Legal

Judge Tells Apple, Epic Not To Drag 'Bystanders' Into Legal Fight

Epic/Apple’s Courtroom Battle (Round One)

For Apple and Epic's court battle, with the first in-person round over and done with (okay, it was on Zoom, actually), next month will shape up as a September to remember.

The next hearing between the two tech giants is scheduled for September 28, this time centered on the temporary restraining order handed down on Monday night (Aug. 24) by U.S. District Court Judge Yvonne Gonzalez Rogers for the Northern District of California, which said Apple cannot keep Epic from accessing the tools of Unreal Engine, a game engine that can be harnessed to build 3-D games on Apple platforms.

In the balance, though, is the fate of Fortnite – the wildly popular game with 350 million users – which is still blocked from being restored to Apple’s App Store.

Delving into the judge’s temporary ruling, we find that “Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders. Apple has chosen to act severely, and by doing so, has impacted non-parties and a third-party developer ecosystem.”

In the temporary order, the judge found that Epic had not breached any agreements with Apple tied to Unreal Engine. Epic had argued that restricting access to Unreal Engine would cause harm to the company and other developers who use those tools as they create games. During the hearing, Apple admitted that other developers would be affected, per reports from Gizmodo.

But as is germane to Fortnite – where, of course, Epic offered in-app payment processing and was thus in violation of Apple’s own rules (and skirted a 30 percent commission to Apple) – Rogers ruled that “the court finds that with respect to Epic Games’ motion as to its games, including Fortnite, Epic Games has not yet demonstrated irreparable harm. The current predicament appears of its own making.”

Epic, of course, has alleged that Apple’s practices, particularly the commission structure, are anti-competitive. And it has said that it will end its account on the App Store as of the end of this month, while Apple has said that Epic’s Fortnite should be banned from the store as the legal battle continues.

So, at least for now, Fortnite is not available through the App Store, and Unreal Engine is accessible.

Apple has argued that offering a “compliment” version of Fortnite on Apple’s App Store could be a solution.

But, of course, at issue is who pays, and when, and who gets a cut. By arguing that a duplicate version of Fortnite could be on offer, Apple seems to imply that it can keep its commission structure, while Epic could conceivably garner a separate revenue stream. There is also the question of pricing, where the judge asked why the commission fee comes in at 30 percent (it could, after all, be another rate, perhaps 10 percent or 15 percent). With a nod to the commission structure, the recent ruling states that “while the Court anticipates experts will opine that Apple’s 30 percent take is anti-competitive, the Court doubts that an expert would suggest a zero percent alternative. Not even Epic Games gives away its products for free.”

Katherine Forrest, Epic’s lawyer, contended during the Monday hearing that any return to the status quo via the App Store would in effect force consumers to “pay more than they should.”

But the temporary order, which allows Fortnite to be blocked, hints that Epic has not been able to demonstrate irreparable harm. As Rogers noted, the “predicament” is of Epic’s “own making” via a strategic breach of agreements.

Elsewhere in the ruling, Judge Rogers notes that “the battle between Epic Games and Apple has apparently been brewing for some time. It is not clear why now became so urgent.”

In other words, the current situation holds – and waits for the next round of arguments, and for the end of September.

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