Photo by Mateo Vrbnjak on Unsplash.
Background
Fortnite, released in 2017, has now become one of the world’s largest games with 350 million registered players.[1] Fortnite exploded onto the gaming scene, surpassing renowned giants such as Minecraft. Fortnite is a free battle royale game that combines classic battle gaming with the music industry, featuring in-game social events with big name artists, such as Travis Scott. [2] The game encourages players to purchase a seasonal battle pass and to complete challenges to unlock the next level. This deadly combination of free-to-play, cross-platform, and social incentives has seen players log an estimated 3.2 billion hours in play time in April. Fortnite made $1.8 billion dollars in 2019, making it one of the biggest games in the world and it doesn’t appear to be losing its tight grip on the gaming community.[3] [4] [5]
Fortnite was created by Epic Games [“Epic”], an American video game and software development company. Fortnite had previously been available to download and install for IOS users from the App store until August, where the Fortnite Season 4 update was blocked from being released on IOS on August 27th. Fortnite was removed from Apple and Google platforms for violating long-standing developer guidelines.[6] Fortnite had created a payment processing option in-app thereby violating the app store guidelines that require developers to use the host platform’s payment systems giving Apple and Google a 30% cut of the profits.[7] Apple users cannot download software that has not already been approved by Apple and can only download approved software via the exclusively Apple owned app store.[8] The app store guidelines pertaining to this issue only apply to digital items, allowing companies such as Amazon and Uber to handle payments.[9]
Epic has openly started a #FreeFortnite campaign. Epic Games made their filings for August 13, August 17, August 23 and September 4th available on their website.[10] Epic responded to Apple’s removal of Fortnite from the App Store by filing two separate antitrust lawsuits against both Apple and Google for anticompetitive practices. Epic filed for a preliminary injunction requesting that Apple be prevented from cutting off Fortnite from the developer program.
Antitrust Claims
Epic alleges that Apple maintains an illegal monopoly on app distribution through the app store. This illegal monopoly puts in place a diversity of barriers for those who want to reach the iOS market, thereby smothering innovation.[11] Epic claims that Apple is blocking Fortnite updates and new installs on the App Store, in effect, removing players’ abilities to install and update the game on their IOS devices. Epic claims Apple instructed them to “remove the Epic direct payment feature.” Further, Epic claims that Apple will terminate their ability to develop Fortnite for Apple Devices.
In a statement released on the Epic Games website, Epic claims it is “fighting to end Apple’s anti-competitive restrictions on mobile device marketplaces”: Apple is keeping prices high to collect 30% of payments from users, and blocking Fortnite in order to prevent users incurring saving from direct payments.[12] Apple claims that this is a problem created by Epic, a “self-inflicted wound,” which is easily remedied if Epic were to submit an update of their app that reverts it to comply with agreed-upon guidelines that apply to all developers.[13][14] In order to release an app through the app store, a developer has to agree to Apple’s terms.[15] Apple has responded to the statements put forth by Epic Games: “We won’t make an exception for Epic”.[16]
Current Progress
In September, Apple and Epic went head to head, dissecting the merits of Epic’s antitrust case. Judge Yvonne Gonzales Rogers characterized Epic’s actions as dishonest behaviour:
“You did something, you lied about it by omission, by not being forthcoming. That’s the security issue. That’s the security issue!”[17]
Judge Yvonne Gonzales Rogers refused to grant Epic Games a preliminary injunction against Apple that would force Apple to reinstate Fortnite on the App Store. Judge Gonzales Rogers further granted an injunction restricting Apple from retaliating against the Unreal Engine (a company owned by Epic).[18] This is a permanent version of the temporary restraining order granted earlier in the case. In essence, the current state of affairs remains the same for the length of the trial: Epic cannot publish new games on iOS and cannot distribute Fortnite through the App Store,[19] unless, that is, Epic removes the in-app payment mechanism, although the initiation of the #FreeFortnite campaign seems to make this an unlikely scenario. In a statement from an Epic Games Spokesperson:
“Epic Games is grateful that Apple will continue to be barred from retaliating against Unreal Engine and our game development customers as the litigation continues. We will continue to develop for iOS and Mac under the court’s protection and we will pursue all avenues to end Apple’s anti-competitive behavior”.[20]
Judge Rogers believes that the case will likely go to a jury sometime next summer.[21] This case has become the frontline of third-parties’ relations with tech giants, such as Apple and Google. Epic and Apple’s feud has provided a platform for companies to highlight complaints of unfairness with respect to Apple’s policies. Companies, such as Spotify, Match Group, Tile and Epic, created the Coalition for App Fairness in response to the case, which claims that it will try to “defend the fundamental rights of creators to build apps and to do business directly with their customers”.[22] This case will be a significant precedent in the world of antitrust, and in the words of Epic’s attorney Katherine Forrest:
“When you are taking on the biggest company in the world and you know it’s going to retaliate, you don’t lie down in the street and die”.[23]
Jordan Kazan Baigrie is a 2L student at Osgoode Hall Law School and ESLA’s Co-Director of Sports. She has an avid interest in sports and entertainment law, and litigation. Jordan has spent the last decade working in sports as an athlete, coach and operations manager.
[1] Christina Gough, “Fortnite Player Count 2017-2020”, Statista (3 September 2020), online: https://www.statista.com/statistics/746230/fortnite-players/
[2] Ibid.
[3] Nick Statt, “Fortnite is now one of the biggest games every with 350 million players”, The Verge (6 May 2020), online: https://www.theverge.com/2020/5/6/21249497/fortnite-350-million-registered-players-hours-played-april
[4] Nick Statt, “Fortnite is the biggest game on the plane right now because it’s a living, breathing world”, The Verge (6 May 2018), online: https://www.theverge.com/2018/5/6/17321172/fortnite-epic-games-biggest-game-living-breathing-world-mmo-rpg-battle-royale
[5] Ben Gilbert, “Fortnite made $1.8 billion in 2019, analysts say – that’s down 28% from 2018, but it’s still the biggest game in the world”, Business Insider (2 January 2020), online: https://www.businessinsider.com/how-much-did-fortnite-make-in-2019-2020-1
[6] Samit Sarkar, “Epic Games’ Fortnite Legal Battle with Apple and Google”, Polygon (25 August 2020), online: https://www.polygon.com/2020/8/17/21372119/fortnite-apple-google-sued-epic-games-lawsuit
[7] Sam Byford, “Apple Fires Back at Epic: We Won’t Make an Exception”, The Verge (17 August 2020), online: https://www.theverge.com/2020/8/17/21373108/apple-response-epic-app-store-fortnite-lawsuit
[8] Mikhail Klimentov, “Fortnite Maker Epic Faces Uphill Antitrust Battle with Apple” The Washington Post (27 August 2020), online: https://www.washingtonpost.com/video-games/2020/08/27/fortnite-app-store-epic-apple-lawsuit/
[9] Sam Byford, “Apple Fires Back at Epic: We Won’t Make an Exception”, The Verge (17 August 2020).
[10] Epic Games, News Release, “#FreeFortnite” (10 September 2020), online: https://www.epicgames.com/fortnite/en-US/news/freefortnite
[11] Mikhail Klimentov, “Fortnite Maker Epic Faces Uphill Antitrust Battle with Apple” The Washington Post (27 August 2020).
[12] Sam Byford, “Apple Fires Back at Epic: We Won’t Make an Exception”, The Verge (17 August 2020).
[13] Ibid.
[14] Erin Griffith, “Apple and Epic Games Spar over Returning Fortnite to the App Store”, The New York Times (28 September 2020), online: https://www.nytimes.com/2020/09/28/technology/apple-epic-app-court.html
[15] Samit Sarkar, “Epic Games’ Fortnite Legal Battle with Apple and Google”, Polygon (25 August 2020).
[16] Sam Byford, “Apple Fires Back at Epic: We Won’t Make an Exception”, The Verge (17 August 2020).
[17] Nick Statt and Jay Peters, “Epic Judge Permanently Restrains Apple from Blocking Unreal Engine, but Won’t Force Fortnite”, The Verge (9 October 2020), online: https://www.theverge.com/2020/10/9/21492334/epic-fortnite-apple-lawsuit-restraining-order-unreal-engine
[18] Ibid.
[19] Ibid.
[20] Ibid.
[21] Ibid.
[22] Ibid.
[23] Erin Griffith, “Apple and Epic Games Spar over Returning Fortnite to the App Store”, The New York Times (28 September 2020).