This seems like the predictable outcome. Epic knew Fortnite would get banned when they started this; Apple is innocent until proven guilty, so no court will force Apple to reinstate Fortnite unless Epic wins its antitrust suit. But similarly, Apple's subsequent, second threat to ban Epic from doing other lines of business via macOS tools (e.g. Unreal Engine development) seemed excessive compared to other app bans, and seemed clearly an attempt to use their power to shake down Unreal customers as retaliation for the dispute.
I'm not surprised that Epic started this: they want their game store on iOS, and the only way that happens is via an antitrust lawsuit — and you can't bring an antitrust lawsuit unless you show evidence of harm (aka, lost Fortnite sales). Epic wanted Fortnite to be banned so that they could sue Apple.
I'm curious why Apple escalated, though. It seemed to me like they were playing into Epic's hand: they're currently under multiple antitrust investigations by the US and the EU, and using their market power on iOS to corral developers on macOS seems like a pretty obvious violation, and a novel one: when they banned XCloud from iOS, for example, they didn't also ban MS Office from running on Macs. Why would they try to do it now? When I first saw it I wondered if Apple knew something we didn't (since Epic would pretty obviously attempt to contest this in court), and that Apple was playing its own 4D chess game against Epic, secure in the knowledge that the court wouldn't grant the injunction on the macOS tools. But... Now it just looks like a fit of pique? Apple had already banned Fortnite when it issued the second threat to ban Unreal; the second threat ended with them getting nothing (the court prevented them from following through) and left looking like monopolists during the antitrust investigations. I don't get it.
I think they just went through applying the agreement, which says that the account will be terminated in the specific case of willingful infringement/circumvention. If they had not tried to apply it, it would have been hard to prove to the judge that they always apply the agreement to the letter, which is an important part of this lawsuit (they need to prove that the rules are clear and equally enforced — something that they know it’s not always happened).
Since Epic has 2 different accounts, Apple could have terminated only one of them, leaving Unreal Engine intact. But Schiller’s declaration says that in these cases they have always terminated all accounts that are owned by the same company / conglomerate (I can easily see this is useful in some cases). So again I feel they were in a corner: they had to follow what they have always done, so that other companies couldn’t prove a ad-hoc enforcement of rules (termination rules, in this case).
You would think so, but actually a company can't sue another for antitrust violations unless they show evidence that they were injured — and the injury has to pass a two-prong test [1] to be covered.
That being said, the government can investigate without a lawsuit. But just because the government investigates, that doesn't guarantee the government will prosecute; a lawsuit guarantees prosecution, unless it's so baseless it gets thrown out by the court (which Epic's hasn't been).
Hence why Epic took a step that would obviously result in a ban: they needed the correct type of evidence of injury in order to sue.
They showed that Apple forcing iOS apps to use their Payment Processor is bad for consumers by providing an alternative that is 20% cheaper. Which is what got them banned.
So why can't Epic (or any other company) provide you that option with a 42% premium (to cover Apple's 30% cut) and allow users to buy direct from them? Then if you wish to trust Apple more with your card details, you can pay more for the privelege. Or you can save some money, but potentially increase your risk by going direct.
I've always hated that Apple seem to think they know better than anyone else; you can't do as you wish on their platforms because you might be stupid.
I mean, that’s exactly why I have an Apple device.
No, wait, not that I’m stupid. Though I’m sure some people would call me that.
It’s that they make the decisions for me. I’m specifically paying a premium to delegate the responsibility for making those decisions to them.
I spent years running Nexus devices (since before they were Nexus... still have my ADP1 in a drawer) on Cyanogenmod and LineageOS. At some point I got busy and didn’t have time for my phone to be a hobby or even a thing I had to think about and chose to delegate those decisions to Apple rather than Google because they generally seem to lean more toward privacy-conscious decisions and making money on hardware and apps rather than decisions to support violating my privacy and making money on advertising.
I already paid more for what I agree is a privilege by buying an expensive Apple phone. If you don’t like the rules, then don’t sell here. I’m cool with that. Leave my walled garden alone. I’m comfortable in here.
Of course a competing App Store can offer lower prices, they don't bear any of the costs for developing and managing the iOS ecosystem Apple spent billions over a decade building (that many other companies lost fortunes failing to compete against). They can just popup a virtual store in someone else's successful established platform and access a market of 1B+ credit cards they had no hand in creating where they can dictate their own margins for selling virtual goods - somehow feeling entitled to get a free ride on the massive development & maintenance infrastructure costs that is subsidized by the App Store.
Strange most other markets don't just let everyone to sell their products (physical or virtual) on their markets at no cost [1].
Apple profits handsomely from the iOS ecosystem every time someone buys an iPhone to access it, or buys a Mac because Apple won't allow building iOS apps without one, or pays the annual developer program fee. They don't need to triple or quadruple dip to be the most valuable publicly traded company in the world.
Apple here is no different than the Telcos wanting to avoid only being paid for just being dumb pipes.
If everybody else is making money building on that basic service they want a piece of that pie too.
iOS is a major cost to develop that's given away for free, continually invested in, advanced, developed & updated. Apple is allowed to have more than one business model on the platform they built, which was their primary focus that reshaped the company at a great opportunity cost to their other businesses. Ultimately the Company bet paid off & became successful against a number of incumbents who lost fortunes trying to compete in Mobile OS's. The App Store is now one of their major sources of revenue for having built a successful platform (a category they helped pioneer).
The nominal annual fee is a cost for accessing the dev tools only, it's in no way a royalty-free cost to sell products on one of the most lucrative markets in the world - that's what their standard royalty % (unchanged from the outset) covers.
I think the point is that competition will prevent them from doing that. And it worked: in response to Epic's lower rates, Steam also cut their rates. If Epic raises the rate to 30% they'll be more expensive than Steam, and won't be able to compete.
They lowered prices as part of a calculated stunt. If Apple is suddenly turning over 20% of the purchase price to devs, why would the devs lower the price when they're getting an extra 20% at the same price point?
This is the correct take. Generally speaking, the prices set by Epic before this stunt likely approximated the highest price which didn't reduce aggregate spending.
Banning the unreal dev account makes sense when you take it as setting/following precedent of removing access to the legal entity responsible for the breach of contract?
It also follows that Apple could claim that Epic used this unreal dev tooling to break the contract and thus the tooling is "illegal" and subsequently must bear the consequences as well.
I don't think there's anything overtly malicious to the unreal part save for usual corporate lawyering of go big and then back off rather than not reaching far enough and losing.
The Unreal account was a separate dev account held by a different legal entity: "Epic Games, Inc." (Fortnite) vs "Epic Games International, S.a.r.l." (Unreal). (Props to @scq who noticed this elsewhere in the discussion.)
It's somewhat unusual for corporate lawyering to go big like this against a well-funded opponent. Apple didn't actually have the legal standing to do it — as evidenced by the court issuing the emergency injunction so quickly — and now there's precedent on the books that this kind of threat won't be enforceable against others. Usually, sadly, corporate lawyering tactics are to go nuclear against someone who can't afford to fight you, and tread more carefully when someone can — lest the court take away your nuclear weapons when the big player lawyers back.
I agree that seemed to be the predictable outcome. But then I cannot understand what was Apple trying to do. What is their strategy here, why be so agressive toward Epic's Unreal Engine? It feels as if they wanted to be proven wrong, but I don't understand why they would do this. If someone has some insights to share, I would be interested.
> This is a quote from the letter that Apple sent to Epic;
>> If your membership is terminated, you may no longer submit apps to the App Store, and your apps still available for distribution will be removed. You will also lose access to the following programs, technologies, and capabilities:"
>> [...]
>> - Engineering efforts to improve hardware and software performance of Unreal Engine on Mac and iOS hardware; optimize Unreal Engine on the Mac for creative workflows, virtual sets and their CI/Build Systems; and adoption and support of ARKit features and future VR features into Unreal Engine by their XR team
> That is a statement that Apple made saying they will stop all help they give to Epic getting UE running on all Apple hardware. With the other stuff in the letter it makes it very clear that the problem is not just one for Epic Games, but all of Epic.
What they're calling out is that Apple engineers will no longer prioritise improving the performance of Unreal on macOS and iOS. This is kinda outside the developer agreeement.
What is the text in the agreement that blocks developers from building against it though?
If a third party developer uses an open source library instead of Unreal, must that library belong to an entity that signed an agreement with Apple or the whole app is banned by default?
> ban Epic from doing other lines of business via macOS tools (e.g. Unreal Engine development) seemed excessive compared to other app bans
No, if you try to smuggle forbidden features through the approval process by hiding them and only enabling them after the app is published your developer account will be terminated immediately. This is clearly documented and Epic knew this up front.
Getting the chance to revert the changes before the account is terminated is what sets apart Epic from most other developers, like people that changed their apps to full emulators after it got approved like what looked like a single game.
"...On Thursday, August 13, 2020, Epic Games made the calculated decision to breach its
allegedly illegal agreements with Apple by activating allegedly hidden code in Fortnite allowing
Epic Games to collect IAPs directly. In response, Apple removed Fortnite from the App Store,
where it remains unavailable to the date of this Order. Later that same day, Epic Games filed this
action and began a pre-planned, and blistering, marketing campaign against Apple... "
"...The Court finds that with respect to Epic Games’ motion as to its games, including
Fortnite, Epic Games has not yet demonstrated irreparable harm. The current predicament appears
of its own making... Epic Games admits that the
technology exists to “fix” the problem easily by deactivating the “hotfix.” That Epic Games
would prefer not to litigate in that context does not mean that “irreparable harm” exists..."
"...Epic Games
moves this Court to allow it to access Apple’s platform for free while it makes money on each
purchase made on the same platform. 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. Not even Epic Games gives away its products for free..."
Ouch.
Separately, the aspect of Apple pulling keys for the developer (e.g. Unreal Engine) platform access was granted a preliminary injunction. Which seems reasonable.
I guess Epic has a couple days to decide whether to give in or not: "Fortnite’s next season starts on Thursday, August 27, 2020, and will require an update
of the game to play."
"with respect to the Unreal Engine and the developer tools, [...] the contracts related to those applications were not breached. Apple does not persuade that it will be harmed [...] Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem. In this regard, the equities do weigh against Apple.
Apple's behavior here was not reasonable and definitely deserved this restraining order.
Epic could have used the same developer account for both Unreal Engine and Fornite development knowing full well that Apple would have to either allow both or ban both.
They had ads and lawsuits ready when they pulled the trigger on this chain of events so it wouldn't surprise me if they made sure that the Unreal Engine issue was included.
They didn't use the same developer account, if I'm reading the order correctly the developer accounts used for Unreal Engine and Fortnite did not even belong to the same legal entity.
* Epic Games, Inc. develops Fortnite and has an Apple developer account that it is released under.
* Epic Games International, S.a.r.l. develops Unreal Engine and holds its own Apple developer account.
Apple can ban just Fortnite (and any other infringing app) a la carte, without banning the entire account, so they wouldn't need to ban or allow both in the first place.
"...Epic Games moves this Court to allow it to access Apple’s platform for free while it makes money on each purchase made on the same platform. 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. Not even Epic Games gives away its products for free..."
Apple is arguing as if accessing their platform for free was a crime. This makes sense, since they have costs associated with reviews, code signing and distribution. But that is of their own making. Walled gardens should be outlawed.
It being a walled garden is the only way I’m willing to trust it for accessing all my account recovery emails, my 2FA SMSes, my bank details, and the sensor package that can listen to everything I do while GPS tracking me and monitoring my heart rate and gaze if I happen to be holding it where I can see the screen.
Of course, that doesn’t mean I like being stuck with an American cultural hegemony that says sexual content is forbidden, or that needs an encryption export licence from the USA government for apps written by non-Americans for non-Americans, and which still demands annual reporting to the US government for using https.
I’m happy with any walls that meet basic security standards, but I do want a wall, even if it would be nice to choose which wall.
The walled garden is not what protects your email, 2FA SMSes or bank details. The OS sandboxing and permissions system do that. The two are often conflated, but the two concerns are orthogonal really.
Heck, you could easily imagine a system where software distributed outside the app store can only access a subset of perms if security is such a concern, and that'd still be less anti-competitive
Due to the way iOS works (dynamic dispatch) private APIs can only be prevented through an App Store review process.
And many of those APIs can be used to extract enough information to fingerprint the device, determine your location or steal your data e.g. accessing the list of WiFi networks or browser history.
> Due to the way iOS works (dynamic dispatch) private APIs can only be prevented through an App Store review process.
That's complete nonsense.
Dynamic dispatch has nothing to do with the ability or not of a program to access API. Dynamic dispatch is the selection at runtime of the correct version of a polymorphic function. Obviously, you can sandbox programs written in languages using dynamic dispatch.
You could easily argue that Apple has built an OS that is deeply broken and insecure if they aren't able to technically enforce permissions of apps to do certain things. Virtually any other OS has that capability.
They can't be prevented reliably even through the App Store process - that's simply impossible.
The point of a private API not security, it's to distinguish between the public interface that is meant to be stable and implementation details that might change.
They might do some rudimentary checks to catch obvious usage of private APIs, but it's not part of the security model and still apps show up on the App Store that use private APIs, all the time.
Heck, you could easily imagine a system where software distributed outside the app store can only access a subset of perms if security is such a concern, and that'd still be less anti-competitive
I think this system is called the world wide web.
Apple would have a much stronger case if mobile safari were a first class PWA platform, instead of being almost useless for PWA's. Then the choice would be: make a PWA and live in the browser sandbox, or go through approval and be on the app store.
Your stance seems nonsensical to me, given the fact that Epic was clearly able to sneak something that violates the rules past Apple's review process.
It's clearly not possible for Apple to actually check all functionality of every app, particularly as it's so easy to hide it or to put it in an embedded web view.
In this case, Epic managed to put an alternative payment method in - but they are a trusted brand, so there's no real security issue overall.
But could some other developer do the same thing and harvest payment details? Of course.
> It being a walled garden is the only way I’m willing to trust it for accessing all my account recovery emails, my 2FA SMSes, my bank details, and the sensor package that can listen to everything I do while GPS tracking me and monitoring my heart rate and gaze if I happen to be holding it where I can see the screen.
Sorry I'm not following. What does any of this have to do with the app store?
The problem here is that the majority of discussion around this conflates the iPhone with the App Store. The App Store is a platform, it's fine if Apple wants to charge for curation, distribution, etc.
The iPhone is a hardware device, not a platform, and it's not fine if Apple wants to be the sole guardian of it. Even the court response here conflated the two. Epic doesn't want to be on the App Store for free (that wouldn't be fair), but it does want to be allowed to install its software on iPhones for free (that is fair).
> Not even Epic Games gives away its products for free...
Do... do they not?
The point being made in that paragraph seems valid regardless, but that's a strange comparison to end with - is Fortnite not free-to-play on Apple devices? It certainly is on all other platforms I've seen it on.
"the Court observes that Epic Games strategically chose to breach its agreements with Apple which changed the status quo"
"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."
"Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders."
I'm pretty sure this is the outcome Epic was expecting.My impression is that they don't want their stunts to affect the developers using Unreal Engine, but they're OK with Fortnite being off the App Store if they can win a concession for things like a smaller cut or even getting their EGS onto iOS.
Ooph. I'm betting that Epic was expecting to get to stay on the app store during the trial. That's an expensive difference. I would guess that Epic will retract its change and ask to be relisted on the app store (and if that doesn't happen, seek rapid redress in the court, since this TRO decision explicitly lists Epic's ability to be reinstated as a rationale for why there is no risk of irrevocable harm).
I'd take that bet. I think Epic (Tim Sweeney, really) was prepared to lose that revenue to win the war.
This ruling is what I expected and seems quite reasonable. Epic doesn't get temporary special privileges to break App Store rules (even though they are alleged to be illegal), but also Apple can't retaliate against them in other areas.
If Epic does reverse the payment changes in an attempt to return Fortnite to the App Store until the lawsuit is resolved, I doubt Apple will let them back in unless forced by the court (despite Tim Cook's "Sir, we do not retaliate or bully people").
People seem to act like this is the first App Store dispute.
There have been many over the last decade and Apple's behaviour has been consistent i.e. they will simply allow Epic to come back onto the store and pretend like nothing ever happened. Exactly like we saw recently with the Hey app.
Apple doesn't want to punish developers but they will play hard ball if they don't abide by the rules.
> This appears to be the first dispute where Apple aggressively retaliated in unrelated areas of business.
But it's also the first publish dispute where someone purposely put in code to activate alternative payment options and broke the rules. Apple is setting an example of epic. Don't break the rules.
I don’t think Epic is making that much money from Fortnite on iOS to actually care, I think they are using Apple because a) its an easy target and if they win the ruling can be expanded to other platforms too where they currently make the most money on and b) while they aren’t a major source of revenue now Epic probably has bigger plans for mobile centric games down the line.
Basically now it’s the best time for them to do it, Apple is a huge target and they can gain industry support, Fortnite is big enough that even the average judge, jurist and jury member is likely aware of it and right now they stand to lose very little financially from not being on iOS while the potential future gains are insane.
It's possible that revenue has fallen off, but it appears that Fortnite Mobile revenue has been at least $500 million per year. If this trial goes on for two years, that's potentially a billion dollars in lost revenue. https://sensortower.com/blog/fortnite-mobile-revenue-1-billi...
Epic makes over $5B/year — and more than $680 million of that is from the Epic Game Store [1], which has always been banned from iOS due to Apple's policies against alternative stores. Fortnite Mobile makes them good money, but it's not their cash cow — and if they can trade a temporary ban on Fortnite for their store running on iOS, it seems like they'll take it.
Those estimates are utterly out of touch with reality to the point of being a straight fabrication.
Fortnite brought Epic £1.8b in revenue for 2019, there is no way that 25% of that came from iOS based on actual player data and experience, if their iOS revenue is 10% of the total I will be in shock.
The US is disproportionately iOS compared to the entire world, and especially US teens (I've seen estimates of something like 90%). iOS, the US, and US teens are all disproportionately important to digital sales. Although the US is 10% of TikTok's user base, it provides 50% of TikTok's revenue, nd from Charli D'Amelio on down the most-followed TikTok accounts are almost entirely American. That's why everyone expects TikTok's US (and possibly global) operations to be soon sold; the US is the tail that wags the dog.
US is the majority of revenue sure, but there is no way that so much comes from iOS the cross platform play numbers don’t back this up you can’t just extrapolate from hypothetical app download figures.
The US is about 80% of Fortnite’s but the majority of the players are on consoles not mobile. The 80% figure will change drastically when China grants epic permission to monetize the game as the vast majority of their players are in China.
Assuming they introduce the epic store and cut fees from 30% to 0% fees. It would take 6 years to pay the lost revenue back. It's entirely possible that the next hot thing will come out in 6 years and replace Fortnite.
> I don’t think Epic is making that much money from Fortnite on iOS to actually care
IIRC they said 11% during the hearing, I don't remember if that was 11% of Fortnite revenue or total revenue, and I don't remember if that might have included android as well.
This makes more sense and closer to the figure i kinda pulled out of thin air just based on the size of the playerbase, the 500M> figure was way too much considering that Fortnite only generates about 1.8b a year and it's revenue is going down.
Android is likely a much much smaller to the point of being a rounding error for Epic right now, there aren't many devices that can play the game right and in the markets that they actually get revenue from they aren't that popular.
I don't think Epic has any other games on the App Store tbh, and they probably didn't include licensing revenue.
I don't think that would have changed anything. The court still wouldn't have granted Epic special permission to break App Store rules before the lawsuit is resolved. Epic isn't in a worse position for trying it. Unless Apple refuses to let them back in after reversing the payment changes, in retaliation for filing a lawsuit. In which case I think the court should intervene.
Does anyone find this whole situation very anti-consumer?
Two billion dollar tech companies have started a slap fight, both have claimed its for the benefit of their customers/users but in reality its about their own personal bottom line.
The gaming forums filling up with pre-teen twits willing to cheer lead for their respective megacorp is thoroughly depressing to look at.
..."What was striking about all of these apps is that only three of them functioned primarily on an iPhone; in the vast majority of cases Apple was demanding in-app purchase offerings for functionality that was largely not dependent on an iPhone:"
Not sure if somebody did that bet. So I just put it here. I think the best outcome could be when Apple be forced to allow bigger number of devices under TestFlight - which is the way to install apps not from AppStore. Apple would probably charge extra for that like $1 per device. No virtual goods outside of apple payment system, same 30%.
TL;DR: Apple is prevented from revoking Epic’s developer credentials, as they have threatened to do, at least until this plays out in court. Fortnite is still off the App Store for the duration. A schedule is outline for next steps in the legal case.
I'm not surprised that Epic started this: they want their game store on iOS, and the only way that happens is via an antitrust lawsuit — and you can't bring an antitrust lawsuit unless you show evidence of harm (aka, lost Fortnite sales). Epic wanted Fortnite to be banned so that they could sue Apple.
I'm curious why Apple escalated, though. It seemed to me like they were playing into Epic's hand: they're currently under multiple antitrust investigations by the US and the EU, and using their market power on iOS to corral developers on macOS seems like a pretty obvious violation, and a novel one: when they banned XCloud from iOS, for example, they didn't also ban MS Office from running on Macs. Why would they try to do it now? When I first saw it I wondered if Apple knew something we didn't (since Epic would pretty obviously attempt to contest this in court), and that Apple was playing its own 4D chess game against Epic, secure in the knowledge that the court wouldn't grant the injunction on the macOS tools. But... Now it just looks like a fit of pique? Apple had already banned Fortnite when it issued the second threat to ban Unreal; the second threat ended with them getting nothing (the court prevented them from following through) and left looking like monopolists during the antitrust investigations. I don't get it.