Epic Games vs Apple – Who won?

Great Question. Epic Games, maker of the smash hit game Fortnite has sent Apple into court in more jurisdictions than we’ve had days in lockdown here in Australia. Well not really, but they certainly haven’t held back after Apple kicked them out of the App Store for breaching the App Store conditions.

Put simply (and I mean, this is all really dramatically oversimplified by a non legal trained nerd mind) – Epic changed Fortnite on iOS to allow people to use a Credit Card to buy V-Bucks (the completely digital currency that has zero impact on your ability within the game). That change is in breach of Apple’s rules which basically state that developers must use Apple’s “in app purchasing” system.

Of course, Epic’s problem with in-app purchases is that Apple clips the ticket – and they have a big clipper, 30% – and they want that reduced or abolished.

Presenting to Judge Yvonne Gonzalez Rogers of the Unites States District Court in the Northern District of California over many many days, both Apple and Epic set their case over 10 main items.

In answer to the question “Who Won?” in the legal fight between Epic and Apple – the answer is – Mainly Apple.

Much of the reporting early on seemed to indicate a “loss” by Apple, which would change the face of the App Store and in-app purchasing. I don’t see it that way.

In reading a chunk of the 186 page judgement, a few things stood out to me. Notably, the Judge’s statement regarding Apple that “Success is not Illegal”

Apple’s Senior Vice President and General Counsel Kate Adams used that line in her response to the ruling today, telling EFTM “We are very pleased with the Court’s ruling and we consider this a huge win for Apple. This decision validates that Apple’s “success is not illegal,” as the judge said. As the Court found “both Apple and third-party developers like Epic Games have symbiotically benefited from the ever-increasing innovation and growth in the iOS ecosystem.”

The Court has confirmed, after reviewing evidence from a 16-day trial, that Apple is not a monopolist in any relevant market and that its agreements with app developers are legal under the antitrust laws. Let me repeat that: The Court found that Apple is not a monopolist under “either federal or state antitrust laws.”  

It is clear the court agreed that Apple was within their rights to terminate the developer account of Epic Games, in fact awarding a few million dollars in damages to Apple for the 30% share of the revenue Epic made while their “backdoor” payment system was active on the iOS platform.

Kate Adams concluded by saying “In short, this is a resounding victory and underscores the merit of our business both as an economic and competitive engine. “

So it could be seen as a big win to Apple.

Even Epic’s CEO Tim Sweeney described the judgement as a loss, tweeting:

We will know if Epic can claim any win at all, if in 90 days Apple’s changes see Fortnite back in the App Store. Sweeney said “Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.”

All that relates to the one finding that does require Apple to make some adjustments to their App Store practices.

The ruling states that Apple is not allowed to “prohibit developers to include in their Apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to IAP.“

Additionally, Apple may not prohibit developers from “Communicating with customers through points of contact obtained voluntarily from customers through account registration within the
app.“

This does not (by my reading) mean that a developer can whack a PayPal or Credit Card button into an app. But, it might mean the developers are able to put an alternative “button” within their apps which will take users out of the app to a website to make a payment.

That may be a win for smaller developers, but in reality Epic already has these options for purchasing outside the App Store on other consoles.

Apple has 90 days to work out what all that means, and how they will react.

The reason Epic see this as a loss is primarily due to the fact that most consumers will click the in-app options 9 times out of 10 just because it’s easier, frictionless and secure to use an in-app purchase.

And isn’t that the whole argument here? Apple created a system that makes it easy and safe for people to spend spend spend, Epic get to use that. But they have to do so while playing by Apple’s rules – funny that.

In my mind, this is a win for Apple.