Battle Born Injury Lawyers
Free Consultation 702.570.9000

Breaking Down the Law: Why is 'Fortnite' creator Epic Games suing Apple?

Earlier this month, Epic Games, the company behind the popular video game “Fortnite,” filed suit against Apple.

The lawsuit alleges unfair businesses practices by Apple, including violation of state and Federal anti-trust rules.

As a result of the lawsuit, players of Fortnite are no longer able to update the app or make in-app purchases through apple mobile devices, including iPhones and iPads.

A hearing is scheduled this week on Epic Games’ request for a preliminary injunction against Apple pending the outcome of the lawsuit.

With more than 350 million players, the lawsuit affects many here in Las Vegas. Here to discuss the lawsuit is attorney Matt Hoffmann with Battle Born Injury Lawyers.

Thanks, etc.

  1. What is the lawsuit seeking and what is the basis?
  • What the lawsuit is seeking is a permanent injunction against Apple, preventing them from forcing app developers and consumers to ONLY use the App Store on mobile platforms.
  • They are NOT seeking any monetary damages.
  • They just want the court to declare that Apple’s practices are unlawful to allow fair competition for in-app purchases and payment methods.
  • So the background on this starts with understanding the way Apple treats app developers when it comes to their Mobile platform versus their regular computer platform.
  • For example, if a user downloads the game Fortnite on a Mac computer, they can make in-app purchases directly from Epic Games; and they can pay for those purchases using any payment method available.
  • BUT – if they wish to make an in-app purchase while playing Fortnite on an iPhone or iPad, the user can ONLY make in-app purchases through the App Store; and they can only pay for those purchases through the App Store.
  • The reason this is a big deal is that Apple places a 30% charge – like a tax – on any purchases made through their app store.
  • And THAT is where this lawsuit comes from.
  1. So what happened that led to this filing, and where does it go from here?
  • On August 13th, Epic Games made a change to their Fortnite app, allowing users to make in-app purchases through the App Store or DIRECTLY through Epic Games.
    • So, for example, if a player wanted to buy 1,000 “V-Bucks,” it would cost $9.99 through the App Store, but only $7.99 if bought directly through Epic Gams.
    • This is because Epic Games would not have to pay the 30% tax to Apple for purchases made through their platform.
  • Apple responded by kicking Fortnite off the app store.
    • New users cannot download the app and existing users cannot update their app or make.
  • Now Epic Games is claiming Apple’s control over their App Store amounts to a Monopoly, in violation of State and Federal Anti-Trust laws.
  • Apple’s response is that users are free to use a different device environment, and developers are free to market their games on other platforms if they’re not willing to comply with the App Store rules.
  • Practically speaking, Epic Games has a valid grievance.
  • Apple owns a 100% market-share of their App Store, meaning there is zero competition for users of Apple mobile products when it comes to apps and in-app purchasing.
  • They force developers to pay a 30% fee, which the developers than pass down to the consumer.
  • By contrast, payments made through services like PayPal are only charged a 3% fee.
  • So the lawsuit alleges that Apple’s iOS App for iPhones and iPads violates Federal and State Anti-Trust/Anti-Monopoly laws.
  • It remains to be seen what the outcome will be, but it is an uphill battle for Epic Games.
  • They are alleging Apple has produced a single-brand market, so they must prove that Apple users are “locked in” to the brand, with no realistic alternative to turn to.
  • Apple will just point to other platforms, like Android, saying they don’t own a “monopoly” and instead just control their one brand and its eco-system.
  • What it does mean is those playing Fortnite on iPhones and iPads won’t be able to make in-app purchases or update the app, so they won’t be doing so for long.