Apple to Epic: Nope

From The Verge’s “Apple won’t let Epic bring Fortnite back to South Korea’s App Store” posted early Friday:

Apple says it won’t let Epic Games back in the App Store until they agree to “play by the same rules as everyone else.” Earlier today Epic asked Apple to reinstate its developer account so that it could re-release the iOS version of Fortnite in South Korea, which recently passed a bill forcing Apple and Google to allow alternate in-app payment systems.

Apple, however, maintains it’s under no obligation to let Epic in the App Store at all. “As we’ve said all along, we would welcome Epic’s return to the App Store if they agree to play by the same rules as everyone else,” an Apple spokesperson says in a statement to The Verge. “Epic has admitted to breach of contract and as of now, there’s no legitimate basis for the reinstatement of their developer account.”

My take: Once again, Epic goads Apple into playing the bully.

20 Comments

  1. David Emery said:
    Apple is a ‘bully’ by insisting that Epic play by the same rules as everyone else? My take, “Bovine effluent!” I wonder when we’ll see the Epic v Apple verdict.

    4
    September 10, 2021
  2. Jonny T said:
    Breach of contract is breach of contract. Full stop.

    5
    September 10, 2021
  3. Miguel Ancira said:
    This is entitlement, corporate edition

    2
    September 10, 2021
  4. Apple prevailed on 9 of 10 counts before Judge Gonzalez, hardly a loss. The app store purchase option was already conceded. Today’s market reaction is knee-jerk, tell me who can possibly calculate the cost of Apple losing 1 out of 10 counts ? Walled garden remains. Apple security prevailed.
    (Note: Funded SEPP at $156.50 earlier this week, I can watch this pointless churn in peace.)

    7
    September 10, 2021
  5. David Emery said:
    The decision has been reached in Epic v Apple (NOT GOOD for Apple.) I’m sure PED will post on this.

    0
    September 10, 2021
  6. “Apple won on 9 of 10 counts but was found to engage in anticompetitive conduct under California law, and will be forced to change its App Store policies and loosen its grip over in-app purchases. The injunction will come into effect in December”

    2
    September 10, 2021
  7. “Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” —Judge Rogers.
    Watch Senator Klobuchar change focus to Amazon, Google, or that beekeeper forcing all those markets to buy cases of his honey!

    2
    September 10, 2021
  8. Thomas Larkin said:
    And consider how Judge Gonzalez defined the relevant market. That, and given the prescient concession on Apple’s part on notice of other payment options, the markets reaction seems to me to be knee jerk and overblown. The one count Epic won some relief on, was the one Apple has already conceded on.

    2
    September 10, 2021
  9. Bart Yee said:
    I sent PED the link to this article by Ars Technica which I think was measured and better at explanation. To wit:

    “On Friday, the Northern California judge handling the closely watched Epic Games v. Apple court case turned in a ruling that, in many ways, works out in Apple’s favor—but with one massive, App Store-changing exception.

    The ruling from US District Judge Yvonne Gonzalez Rogers includes a single-page permanent injunction demanding that Apple open up payment options for any software sellers on the App Store. In other words, Epic Games’ effort to add Epic-specific payment links inside the free-to-play game Fortnite, and thus duck out of paying Apple’s 30 percent fee on in-app transactions, can now happen.“

    “ The injunction is aimed at Apple, not Epic, and tells the device and software manufacturer to no longer prevent developers from including their own direct-buy links within their apps. Apple also cannot prevent app-makers from communicating with customers via any method customers opt in to (i.e. an email newsletter) about purchasing options. Apple has 90 days from today, September 10, 2021, until this injunction becomes live and actionable.
    Not an antitrust violation
    The giant 185-page ruling opens by making clear that one of the larger allegations of the lawsuit, that Apple engaged in antitrust behavior, doesn’t quite pass muster. Apple has pointed to this detail in its own statement on the ruling:”

    “Today, the court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law. As the court recognized, “success is not illegal.” Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone.“

    1
    September 10, 2021
    • Bart Yee said:
      The remainder of the article:

      “While Epic Games’ general stance about payment options on the App Store has succeeded, leading to the injunction, Epic itself faces consequences due to the court not finding Apple in breach of contract. In particular, Epic must pay damages to Apple to make up for the 30 percent cut of Fortnite in-app purchases that would have been paid by Epic to Apple in the first place, had Fortnite not instituted its own payment model for three months in 2020. That amount alone is $3.65 million, and the ruling mentions other damages as well.

      Additionally, because Apple’s decision to cut off Epic Games’ developer account within the Apple ecosystem was, according to the ruling, “valid, lawful, and enforceable,” Apple can continue to not let Epic Games return to the App Store as a licensed and approved developer.”

      3
      September 10, 2021
  10. Bart Yee said:
    Link sent to PED RE: Barron’s article

    This article is pretty even and shows Sweeney isn’t all that pleased that he can’t have a third party App Store.

    Apple Stock Falls After Judge Issues a ‘Legal Blow’ Against App Store
    A U.S. District Judge ruled Friday that Apple must allow developers to offer alternative payment systems in software sold through the company’s App Store. The decision in Apple’s high-profile legal battle with Fortnite maker Epic Games deals a blow to the lucrative App Store marketplace. Judge Yvonne Gonzalez Rogers of the Northern District of California issued a permanent injunction that would force Apple to allow developers the option to include links to alternative payment methods in their apps

    https://apple.news/AB5pU0fxBRLaiktNc_JTFVw

    0
    September 10, 2021
    • Bart Yee said:
      Epic Games CEO Tim Sweeney, who has been a vocal opponent of Apple’s App Store restrictions, said on Twitter that the decision is not a win for developers or consumers, partly because the ruling calls for links to alternative payment systems but not in-app payments on par with what Apple offers.

      “Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers,” he said. “Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.”

      Apple said earlier this month that it would allow certain apps to offer such links, but that change excluded games.

      My take: sure, Epic will pass along the saving to consumers. I’ll believe that when I see it. Epic will keep as much as they can get away with. Personally, I hope Apple keeps Epic out of the App Store for a long time.

      2
      September 10, 2021
      • Bart Yee said:
        Separately, game developer stocks are jumping as the ruling alters who gets to collect more fees from apps.

        IMO, while Apple will lose out collectively on fees from thousands of apps in the App Store, individual companies, even with multiple (tens or hundreds of apps) app revenue streams will only reap more income IF consumers CHOOSE to use alternate payment systems OUTSIDE of Apple. Those amounts may be substantial but much less than all the fees Apple has collected up to now.

        I’m a realist that it will be some users, but I also believe more than half of consumers will still choose less friction through Apple payment systems instead, especially if they must share credit or debit card information with alternative payment systems.

        Meanwhile, Apple has already insulated itself from this slight dip in App Store revenues though wider growth in other Services revenue streams, namely multiple subscriptions offerings and rebounds in AppleCare+ From hardware sales. And since the ruling does not go in effect till mid-December, Q1 services revenue will only be slightly affected. Q2 services revenue IMO will be flat to a touch lower for one quarter as the effects ripple through, then resume their growth trend.

        Barron’s article on game stocks:
        https://apple.news/AO72iPBeNQ1ugVk4ww3E2Kw

        2
        September 10, 2021
        • Spot on, Bart! This decision also puts a judicial speed bump in Senator Klobuchar’s path towards Apple’s till. Stock buybacks suddenly the rage on Capitol Hill. So many monopolists, so little time.

          1
          September 10, 2021

Leave a Reply