Apple: Epic Games’ strategy is to bully other platforms for its own gain

"Epic's strategy of coercing platforms for its own gain, under the guise of being 'pro-gamer,' is something Epic continues to do."

What you need to know

• Epic Games' lawsuit against Apple will next be heard on September 28.
• Epic Games is seeking a preliminary injunction, a ruling to have Fortnite returned to the App Store.
• In response, Apple has launched a scathing attack on Epic Games, stating the company bullies and coerces platforms for its own gains "under the guise of being 'pro-gamer'."

Apple has told the court in its Fortnite legal battle that Epic Games has a "strategy of coercing platforms for its own gain," in a scathing attack on the company.

Apple vs Epic Games will next call on September 28 to discuss whether a preliminary injunction should be granted in favor of Epic Games. Epic wants Fortnite to be returned to the App Store, and legal protection of its developer accounts for iOS and the Unreal Engine. The court previously ruled that a temporary restraining order would indeed protect Epic Games' developer accounts, but that Fortnite should remain banned because Epic Games breached Apple's App Store guidelines.

In a motion of opposition to the upcoming hearing, Apple has launched a scathing attack on Epic Games, saying it has a strategy of coercing platforms for its own gain, including notably, Playstation. As noted by Florian Mueller at Foss Patents, the accusation was made by Mike Schmid, Apple's Head of Games Business Development for the App Store in a sworn declaration supporting Apple's filing:

Apple attached multiple declarations (including two that are basically economic expert reports) to its opposition brief. Before I discuss Apple's brief as a whole, and the other declarations, I'd like to highlight what is nothing short of a bombshell accusation of bullying that I just found in a sworn declaration by Mike Schmid, Apple's Head of Games Business Development for the App Store

The text of Schmid's declaration states that Epic "has repeatedly leveraged the global phenomenon that was Fortnite to coerce platforms to change their rules." One such example was a change in September 2018 to enable cross-platform play between Playstation and Xbox. Schmid says that this was "explicitly against PlayStation's rules" and that Epic forced PlayStation's hand:

This was explicitly against PlayStation's rules and Epic pushed PlayStation into a difficult situation with its own user base, where it was forced to make a significant change on Epic's terms, not its own.

Schmid continues by stating that "Epic's strategy of coercing platforms for its own gain, under the guise of being 'pro-gamer,' is something Epic continues to do."

Essentially, Apple believes that the #FreeFortnite attack on its App Store is not the first time Epic has tried to push a platform to make changes to its benefit.

Beyond the scathing accusation of bullying tactics, Schmid further notes that Epic Games' arguments about the impact of an iOS ban on its revenue are overstated. Epic is claiming irreparable harm and a threat to its economic viability if Fortnite remains banned from the App Store. However, Schmid says Epic Games threatened to repeatedly take Fortnite off the App Store if Apple didn't comply with its demands, undermining this argument:

"18. On a variety of occasions, Epic personnel have told me [Mr. Schmid] that if Apple did not comply with its demands, Epic would simply terminate its relationship with Apple and remove its games off of the iOS platform. Epic has repeatedly told me that it could do this because Apple is the 'smallest piece of the pie' when it came to Fortnite revenue. On several occasions, Epic personnel have told me that Apple represents just seven percent of Epic's revenue."

Beyond these declarations, Apple's opposition to the motion remains broadly similar to its previous arguments. Namely:

• Epic will not succeed on the merits of its antitrust claim: Apple says that Epic's proposed definition of a market is untenable and that it has failed to identify any unlawful monopoly.
• Epic cannot argue "tying": Apple says that despite Epic's claim, the App Store and in-app-purchases are not a separate market or product, therefore Epic cannot accuse Apple of unlawfully tying the two together to its own advantage.
• Apple's iPhone business model is procompetitive: Apple notes that the App Store has helped companies including Epic to create innovative businesses capable of generating hundreds of millions of dollars in annual revenue.
• Epic's "irreparable harm" is self-inflicted: The harm Epic claims it will suffer whilst Fortnite is banned on iOS was its own doing.
• An injunction would harm public interest: Apple says that the injunction Epic seeks would "severely damage public interest" by contravening "the public's strong interest in holding private parties to their agreements."

The hearing will take place on September 28.