Apple does not need to return Fortnite to App Store, judge rules

Home / Apple does not need to return Fortnite to App Store, judge rules

SAN FRANCISCO — A federal judge ruled Friday that Apple did not need to reinstate the popular video game Fortnite in its App Store, in a blow to Fortnite’s parent company, Epic Games, which is locked in an antitrust battle with the tech giant over its app store fees and rules.

Judge Yvonne Gonzalez Rogers of the Northern District of California said in her ruling that Apple’s ban of the game could continue because Epic had violated its contract with Apple. There is “significant public interest” in requiring companies to adhere to contracts or resolve disputes through the normal course, she wrote.

But Gonzales Rogers also said that Apple could not ban Unreal Engine, Epic’s developer tools, from its platforms because of the “potential significant damage to both developers and gamers” who rely on the software.

The mixed ruling showed the high cost of taking on a tech behemoth like Apple, even for an established company like Epic. The 116 million people who have accessed Fortnite through Apple’s systems will continue to be kept away while Epic and Apple prepare for a trial in the case, which is scheduled for May.

An Epic spokeswoman said the company “is grateful that Apple will continue to be barred from retaliating against Unreal Engine and our game development customers.” Epic will continue developing for Apple’s platforms and “pursue all avenues to end Apple’s anti-competitive behavior,” she said.

Apple did not immediately respond to a request for comment.

Epic’s battle with Apple comes as the largest tech companies face scrutiny of their power. On Tuesday, House lawmakers said Apple, Amazon, Facebook and Google had exercised and abused their monopoly power to stifle competition and harm consumers and recommended that the companies be restructured. European regulators have also opened an investigation into whether Apple’s app store rules are anticompetitive. And in the coming days, the Justice Department is expected to sue Google over anticompetitive search practices.

At the heart of Epic’s case is Apple’s and Google’s tight grip over smartphone apps in their app stores. Both companies require that developers use their payment systems and pay a 30% cut of any money they make in their apps.

“They think they can just decide arbitrarily what apps can exist, and what fees can be charged, and tax all commerce,” Tim Sweeney, Epic’s chief executive, said in an interview last month. “We came gradually to the realization that we had to fight this, not just by words, but also by really broad actions.”

Epic has said it wants Apple to change its requirements that apps use its payment system and shell out a 30% fee. It also wants to operate its own app store within Apple’s.

The companies began fighting in August, when Epic violated Apple’s and Google’s rules by directing Fortnite users to its own payments service. Apple and Google responded by pulling Fortnite from their app stores. Epic then sued both companies, arguing they were breaking antitrust laws.

Apple later also cut off its support for Unreal Engine, Epic’s software development tool that is used by thousands of game makers. Gonzalez Rogers said Friday that Apple must continue supporting Unreal Engine and could not retaliate against any of Epic’s other affiliated apps or products.

The fight has escalated over the past few weeks. Apple has accused Epic of seeking a special deal for itself, while Epic has accused Apple of cherry-picking out-of-context emails in its legal response.

Other companies have used the battle to criticize Apple. Microsoft filed a declaration in support of Epic and has announced a set of developer-friendly principles for its own app store. Facebook has also recently called out Apple’s 30% app fees.

Smaller app makers, normally wary of angering the tech giants, have found strength in numbers. In September, more than a dozen of them, including the music streaming service Spotify, the dating service Match Group and the Bluetooth tracking device maker Tile, formed a nonprofit group called Coalition for App Fairness to push for changes to the app stores.

In a hearing last month, Apple said it was willing to reinstate Fortnite to its app store before a trial if Epic would return to complying with its rules. Gonzalez Rogers proposed an arrangement that would put Apple’s fees from Fortnite in an escrow account until after the trial. But Epic refused, arguing that doing so would be complying with a contract it views as unlawful.

“I didn’t buy that argument before,” Gonzalez Rogers said in the hearing. “I’m not particularly impressed with it now.”

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