Chicago Business Litigation Lawyer Blog
Apple’s app store is one of the most popular in the world, which means you need to play nice with Apple if you’re creating an app and you want to get in front of the millions of people who use Apple’s store to download apps. But Apple takes a percentage of every payment made to an app creator through their app store, which is why it retaliated after Epic Games introduced a new in-app payment system within their videogame, “Fortnite”. Apple removed the game from its app store as soon as it became aware of the update to the popular videogame.
Epic responded with a lawsuit that asked the court for an injunction against Apple that would require the tech giant to put the game back in its app store. It claimed Apple is acting as a monopoly with a payment system that allegedly suppresses competition and inflates prices.
Apple countersued with a claim that the videogame company had breached its contract with Apple by introducing an in-app payment system within the game that avoided the 30% cut every other app creator pays Apple and Google for placement in their app stores. Within hours of the addition of the in-app payment system, both tech giants had removed “Fortnite” from their app stores.
In its own complaint, Apple accused Epic, a multi-billion-dollar company, of trying to derive significant financial benefit from placing its videogame in Apple’s app store without sharing any of those profits with Apple.
Back in June, Tim Sweeney, Epic’s CEO, emailed executives of Apple, including the CEO, Tim Cook, asking for a special agreement that would exempt Epic from some of its contractual obligations, including the ones dealing with payments made in the app store. Apple rejected those terms, and in early August Epic sent to the app store an updated version of “Fortnite” that the company described as a “hotfix”, but Apple alleges it was more like a Trojan horse. The “hotfix” version of the videogame allegedly allowed it to bypass Apple’s normal review process and payment system, thereby allowing Epic to sneak into Apple’s app store a videogame that charged customers in the app, rather than in the app store.
Once the “Trojan horse” version of the videogame was in Apple’s app store, Sweeney sent another email to Apple saying that his company refused to abide by Apple’s payment processing rules, after which his company activated the in-app payment system, which Apple alleges was little more than theft.
Apple’s app store has about 1 billion global customers, and in just the first seven months of 2020, in-app purchases, premium apps, and subscriptions generated almost $39 billion in global revenue. Apple claims the fees it takes from app purchases help the company fund the development and maintenance of an app store that provides a safe and secure environment for customers to purchase and download third-party software.
For Epic’s part, the videogame company has earned more than $600 million by working with Apple. Continue reading ›