“Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store.”
Apple today filed a counterclaim in its ongoing legal battle with Epic Games, seeking damages for the gaming company's apparent breach of contract. Epic filed a lawsuit against Apple (and Google) after its game Fortnite was removed from the App Store for bypassing Apple's in-app payment system.
"Epic’s lawsuit is nothing more than a basic disagreement over money," Apple said. "Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store." Epic, along with other developers, argues that Apple's fees are too high and its rules make it hard for new ideas to succeed. iOS users cannot download apps outside the App Store, meaning compliance is critical.
Epic's strategy — Epic's battle with Apple began when it released a new version of Fortnite that allowed gamers to purchase in-app items directly through the Epic website, therefore avoiding the 30 percent commission that Apple normally takes on in-app purchases. Apple consequently removed the app from the App Store, and Epic filed its lawsuit. In today's claim of damages, Apple is seeking restitution of money Epic earned bypassing its payment system. Apple is increasingly reliant on services revenue, including App Store fees, for its future growth.
Apple seems to have confirmed suspicions that Epic intentionally orchestrated this fight knowing full well that bypassing the payment system would lead to removal. "Unbeknownst to Apple, Epic had been busy enlisting a legion of lawyers, publicists, and technicians to orchestrate a sneak assault on the App Store," the company wrote. "Shortly after 2:00 a.m. on August 13, 2020, the morning on which Epic would activate its hidden commission-theft functionality, Mr. Sweeney again emailed Apple executives, declaring that ‘Epic will no longer adhere to Apple’s payment processing restrictions.’"
The App Store debate — Others in the developer community have sided with Epic, including Facebook, Microsoft, and Basecamp. The question at the center of the debate is whether or not Apple should have so much say over independent businesses, who are beholden to the company's rules since violating them can mean being locked out of iOS devices entirely — which comprise 50 percent of the U.S. smartphone market. Apple says its rules and fees are intended to foster a safe environment for users. Developers on the other hand say that the company enforces its rules based on its own motivations and priorities, and makes it difficult for new ideas to succeed by blocking ideas it doesn't like or that compete with its own apps. Google has drawn less scrutiny because users can download apps from outside the company's Play Store.
Facebook recently complained after Apple announced that it intends to block third-party apps from tracking users starting in iOS 14, posing a serious threat to billions of dollars in revenue for the social network.
At the same time, major tech companies are under increasing regulatory scrutiny for the power their platforms give them to maintain dominance.