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Epic Tells Court Its Apple Case 'Had To Be A Big Fight' [Update: Unreal Protected, But Not Fortnite]

Some characters from Epic’s game Fortnite.
Some characters from Epic’s game Fortnite.
Screenshot: Epic Games

We’re still waiting on a written decision from today’s court hearing between Apple and Epic, which was to determine whether to grant Epic’s temporary restraining order restoring Fortnite to the App Store and stopping Apple from removing developers’ access to Unreal Engine tools. [Update: we’ve got a temporary decision].

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Update 1:08am, August 25: U.S. District Judge Yvonne Gonzalez Rogers has issued a temporary verdict on two of the case’s most pending issues. She denied Epic’s request to have Fortnite reinstated but, as Bloomberg report, “granted the company’s request for a temporary order blocking Apple from limiting the game developer’s ability to provide Unreal Engine, key graphics technology, for other apps”.

In her decision, Judge Gonzalez Rogers noted that there is “potential significant damage to both the Unreal Engine platform itself, and to the gaming industry generally, including on both third-party developers and gamers” faced by Apple’s actions against Unreal, a point that was debated in yesterday’s hearing. Elsewhere in the decision, she wrote, “Apple is hard-pressed to dispute that even if Epic Games succeeded on the merits, it could be too late to save all the projects by third-party developers relying on the engine that were shelved while support was unavailable....Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem.”

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In regards to Fortnite and other games, however, similar harm could not be clearly demonstrated. The decision reads

Fortnite players are passionate supporters of the game, and eagerly anticipate its return to the iOS platform. The Court further recognizes that during these coronavirus pandemic (COVID-19) times, virtual escapes may assist in connecting people and providing a space that is otherwise unavailable. However, the showing is not sufficient to conclude that these considerations outweigh the general public interest in requiring private parties to adhere to their contractual agreements or in resolving business disputes through normal, albeit expedited, proceedings.

The judge also wrote, “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.” The likelihood of Epic ultimately prevailing was one of the factors in determining whether or not to grant the temporary restraining order.

The “temporary restraining order is effective immediately and will remain in force until the Court issues an order on the motion for preliminary injunction,” the hearing for which is set for September 28.

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Original story follows.

As the court proceedings further drove home, there’s a lot to fight over in this case.

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Watching the proceedings today over Zoom, the hearing seemed to veer wildly in both parties’ favors. Judge Yvonne Gonzalez Rogers said that there “appears to be some level of anti-competition” in Apple’s practices, and that Apple has “overreach[ed]” in going after Unreal Engine. At the same time, she noted Epic doesn’t have “clean hands” in terms of purposefully breaching its contract with Apple, a situation it could easily rectify. But, as CNN’s Brian Fung quotes, Epic “understood that in order to have this fight with Apple, it had to be a big fight,” one that compelled the company to knowingly and flagrantly break Apple’s rules.

I am inclined not to grant relief with respect to the games, but I am inclined to grant relief with respect to the Unreal Engine,” Judge Gonzalez Rogers said. She ended the hearing by promising a written decision “quickly.”

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Epic and Apple met in court via Zoom, to determine whether Apple must return Fortnite to the App Store and not remove access to developers’ Unreal Engine accounts prior to a trial. Judge Gonzalez Rogers considered Fortnite and related Epic games as separate from Unreal Engine in weighing her forthcoming decision, and pondered factors such as the public interest, “irreparable harm” to Epic’s games and to Unreal developers, and the likelihood of Epic succeeding in its case. (She also took absolutely no shit and I love her.)

Lawyers’ arguments touched on many of the points Epic and Apple have already raised in their court filings. The fact that Epic knowingly broke the rules is not in dispute by either side, and even the judge acknowledged Epic created the situation it currently finds itself in. Epic’s lawyers admitted this is true, but continued to insist that Epic “should not be requited to comply with [Apple’s] anti-competitive” practices.

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Epic’s lawyers discussed the harm that has already come to Epic from Apple’s decision, including players filing customer complaints and the possibility that they’ll leave the game if they can’t play with their friends when the new season launches on Thursday. Interestingly, one of Epic’s lawyers repeatedly called Fortnite a “social environment” more than a game, noting that such a space is particularly important these days as one where people gather together to play Fortnite, but also to watch movies and attend concerts. This view of Fortnite as a social space more than a game echoes past statements by Epic figures like CEO Tim Sweeney and creative director Donald Mustard, both of whom have been open about their desires to turn Fortnite into a “metaverse.” In court, this idea was deployed as evidence of how Apple’s actions are harming more than just Epic itself, a feeling Epic has been happy to stoke in-game and on social media. To me, while there’s something “think of the children” about all this, portraying Apple not just as a monopoly but as the big bad taking away your kids’ favorite game is an excellent tactic for winning public support. Apple looks heartless and intransigent the more it digs its heels in, and while public perception won’t determine the outcome of this case, it will certainly play a role in how both Epic and Apple fare in the aftermath.

Apple argued, as it has in its papers, that Epic knew what it was doing and that it doesn’t require court intervention for a situation it knowingly caused itself. Epic could solve this problem right now, Apple has argued, by simply removing its payment system. The seemingly deceptive nature by which Epic snuck its new payment system into the game via a hotfix came up several times in the hearing; in its papers, Apple’s lawyers referred to this as Epic’s “‘hotfix’ that turned into its hot mess.” In a previous briefing, Epic explained how the payment method got in the game:

Epic submitted Fortnite Version 13.40 to Apple for a pre-launch review on August 3, 2020, and it was launched to iOS users shortly thereafter. Version 13.40 integrated functionality that allowed it to support multiple payment options alongside IAP [Apple’s payment system]. When users sought to make a purchase, the app queried Epic’s servers as to which payment processors were available. If the server indicated only one processor, then the user would see that one option and continue with the purchase using that option. If the server indicated that more than one option was available, the user would be presented with a screen asking the user to select the desired payment processor.

On the morning of August 13, 2020, Epic’s servers began informing the Fortnite iOS app that an Epic direct payment option was available along with Apple’s IAP. Because Epic’s direct payment does not carry the 30% “app tax” that Apple imposes on transactions with IAP, Epic could offer reduced pricing to users that chose Epic direct payment.

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Patch 13.40 was, notably, the one that introduced long-awaited cars to the game. With this context, its delay seems to me much more purposeful and intriguing than the inevitable development problems that plague Fortnite updates. Apple’s lawyers don’t see it this way, of course, with one pointing out that this move compromises the “safety” from malware and malicious code that Apple promises its customers and that its App Store policies are meant to protect.

Apple’s lawyers also took a different view of Fortnite’s playerbase, claiming Epic is holding Apple customers “hostage,” a read I don’t disagree with. However, Apple’s lawyers did admit that removing access to Unreal could potentially harm developers, which Judge Gonzalez Rogers said was an “overreach” of Apple’s powers. Apple’s lawyers defended the decision, as they have in their legal filings, by noting that Unreal developer accounts are related to Epic’s, and that in the past Apple has removed accounts connected to those that break the rules. One of Apple’s lawyers pointed out that Tim Sweeney has been clear about his desire to fight Apple and that Apple hadn’t “picked” nor “wanted” this current fight, portraying the company as simply following its own clearly-established rules. This is certainly true—everyone involved in this mess knew what they’d agreed to and knew what would happen if they stopped agreeing, as they now have.

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But while the specifics matter the most to Fortnite players, as they’ll play a large part in whether or not Fortnite can come back to the App Store before the new season, they’re not the battle either side is ultimately fighting. All parties in today’s hearing acknowledged that the question at the heart of this case—whether Apple is engaging in anti-trust practices by forcing games and other apps on its platform to go through the App Store and use Apple’s payment methods—is a complicated one that won’t be solved by court proceedings about who broke what rules and who gets penalized. “This is not something that is a slam dunk for Apple or for Epic,” Judge Gonzalez Rogers said of the eventual case. In the meantime, we’re still waiting to see what the judge will rule.

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Hyperbolic Idiot Chamber

Is there some way they can both lose?