secure consumer technology available, to the benefit of consumers and developers alike”.

The demands of Spotify and Epic, Apple reckons, would mess up that business model, screwing things up for everyone, not just the tech giant itself. Which is why Apple has to enforce the rules across the board. “This entire ecosystem would be in jeopardy if developers are allowed to breach their agreement without consequence as Epic has done”, Schiller mused.

Elsewhere he wrote: “Epic’s conduct is akin to a manufacturer walking into a retail store and asking shoppers to pay the manufacturer directly for their products, leaving the store itself with nothing for its efforts”.

Which maybe it is, depending on how you look at it. Some might argue that Apple’s App Store rules are more like a retailer’s landlord demanding a cut of every sale that takes place in its building and then evicting them if they refuse. Although, possibly, neither metaphor works entirely.

Either way, the Epic v Apple battle proceeds at quite some speed and with plenty of drama. Spotify will be delighted. CMU will following it all closely – meanwhile, for a concise summary of the story so far check out this week’s Setlist podcast.