Apple terminates Epic Games’ developer account
Epic Games has been vocal about the exorbitant lock-in cost imposed by Apple and is ready to throw down. Roman Loyola and Jason Cross report
If you are interested in getting a game by Epic in Apple’s App Store, you’re out of luck. Apple has terminated Epic’s developer account, and games made by Epic are no longer available. The move by Apple is the latest in the battle between the two companies, which started in August when Epic provided an option in Fortnite to buy directly from them. This was a direct violation of Apple’s App Store rules, and Fortnite was removed from the App Store.
If you don’t know, Fortnite allows players to buy in-game stuff (outfits, dance moves, that sort of thing) with
a virtual currency called V-bucks. It’s akin to the gems, diamonds, energy and other virtual currencies used in so many other mobile or free-toplay games.
In August, Epic announced that V-bucks would cost 20 per cent less than they used to. If you were playing on PC, Mac or console, boom – the price was just cheaper.
When it came to playing on iOS, however, it was more complicated. When you bought V-bucks, you were now presented with options. If you chose to purchase through the App Store you paid the old price. Epic added a new ‘Epic direct payment’ option, which used payment information attached to your Epic account (or let you enter new payment details) and gave you the 20 per cent discount.
Epic Games was quite direct in its explanation for why the price is higher for those who buy through the App Store:
Currently, when using Apple and Google payment options, Apple and Google collect a 30 percent fee, and the up to 20 percent price drop does not apply. If Apple or Google lower their fees on payments in the future, Epic will pass along the savings to you.
A DELIBERATE AND DIRECT VIOLATION
This was, of course, a direct violation of Apple’s App Store rules. Section 3.1.1 of the App Store Review Guidelines spells it out: if you sell anything in your app or offer any sort of unlocked functionality, you must use Apple’s inapp payments processing exclusively.
Is this a privacy and security issue about protecting your payment information? Definitely not. Apple allows apps that sell real-world physical goods and services to use their own payment processing. So apps from Starbucks to Amazon to Uber and beyond can have their own payment systems in place, and collect and store your payment information. Apple’s rule only applies to digital content, and even then it has exceptions for a particular class of applications it calls ‘reader’ apps (such as Kindle and Netflix). Hundreds of millions of iPhone and iPad users regularly use apps that include their own payment processing.
Fortnite’s violation of App Store rules was no accident. Epic Games’ CEO Tim Sweeney has been a vocal critic of Apple’s policies and rules on iOS, recently telling CNBC, “Apple has locked down and crippled the ecosystem by inventing an absolute monopoly on the distribution of
software, on the monetization of software.”
Epic Games was deliberately provoking Apple, just as the tech giant in the hot seat over antitrust allegations, both in the US and around the world. It faces several antitrust investigations in the European Union, for example. Apple recently came under fire for preventing the distribution of both Microsoft’s xCloud gaming service (see page 52) and the live gameplay features of Facebook Gaming.
GET THE POPCORN OUT
Epic Games had taken off its glove and slapped Apple across the face with it. Apple was obligated to remove the app from its app stores, or else open the floodgates to all manner of other apps selling digital goods with their own payment processing, just as sellers of physical goods and services do.
This entirely removed one of the world’s most popular games from iPhones and iPads.
When Apple removed Fortnite from the App Store, it added fuel to the fire of Apple’s current antitrust problems. It serves as another huge example to drag before regulatory bodies and courts; a grand demonstration of how Apple’s rules and policies harm not only companies that would compete with it, but customers as well.
APPLE BOOTS FORTNITE OFF THE APP STORE
As expected (some would say encouraged), Apple kicked Fortnite off the App Store. It released the following statement to The Verge:
Today, Epic Games took the unfortunate step of violating the A pp Store guidelines that are applied
equally to every developer and designed to keep the store safe for our users. As a result their Fort ni tea pp has been removed from the store. Epic enabled a feature in its a pp which was not reviewed or approved by Apple, and they did so with the express intent of violating the A pp Store guidelines regarding in-a pp payments that apply to every developer who sells digital goodsorservices.
Epic has had a pp son the A pp Store for a decade, and have benefited from the A pp Store ecosystem-including it’ s tools, testing, and distribution that Apple provides to all developers. Epic agreed to the A pp Store terms and guidelines freely and we’ re glad they’ ve built such a successful business on the A pp Store. The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users. We will make every effort to work with Epic to resolve these violations so they can return Fort ni te to the A pp Store.
Epic Games’ actions seemed designed to provoke this exact response. Apple’s response trots out the same reasons we always hear: that App Store rules are applied equally (only technically true, as the rules themselves designate classes of apps to which different rules apply), that they are designed to protect users (certainly hard to argue when so many popular apps are allowed to include their own payment – how is that any safer just because they’re selling physical goods?), and that the real beneficiary of the App Store has been Epic Games (ignoring Apple’s own benefit to having popular apps on its phones).
It also sets up a particular straw man argument: that Epic Games wants special treatment. In point of fact, Epic Games has been very clear that it wants the opposite – it wants a change of the rules for everyone.
EPIC SPRINGS THE TRAP
Lest anyone doubt this entire move was a deliberate provocation by Epic Games to spring a trap on Apple, the company announced the reveal of an in-game animated short ‘Nineteen Eighty-Fortnite’ recalling Apple’s historic 1984 Macintosh ad. To say the company expected its game to be taken down from the App Store is an understatement.
Epic Games is trying to paint Apple as the new IBM, the controlling ‘Big
Brother’ that Apple was toppling in its 1984 Macintosh ad.
It’s not just a PR stunt, either. Epic Games has filed a Complaint for Injunctive Relief (PDF link) in the Northern District of California, alleging 10 violations of the Sherman Act and California law.
On 17 August, Epic Games tweeted that the situation has escalated: “Apple removed Fortnite from the App Store and has informed Epic that on Friday, August 28 Apple will terminate all our developer accounts and cut Epic off from iOS and Mac development tools. We are asking the court to stop this retaliation.”
APPLE FILES COUNTERCLAIMS
Ahead of the first court hearing on 28 September, Apple has filed counterclaims against Epic Games. Apple alleges “unjust enrichment” and claiming Epic intended to interfere with Apple’s relationship with its customers. To that end, Apple is seeking punitive damages from Epic Games.
The filing sings essentially the same song Apple has sung since this all began: Apple’s App Store is a tremendous gift to customers and developers alike that Apple spends a lot of money on, so how dare Epic avail itself of such wonderful tools and technologies and then cry foul.
Epic is likely to reply with the same line of argument it has used since the lawsuit was filed last month: that the problem isn’t the quality of Apple’s App Store or associated tools, but
the mandatory nature of them and their associated business agreements. Developers have no choice but to participate if they hope to reach a billion users of what are now general computing devices.
On 4 September, Epic filed a formal request for a preliminary injunction for Apple to reinstate Fortnite while the two companies battle it out in court (this was a longer, more formal version of the emergency injunction previously requested).
Epic has until 18 September to file a response. The first hearing is scheduled for 28 September.
Apple is currently under investigation by the EU.
Epic Games is trying to paint Apple as the new IBM, the controlling ‘Big Brother’ that Apple was toppling in its 1984 Macintosh ad.