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

iPad&iPhone user - - CONTENTS -

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.

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