Judge Refuses to Reinstate Fortnite Game on Apple Devices

(Pixabay image via CNS)

OAKLAND, Calif. (CN) — Calling its decision to breach an allegedly anticompetitive contract with Apple a “self-inflicted wound,” a federal judge on Friday refused to reinstate Epic Games’ popular Fortnite game on the app store for millions of Apple device users.

Presiding over a lawsuit challenging Apple’s practice of taking a 30% cut on all in-app purchases, U.S. District Judge Yvonne Gonzalez Rogers found more evidence is needed to determine if Apple’s conduct truly violates antitrust laws.

In the meantime, she said it would be unfair to let Epic Games and other app makers breach their contracts by sidestepping Apple’s in-app purchasing system while also enjoying the benefits of those contracts.

“Epic Games cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit,” Gonzalez Rogers wrote in a 39-page ruling partly denying Epic Games’ request for a preliminary injunction.

But the judge also found that Apple went too far in restricting apps created by Epic Games’ affiliates.

“Apple’s reaching into separate agreements with separate entities appears to be retaliatory, especially where these agreements have not been otherwise breached,” Gonzalez Rogers wrote.

Though she analyzed more evidence and arguments than were presented for Epic Games’ motion for a temporary restraining order in August, Gonzalez Rogers reached the same conclusions.

The judge noted that at the time Epic Games decided to breach its contract by launching its own in-app payments system, a separate class action was already pending over Apple’s allegedly monopolistic control over the iOS app market.

The judge said Epic Games failed to sufficiently justify why it needed to take such bold action instead of waiting for the legal issues to play out in court.

“Epic Games has never adequately explained its rush, other than its disdain for the situation,” Gonzalez Rogers wrote. “The current predicament is of its own making.”

Epic Games has acknowledged that no technical issues prevent it from deactivating its in-app payment system for the Fortnite game and complying with Apple’s terms of service.

Gonzalez Rogers said she even offered to place Apple’s 30% fees for in-app purchases in an escrow account until the case gets resolved, an offer that Epic Games “flatly rejected.”

“The refusal to do so suggests Epic Games is not principally concerned with iOS consumers, but rather, harbors other tactical motives,” the judge wrote.

Epic Games argued that it has suffered reputation harm and seen a 60% decline in iOS users for its Fortnite game. Those who still play spend significantly fewer hours on the app since they are stuck using an earlier version and unable to play with other users, Epic Games told the judge.

Gonzalez Rogers concluded that because Epic Games created the situation, “a self-inflicted wound” cannot serve as the basis for irreparable harm.

The judge said she has empathy for Fortnite players who cannot access the latest version of the game on iOS, “especially so during these continued difficult times that is the COVID-19 pandemic era, where gaming and virtual worlds are both social and safe.”

But the judge found there is a “significant public interest in requiring parties to adhere to their contractual agreements or in resolving business disputes through the normal course.”

Turning to Apple’s decision to restrict apps offered by Epic Games’ affiliates, Gonzalez Rogers found the case for a preliminary injunction more compelling.

Apple blocked Unreal Engine, a game engine used by third-party developers to create games. The game engine is distributed by a subsidiary of Epic Games and operates under a separate licensing agreement with Apple.

“Apple’s aggressive targeting of separate contracts in an attempt to eradicate Epic Games and its affiliates fully from the iOS platform was unnecessary and imperiled a thriving third-party developer ecosystem,” Gonzalez Rogers wrote.

The judge further found that the ongoing pandemic has demonstrated a need for “substantial digital and virtual innovation” and that the legal dispute between Apple and Epic “should not create havoc to bystanders,” such as third-party app developers.

In keeping with mandates issued in her prior temporary restraining order, Gonzalez Rogers refused to make Apple reinstate the Fortnite app but blocked the Cupertino-based tech giant from restricting other apps offered by Epic Games’ affiliates.

Attorneys for Apple and Epic Games did not immediately return email requests for comment Friday.

In 2019, Fortnite garnered $1.8 billion in proceeds for Epic Games, according to Nielsen. The CEO of Epic Games, Tim Sweeney, reported that Fortnite has attracted more than 250 million players.

Epic Games also has a lawsuit pending against Google, which, like Apple, kicked Fortnite off its Google Play store in August after Epic Games started letting its users bypass the payment system that lets Google collect fees on each in-app purchase.

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