Epic Games v. Apple

However, that case centered more on the practices and deals that Google, as a dominant tech giant, wielded over partners to assure use of the Play Store.

Since 2015, Epic Games's founder and CEO Tim Sweeney had questioned the need for digital storefronts like Valve's Steam, Apple's App Store for iOS devices, and Google Play, to take a 30% revenue sharing cut, and argued that when accounting for current rates of content distribution and other factors needed, a revenue cut of 8% should be sufficient to run any digital storefront profitably.

[1][2] While a 30% revenue cut was an industry standard across computers, consoles, and mobile platforms in 2019,[3] Sweeney stated that higher revenue shares made sense on consoles where "there's enormous investment in hardware, often sold below cost, and marketing campaigns in broad partnership with publishers", but did not extend to open platforms like mobile devices and personal computers.

[11] Sweeney further stated that "If every developer could accept their own payments and avoid the 30% tax by Apple and Google we could pass the savings along to all our consumers and players would get a better deal on items.

The principle they state, taken literally, would rule out all cross-platform ecosystems and games with user created modes: not just xCloud, Stadia, and GeForce NOW, but also Fortnite, Minecraft, and Roblox.

Epic Games has argued that Apple maintains a monopoly for iOS-enabled devices, and thus its behavior in restricting alternative payment systems and storefronts are anticompetitive.

[16] Then, on August 13, 2020, Epic released a hotfix (which did not require prior approval) to the mobile versions, triggering visibility of this purchasing option.

[17] Within hours of this hotfix going live, both Apple and Google had removed Fortnite from their storefronts stating the means of bypassing their payment systems violated their terms of service.

[25] Epic stated that Google's restrictions on the Android system interfered with deals for pre-loading Fortnite on phones from OnePlus and LG.

Microsoft wrote in their support, "Denying Epic access to Apple's SDK and other development tools will prevent Epic from supporting Unreal Engine on iOS and macOS and will place Unreal Engine and those game creators that have built, are building, and may build games on it at a substantial disadvantage.

Rogers wrote that the removal of the developers licenses had "potential significant damage to both the Unreal Engine platform itself, and to the gaming industry generally" and Apple "has chosen to act severely" in threatening that step.

[36] Apple called Epic's suit an attempt "to be part of a marketing campaign designed to reinvigorate interest in Fortnite".

Judge Rogers indicated that she was in favor of a jury trial when the case would be heard, then expected to be in July 2021, stating during the hearing "I think it's important enough to understand what real people think.

Rogers said that "a final decision should be better informed regarding the impact of the walled garden model given the potential for significant and serious ramifications for Sony, Nintendo and Microsoft and their video game platforms.

Facebook itself had been in prior conflict with Apple over its App Store policies and had amassed its own collection of information they plan to share with Epic.

This included Epic previously approaching Sony Interactive Entertainment in early 2018 to try to convince them to allow for cross-platform play on the PlayStation consoles; Epic approaching Microsoft to try to get them to allow free-to-play games to be played on the Xbox consoles without the need for an Xbox Live Gold paid subscription; and an unannounced game streaming service planned by Walmart.

[66] Under this market definition, Judge Rogers concluded that Apple was not a monopoly and mostly a duopoly alongside Google, with potential competition to come from Nintendo and Google Stadia, and while Apple "enjoys considerable market share of over 55% and extraordinary high profit margins", that type of success was not an illegal monopoly.

[66] Rogers stated that the lack of competition in this area was of concern and that Apple only seemed to be motivated to innovate or change its App Store policies when subject to litigation.

[66] Rogers believed that the 30% revenue cut that Apple charges may be "unjustified" relative to the value they offer, but without significant competition to compare alternate schemes, she could not make any direct order on this.

[66] On the day of Rogers's decision, a representative for Apple stated that "Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law.

"[64] However, in October 2021, Apple filed an appeal of the decision, seeking to overturn the preliminary injunction related to anti-steering practices which was due to go into effect in December 2021.

[71] Judge Rogers denied a stay of the injunction related to the anti-steering provisions in November 2021, requiring Apple to comply by December 9, 2021, 90 days from the initial order.

[72] The Ninth Circuit issued a stay on the portion of Judge Rogers's order related to provide in-app links to alternate payment systems on December 8, 2021, ruling that Apple had shown likelihood to succeed on their appeal, though the order requiring Apple to allow apps to communicate to users about such payment systems outside of the app was upheld.

[74] Epic filed notice of its appeal to the Ninth Circuit on September 12, 2021, challenging Judge Rogers's conclusion that Apple was not a monopoly.

[84] Sweeney stated that these changes are in bad faith compliance with the court orders, maintaining a 27% anti-competitive tax and a "scare screen" that are intended to dissuade developers from using third-party payment systems.

[86] Apple announced in January 2024 that to comply with the European Union's Digital Markets Act (DMA) that it will allow third party storefronts to be loaded onto iOS devices in March 2024.

[93] The United Kingdom passed the Digital Markets, Competition and Consumers Bill (DMCC) in May 2024, which made similar requirements on app stores as the EU's DMA.

[94] Companies like Facebook, Spotify, and the Match Group supported Epic Games in its lawsuit and spoke of their own past issues with Apple's App Store policies related to their services.

[95] Digital Content Next, a non-profit trade group representing media outlets like The New York Times and The Wall Street Journal, also backed Epic's suit, asserting among other issues that Apple has given out uniquely favorable deals to some providers like Amazon but not to others.

[97] When the game was removed from the App Store, it did not surprise many users as most people were anticipating it from the beginning and it seemed that many players purely jumped "on board for the memes", according to Polygon.

Epic Games's founder and CEO Tim Sweeney
Judge Yvonne Gonzalez Rogers oversaw proceedings at the District Court.