CONTRACTS & TECHNOLOGY

Battle Royale between Epic Games and Apple

The very public falling out between tech giants Apple and Epic Games, the games developer and has attracted much attention and has escalated in no time at all to the United States District Court.

Epic uses the App Store to distribute massively popular games such as the free to download Fortnite: Battle Royale and Battlebreakers and the root of the dispute flows from Apple’s standard terms and conditions which prohibit any developer wanting to distribute their product through the App Store from using any payment system other than Apple’s which of course is how Apple collect their standard 30% platform fee on in app purchases.

Epic recently launched an update to Fortnite on the App Store which included a third party in app purchase mechanism which sought to circumvent Apple’s 30% platform fee. Apple immediately responded by terminating Epic’s developer account which it used to publish and update its App Store games on the grounds that it had violated its terms of service. 

Not content with preventing Epic from using its platform, Apple went further and threatened to cut off access to all iOS developer tools of Epic’s Unreal game engine, a much used development tool which enables developers to publish their games on iOS. Removing Epic’s ability to develop and support its Unreal Engine on iOS or macOS would have had a significant impact on game creators and gamers.

In response to Apple’s actions, Epic Games launched a legal complaint in the US District Court for the Northern District of California Oakland Division, stating that Apple was abusing its market power and stifling innovation.

Apple has hit back claiming that this is less a case of market abuse and simply one of Epic not wanting to pay for the tremendous value it gets from being able to distribute its products safely and securely to its users over the Apple platform.

Kevin Gammill, the general manager of gaming developer experiences at Microsoft wrote a letter to the court in support of Epic, noting the harm that Apple’s actions could cause to developers by blocking this “critical technology”.   Spotify also lent their support stating that they “applaud” the stand against Apple’s “abuse” of its leading position. Such interventions are significant and point to the case becoming a proxy war over the very future of the App Store model. 

The Judge it seems recognised this and has confirmed the interim restraining order preventing the blockage of Epic’s Unreal Engine developer licences but the removal of Fortnite from the Apple Store continues. At the court appearance on the 28th September the Judge commented that Epic’s action to circumvent Apple’s payment system was “not honest” indicating she may not be overly sympathetic to Epic’s arguments when the case comes to trial some time next year.

Although using third party tools  provides huge benefits for many developers  this case shows how the unwary  can be impacted by disputes which they have no control over. As with all proxy wars the damage caused can be indiscriminate and unexpected.

If you are a  developer and have any concerns over any current or future use of third party software or tools in the development of your product or indeed the ownership of any software developed for you by third parties and would like to like to discuss any of the issues raised in this article please contact Millar McCall Wylie on 02890 200050 or by email at scott.kennedy@mmwlegal.com or abbie.long@mmwlegal.com.

 

 

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