Epic Claims Apple’s Ban Has Cost It 60% of Fortnite Users

Despite last month’s ruling in Apple’s favour, it seems that Epic Games has not given up in its attempts to persuade the courts to force Apple to return Fortnite to the App Store, with the company continuing its filings for the hearing that will be held later this month to determine the final outcome of the game maker’s request.

To be clear, the ruling by Judge Yvonne Gonzalez Rogers last month was an interim decision to deny Epic’s motion ahead of a more complete hearing that has already been scheduled for Sept. 28. In that ruling, which was handed down as a result of a looming Aug. 28 deadline — the date that Apple had promised to terminate Epic’s developer accounts — Judge Rogers barred Apple from terminating anything having to do with Epic’s Unreal Engine, suggesting that this would be causing collateral damage to third parties in the fight between the two Goliaths, however Judge Rogers also clearly agreed with Apple’s statement that as far as Fortnite was concerned, Epic had brought the entire situation upon itself by breaching its contract with Apple and continuing to insist on having its own way.

Of course, the very crux of Epic’s lawsuit against Apple is based on the suggestion that the iPhone maker is violating antitrust laws and engaging in other anticompetitive practices by forcing all apps and in-app payments to be handled through its own App Store, from which it takes a 30 percent cut. However, that’s still a matter for the courts to decide, and the actual lawsuit isn’t expected to even begin until sometime next year.

Epic began a campaign earlier this year of trying to convince Apple to allow it to operate its own third-party App Store, and when Apple refused, Epic decided to take matters into its own hands and simply snuck its own in-app payment system into Fortnite as an alternative, allowing users to bypass Apple’s in-app payment system. To make its point, Epic also charged 20% less for in-game currency (“V Bucks”) purchases. In an email sent to Apple’s executive team the same day, Epic Games’ CEO Tim Sweeney made his plans abundantly clear, stating outright that he would be breaching his contract with Apple and taking this fight to the streets.

Apple naturally responded by kicking Fortnite out of the App Store, and later threatening to terminate its developer accounts — not only the one used for Fortnite, but in a seemingly antagonistic move of its own, the separate account used by Epic to develop the Unreal Engine used by many other third-party games.

Epic’s Case for Fortnite’s Return

At least up to the point at which Apple actually terminated Epic’s Fortnite developer account — a move for which it gave Epic fourteen days notice — Apple had made it abundantly clear that it would be happy to allow Fortnite to return to the App Store if Epic Games chose to submit an update that would comply with Apple’s rules.

Instead, Epic Games submitted at least three more Fortnite builds to Apple, including a Season 4 update, none of which removed Epic’s rule-breaking direct payment system. It’s unclear whether Epic was simply trying to force its point or whether it was naive enough to believe that Apple might change its mind and back down, but either way those updates were refused and Fortnite continued to be off the App Store.

Now in its latest court filing, Epic is once again reiterating that Apple should be compelled by the courts to return Fortnite to the App Store, with its third-party in-app purchasing system intact.

In making its case, Epic is now claiming that its reputation has been harmed by Apple’s actions, adding that it’s seen a massive decline in iOS users after it was effectively forced to leave the iOS version of Fortnite behind, since Apple has refused to accept updates that continue to violate its rules with the presence of Epic’s direct payment system.

Existing versions of Fortnite that are already installed on user’s iPhones continue to run mostly fine, but of course with no updates, iOS users won’t get access to the new season content, making the game somewhat limited.

In what may seem like a somewhat petulant move on its part, Epic also announced that it would cease updating Fortnite for macOS , even though that version is not distributed through Apple’s App Store. While it’s likely that the termination of its developer account has hampered its ability to continue developing Fortnite on the Mac, it doesn’t inherently preclude the company from continuing to distribute the macOS version.

Daily active users on iOS have declined by over 60% since Fortnite’s removal from the App Store.

Court filing by Epic Games

In the filing, Epic also notes that iOS is actually a pretty massive platform for Fortnite, making up 116 million out of the total 350 million registered users, and although some of those play Fortnite on other platforms, surprisingly Epic claims that 63 percent of the Fortnite users on iOS access Fortnite solely from iOS devices — or a little over 73 million Fortnite users.

Epic notes that it’s afraid it “may never see those users again” and blames Apple for tearing apart its Fortnite community. Since Apple’s termination of Epic’s developer account resulted in all of the company’s games being removed from the App Store, Epic is also claiming that there’s been collateral damage as a result of the loss of customers from those other games.

At least part of the reasoning behind Judge Rogers’ preliminary decision last month was that Epic hadn’t proven that it had actually been harmed by Apple’s decision, but she also made it abundantly clear in her ruling that the ball was squarely in Epic’s court.

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.

Judge Yvonne Gonzalez Rogers

Judge Rogers also very specifically used the term “irreparable” harm, however, adding that “you cannot have irreparable harm when you create a harm yourself.”

Of course, things have also changed a bit since Judge Rogers’ initial ruling, which came down before Epic’s developer account had been terminated. At that point, it was completely within Epic’s power to submit a Fortnite update to the App Store that removed its direct purchasing system and brought it back into compliance with Apple’s App Store rules. Epic simply refused to do that.

However, with Epic’s developer account now having been terminated, it’s unclear what recourse the company would have, since as it notes in its filing, Apple has also said it will deny any attempts to apply for a new developer account “for at least a year,” although that’s likely part of Apple’s normal policies and procedures after terminating any developer account. Now that it’s being “denied the opportunity to access even a single new user among the one-billion-plus iOS users for at least the next year,” Epic is claiming that this constitutes “irreparable harm.”

For its own part, Apple has continued to stand by its previous statement, which is to say that it’s “disappointed” that it was forced to terminate Epic’s account and that it still hopes that Epic can continue to work with Apple in the future, but that it’s not about to make an exception to its rules for anybody.

We are disappointed that we have had to terminate the Epic Games account on the App Store. We have worked with the team at Epic Games for many years on their launches and releases. The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they’ve followed for the past decade until they created this situation. Epic has refused. Instead they repeatedly submit Fortnite updates designed to violate the guidelines of the App Store. This is not fair to all other developers on the App Store and is putting customers in the middle of their fight. We hope that we can work together again in the future, but unfortunately that is not possible today.

Apple

It’s worth keeping in mind here that from a strictly legal perspective, Apple is well within its rights to permanently ban Fortnite from the App Store and terminate Epic’s developer account based on Epic’s actions, and in fact it didn’t even need to give Epic the 14 days notice that it did. This was not a naive developer or a confusion regarding the App Store policies, but rather a premeditated and calculated move by Epic Games to violate the terms of its agreement, and as Apple Fellow Phil Schiller said, “Developers who work to deceive Apple are terminated.”

So arguably Apple’s willingness to mend fences with Epic Games over this whole situation is already an olive branch on its part, and it seems likely that even with the developer account now having been terminated, Apple would be willing to reinstate it if Epic complied with the current App Store rules. However, Epic has made it clear that it refuses to “collude” with Apple on its monopolistic practices.

Apple is asking that Epic revert Fortnite to exclusively use Apple payments. Their proposal is an invitation for Epic to collude with Apple to maintain their monopoly over in-app payments on iOS, suppressing free market competition and inflating prices. As a matter of principle, we won’t participate in this scheme.

Epic Games

Ultimately, however, what Epic is, in essence, asking for in its request for a preliminary injunction is that the courts basically rule in its favour long before its lawsuit is actually heard. Ordering Apple to return Fortnite to the App Store in its current form would be tantamount to the court declaring Epic’s position as correct, and so it seems very unlikely that Epic will see a decision in its favour, especially as long as it continues to be possible for it to return Fortnite in its previous form.

If Apple refused to reinstate Epic’s developer account or accept Fortnite back under any conditions, then Epic might have a case, but thus far it still seems likely that the onus remains entirely on Epic. Although Epic claims its position is the righteous one, and that it’s Apple’s behaviour is illegal and anticompetitive, this has not been decided by the courts, and likely won’t be for at least a couple of years.

Epic’s continuing intransigence doesn’t really bolster its case in any meaningful way either, since Judge Rogers made it abundantly clear that returning Fortnite to the App Store would not preclude its ability to continue its lawsuit, and in fact should the courts ultimately rule in Epic’s favour, Apple could be ordered to pay compensation or other damages to Epic to cover the period during which the matter was in dispute, so Epic could ultimately gain more than it loses by putting Fortnite back onto the App Store, but it clearly believes it has a case to force Apple’s hand right now. It remains to be seen whether the courts will agree, but we’ll find out when it goes to a full hearing on Sept. 28.