Epic vs. Apple: Order Granting in Part and Denying in Part Motion for TRO [pdf]
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I'm not surprised that Epic started this: they want their game store on iOS, and the only way that happens is via an antitrust lawsuit — and you can't bring an antitrust lawsuit unless you show evidence of harm (aka, lost Fortnite sales). Epic wanted Fortnite to be banned so that they could sue Apple.
I'm curious why Apple escalated, though. It seemed to me like they were playing into Epic's hand: they're currently under multiple antitrust investigations by the US and the EU, and using their market power on iOS to corral developers on macOS seems like a pretty obvious violation, and a novel one: when they banned XCloud from iOS, for example, they didn't also ban MS Office from running on Macs. Why would they try to do it now? When I first saw it I wondered if Apple knew something we didn't (since Epic would pretty obviously attempt to contest this in court), and that Apple was playing its own 4D chess game against Epic, secure in the knowledge that the court wouldn't grant the injunction on the macOS tools. But... Now it just looks like a fit of pique? Apple had already banned Fortnite when it issued the second threat to ban Unreal; the second threat ended with them getting nothing (the court prevented them from following through) and left looking like monopolists during the antitrust investigations. I don't get it.
I thought the point of antitrust is that it brings harm to the consumers and not just some lesser company?
It was a PR exercise to show the world the wondrous benefits of a potential Epic Games Store on iPhone/Android.
And of course once they had such a store they pinky promise to never increase the prices in the future.
So all that will happen is that certain games will exist only in one store and not be subject to competition.
Or they will secretly sell your data to third parties which Apple won't do.
You might argue that consumers are somehow injured by Fortnite existing on the Epic store but not on Steam. But I think that's pretty hard to prove, at least under existing antitrust law: Fortnite is free, and its microtransactions are not particularly more expensive than competitors, and if you don't want to play Fortnite because you don't like the Epic store for some reason, there are dozens of competing battle royale shooters on every platform Fortnite runs on (and, now, even platforms Fortnite doesn't run on). Where is the lack of competition? Or the injury?
Epic's case centers on injury not to consumers, but to developers. That case is easier to make, and it's the case they care about because they operate a game store that doesn't exist on iOS due to Apple's policies — and a game engine business that operates on a 5% revenue share model, which naturally would increase its profits if Apple stopped taking a 30% tithe from developer revenues in the first place. They're perfectly willing to sacrifice Fortnite Mobile, a comparatively small amount of revenue, temporarily if it gets their other business streams more income in the future.
Strange most other markets don't just let everyone to sell their products (physical or virtual) on their markets at no cost [1].
[1] https://www.ign.com/articles/2019/10/07/report-steams-30-cut...
The nominal annual fee is a cost for accessing the dev tools only, it's in no way a royalty-free cost to sell products on one of the most lucrative markets in the world - that's what their standard royalty % (unchanged from the outset) covers.
How is it given for free, you pay for it when you buy the phone.
You could buy an iPhone and put a jail break OS on it, you're still paying the full amount for the device.
If I buy a new TV and throw the remote in the trash, the remote was not part of the cost of the TV?
Also, "jail break OS"? Isn't that just iOS?
A hardware remote is, which has an actual per unit cost (a software remote wouldn't be). The cost of Software distribution is effectively $0, a valid comparison would be if you bought your new TV with Android (which costs $0 for the manufacturer to include) you could replace the TV OS with Tizen OS which is also free, neither OS costs anything to the manufacturer or consumer and you don't get it cheaper for purchasing the same TV without an OS.
> Also, "jail break OS"? Isn't that just iOS?
There used to be a healthy alt OS ecosystem for iPhone before newer iPhone's have become increasingly lockdown where it doesn't appear you can do that anymore, the best you can do is JailBreak iOS and install a custom package manager and install custom software not permitted on the App Store.
Have you never heard the phrase "There ain't no such thing as a free lunch"?
The reason Apple does not sell the hardware at a cheaper cost should tell you that the OS is not free. The cost is included. Its a package deal.
> it's free for all their devices for as long as they meet the hardware requirements for running new versions.
If the OS is free then why not let it run on very old models, it will run very slow but that should not matter since the OS is free, right?
Yes, it's a meaningless cliche which is often untrue (I've had many free lunches myself). But "free/gratis" does have a definition to mean "without cost or payment", e.g. how much it costs to acquire/download every version of iOS going back a decade.
Have you ever heard of alternative business models? Try Googling Android, Tizen OS, Web OS, Firefox OS for alternative mobile OS's, it's nearly impossible to for a mobile OS to become mainstream if you had to pay for it.
> If the OS is free then why not let it run on very old models, it will run very slow but that should not matter since the OS is free, right?
Because Apple has to support the devices it says it supports & they don't run acceptably. This isn't new, a lot of commercial software wont support software that doesn't meet a minimum hardware requirement.
So the other part did not want anything from you, what was the purpose of the free lunch then?
Not sure why you are looking at download costs, how about the employee costs who develop IOS.
If you googled those business models you will understand that there is no free lunch, similarly there isnt one with IOS, you pay for it when you buy the device.
> Because Apple has to support the devices it says it supports & they don't run acceptably.
No that is not true, Apple has no problems when IOS does not run "acceptably", infact they make it a feature so that IOS runs slow on older phones so that people will buy new phones to pay for IOS. That is the kind of shady behaviour Apple has to do when IOS is not free.
A completely irrelevant point, just like this tired cliche.
> Not sure why you are looking at download costs, how about the employee costs who develop IOS.
The cost to the end user is how much it costs them to download/acquire iOS, which is $0, for all versions & updates, previous, current & future. The employee costs is part of the Apple's massive investment into creating & maintaining iOS, an investment they're able recuperate from App Store revenue.
Which is exactly my point, it would've cost Apple billions to develop & maintain iOS over its lifetime yet they give it away for free because they're able to collect revenue for alternative revenue streams such as the App Store.
> If you googled those business models you will understand that there is no free lunch, similarly there isnt one with IOS, you pay for it when you buy the device.
Your forced cliche keeps failing. Android like iOS doesn't have a price because there isn't one, there is $0 cost to the end user, maintaining an ubiquitous dominant mobile OS generates incomes through alternative revenue sources - shouldn't be a surprise to anyone they both have App Stores that generates revenue from the same standard Royalty %.
> Apple has no problems when IOS does not run "acceptably"
Of course they do, they care deeply about UX and maintaining high Customer satisfaction & Brand value which is always at industry highs, they'll never throw a link to new OS's and say we don't support & have never tested this on legacy hardware older than 5 years, but feel free to try installing the latest software on inadequate devices yourself - it may not run & may brick your device, but we don't care because it's years out of warranty so it's no longer our problem! No, just like their other OS's they'll enforce the minimum hardware it can run adequately on.
> infact they make it a feature so that IOS runs slow on older phones so that people will buy new phones to pay for IOS.
Not only are your cliches bad, but so are your debunked conspiracy theories! Also you can't pay for iOS.
Then what was the point of bringing that irrelevant point?
>they're able to collect revenue for alternative revenue streams such as the App Store.
Did Apple tell you that, can you give some sources for your claims. They might be doing that but also pass the cost to the user when the user purchases the device.
> The cost to the end user is how much it costs them to download/acquire iOS, which is $0
And we are back to the starting position, show me where can I buy Apple hardware without the OS, if you cannot show me that then you cannot say IOS is free, the cost is included in the device price.
> maintaining high Customer satisfaction
Then why did they intentionally make old devices run very slow?
Has it ever occurred to you that they did that intentionally to force users to upgrade so that they can get new revenue for IOS and the hardware?
> Also you can't pay for iOS.
Yes because the price is included in the hardware.
You cannot buy just the hardware without the OS at cheaper cost because its a combined hardware/OS cost.
Also, if the App Store revenue is for iOS development, does that mean that people who buy an iPhone and never pay for an app or an IAP are a net loss to Apple?
Are you sure it's free? The only way to buy ios, is to buy a device running it. It would seem reasonable that part of the premium you pay for eg an iPad is equivalent to an oem license for ios?
I've always hated that Apple seem to think they know better than anyone else; you can't do as you wish on their platforms because you might be stupid.
No, wait, not that I’m stupid. Though I’m sure some people would call me that.
It’s that they make the decisions for me. I’m specifically paying a premium to delegate the responsibility for making those decisions to them.
I spent years running Nexus devices (since before they were Nexus... still have my ADP1 in a drawer) on Cyanogenmod and LineageOS. At some point I got busy and didn’t have time for my phone to be a hobby or even a thing I had to think about and chose to delegate those decisions to Apple rather than Google because they generally seem to lean more toward privacy-conscious decisions and making money on hardware and apps rather than decisions to support violating my privacy and making money on advertising.
I already paid more for what I agree is a privilege by buying an expensive Apple phone. If you don’t like the rules, then don’t sell here. I’m cool with that. Leave my walled garden alone. I’m comfortable in here.
The App Store is more or less a red herring here (relevant only to the 30% fee being too much).
Offering this consumer choice is what lead to Fortnite being banned.
That being said, the government can investigate without a lawsuit. But just because the government investigates, that doesn't guarantee the government will prosecute; a lawsuit guarantees prosecution, unless it's so baseless it gets thrown out by the court (which Epic's hasn't been).
Hence why Epic took a step that would obviously result in a ban: they needed the correct type of evidence of injury in order to sue.
1: https://www.businessjustice.com/the-elements-of-antitrust-in...
Since Epic has 2 different accounts, Apple could have terminated only one of them, leaving Unreal Engine intact. But Schiller’s declaration says that in these cases they have always terminated all accounts that are owned by the same company / conglomerate (I can easily see this is useful in some cases). So again I feel they were in a corner: they had to follow what they have always done, so that other companies couldn’t prove a ad-hoc enforcement of rules (termination rules, in this case).
It also follows that Apple could claim that Epic used this unreal dev tooling to break the contract and thus the tooling is "illegal" and subsequently must bear the consequences as well.
I don't think there's anything overtly malicious to the unreal part save for usual corporate lawyering of go big and then back off rather than not reaching far enough and losing.
It's somewhat unusual for corporate lawyering to go big like this against a well-funded opponent. Apple didn't actually have the legal standing to do it — as evidenced by the court issuing the emergency injunction so quickly — and now there's precedent on the books that this kind of threat won't be enforceable against others. Usually, sadly, corporate lawyering tactics are to go nuclear against someone who can't afford to fight you, and tread more carefully when someone can — lest the court take away your nuclear weapons when the big player lawyers back.
Apple wanted to terminate all the dev accounts belonging to Epic which "just to happens" to include Unreal.
> This is a quote from the letter that Apple sent to Epic;
>> If your membership is terminated, you may no longer submit apps to the App Store, and your apps still available for distribution will be removed. You will also lose access to the following programs, technologies, and capabilities:"
>> [...]
>> - Engineering efforts to improve hardware and software performance of Unreal Engine on Mac and iOS hardware; optimize Unreal Engine on the Mac for creative workflows, virtual sets and their CI/Build Systems; and adoption and support of ARKit features and future VR features into Unreal Engine by their XR team
> That is a statement that Apple made saying they will stop all help they give to Epic getting UE running on all Apple hardware. With the other stuff in the letter it makes it very clear that the problem is not just one for Epic Games, but all of Epic.
> You can read it yourself - https://cdn2.unrealengine.com/epic-v-apple-8-17-20-768927327.... (Apple's letter starts on page 51 of the PDF)
Source: https://news.ycombinator.com/item?id=24269719
So they seem to be very specific and specifically call out work on the Unreal Engine.
What they're calling out is that Apple engineers will no longer prioritise improving the performance of Unreal on macOS and iOS. This is kinda outside the developer agreeement.
If a third party developer uses an open source library instead of Unreal, must that library belong to an entity that signed an agreement with Apple or the whole app is banned by default?
No, if you try to smuggle forbidden features through the approval process by hiding them and only enabling them after the app is published your developer account will be terminated immediately. This is clearly documented and Epic knew this up front.
Getting the chance to revert the changes before the account is terminated is what sets apart Epic from most other developers, like people that changed their apps to full emulators after it got approved like what looked like a single game.
"...On Thursday, August 13, 2020, Epic Games made the calculated decision to breach its allegedly illegal agreements with Apple by activating allegedly hidden code in Fortnite allowing Epic Games to collect IAPs directly. In response, Apple removed Fortnite from the App Store, where it remains unavailable to the date of this Order. Later that same day, Epic Games filed this action and began a pre-planned, and blistering, marketing campaign against Apple... "
"...The Court finds that with respect to Epic Games’ motion as to its games, including Fortnite, Epic Games has not yet demonstrated irreparable harm. The current predicament appears of its own making... Epic Games admits that the technology exists to “fix” the problem easily by deactivating the “hotfix.” That Epic Games would prefer not to litigate in that context does not mean that “irreparable harm” exists..."
"...Epic Games moves this Court to allow it to access Apple’s platform for free while it makes money on each purchase made on the same platform. While the Court anticipates experts will opine that Apple’s 30 percent take is anti-competitive, the Court doubts that an expert would suggest a zero percent alternative. Not even Epic Games gives away its products for free..."
Ouch.
Separately, the aspect of Apple pulling keys for the developer (e.g. Unreal Engine) platform access was granted a preliminary injunction. Which seems reasonable.
I guess Epic has a couple days to decide whether to give in or not: "Fortnite’s next season starts on Thursday, August 27, 2020, and will require an update of the game to play."
Apple is arguing as if accessing their platform for free was a crime. This makes sense, since they have costs associated with reviews, code signing and distribution. But that is of their own making. Walled gardens should be outlawed.
Of course, that doesn’t mean I like being stuck with an American cultural hegemony that says sexual content is forbidden, or that needs an encryption export licence from the USA government for apps written by non-Americans for non-Americans, and which still demands annual reporting to the US government for using https.
I’m happy with any walls that meet basic security standards, but I do want a wall, even if it would be nice to choose which wall.
Heck, you could easily imagine a system where software distributed outside the app store can only access a subset of perms if security is such a concern, and that'd still be less anti-competitive
> but the two concerns are orthogonal really.
And many of those APIs can be used to extract enough information to fingerprint the device, determine your location or steal your data e.g. accessing the list of WiFi networks or browser history.
So no. The two concerns are very much related.
That's complete nonsense.
Dynamic dispatch has nothing to do with the ability or not of a program to access API. Dynamic dispatch is the selection at runtime of the correct version of a polymorphic function. Obviously, you can sandbox programs written in languages using dynamic dispatch.
I am sure Apple would love to know how you've managed to solve this.
The point of a private API not security, it's to distinguish between the public interface that is meant to be stable and implementation details that might change.
They might do some rudimentary checks to catch obvious usage of private APIs, but it's not part of the security model and still apps show up on the App Store that use private APIs, all the time.
but there is nothing intrinsic to their operation that requires it, and apple could un-plug it.
this is like apple arguing that IE is central to the fabric of windows, and can't be removed during the european antitrust suit.
it's dishonest, but apple will likely make the same claim.
I think this system is called the world wide web.
Apple would have a much stronger case if mobile safari were a first class PWA platform, instead of being almost useless for PWA's. Then the choice would be: make a PWA and live in the browser sandbox, or go through approval and be on the app store.
A podcast player or music and video streaming app, or a game like fortnite, are not going to work as web sites.
Sorry I'm not following. What does any of this have to do with the app store?
It's clearly not possible for Apple to actually check all functionality of every app, particularly as it's so easy to hide it or to put it in an embedded web view.
In this case, Epic managed to put an alternative payment method in - but they are a trusted brand, so there's no real security issue overall.
But could some other developer do the same thing and harvest payment details? Of course.
The iPhone is a hardware device, not a platform, and it's not fine if Apple wants to be the sole guardian of it. Even the court response here conflated the two. Epic doesn't want to be on the App Store for free (that wouldn't be fair), but it does want to be allowed to install its software on iPhones for free (that is fair).
"with respect to the Unreal Engine and the developer tools, [...] the contracts related to those applications were not breached. Apple does not persuade that it will be harmed [...] Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem. In this regard, the equities do weigh against Apple.
Apple's behavior here was not reasonable and definitely deserved this restraining order.
They had ads and lawsuits ready when they pulled the trigger on this chain of events so it wouldn't surprise me if they made sure that the Unreal Engine issue was included.
* Epic Games, Inc. develops Fortnite and has an Apple developer account that it is released under.
* Epic Games International, S.a.r.l. develops Unreal Engine and holds its own Apple developer account.
Do... do they not?
The point being made in that paragraph seems valid regardless, but that's a strange comparison to end with - is Fortnite not free-to-play on Apple devices? It certainly is on all other platforms I've seen it on.
Free to play, does not mean they give away their products for free
It's not 30% but the actual amount doesn't matter in the context of that particular part of the order.
"the Court observes that Epic Games strategically chose to breach its agreements with Apple which changed the status quo"
"However the showing is not sufficient to conclude that these considerations outweigh the general public interest in requiring private parties to adhere to their contractual agreements or in resolving business disputes through normal, albeit expedited, proceedings."
"Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders."
This ruling is what I expected and seems quite reasonable. Epic doesn't get temporary special privileges to break App Store rules (even though they are alleged to be illegal), but also Apple can't retaliate against them in other areas.
If Epic does reverse the payment changes in an attempt to return Fortnite to the App Store until the lawsuit is resolved, I doubt Apple will let them back in unless forced by the court (despite Tim Cook's "Sir, we do not retaliate or bully people").
There have been many over the last decade and Apple's behaviour has been consistent i.e. they will simply allow Epic to come back onto the store and pretend like nothing ever happened. Exactly like we saw recently with the Hey app.
Apple doesn't want to punish developers but they will play hard ball if they don't abide by the rules.
But it's also the first publish dispute where someone purposely put in code to activate alternative payment options and broke the rules. Apple is setting an example of epic. Don't break the rules.
What Epic did was hide code and later enable the feature.
Basically now it’s the best time for them to do it, Apple is a huge target and they can gain industry support, Fortnite is big enough that even the average judge, jurist and jury member is likely aware of it and right now they stand to lose very little financially from not being on iOS while the potential future gains are insane.
1: https://www.forbes.com/sites/mattperez/2020/01/14/epic-games...
Fortnite brought Epic £1.8b in revenue for 2019, there is no way that 25% of that came from iOS based on actual player data and experience, if their iOS revenue is 10% of the total I will be in shock.
The US is about 80% of Fortnite’s but the majority of the players are on consoles not mobile. The 80% figure will change drastically when China grants epic permission to monetize the game as the vast majority of their players are in China.
IIRC they said 11% during the hearing, I don't remember if that was 11% of Fortnite revenue or total revenue, and I don't remember if that might have included android as well.
Android is likely a much much smaller to the point of being a rounding error for Epic right now, there aren't many devices that can play the game right and in the markets that they actually get revenue from they aren't that popular.
I don't think Epic has any other games on the App Store tbh, and they probably didn't include licensing revenue.
I wonder if there could have been a better sequence of events (e.g. sue first rather than sneaking it in)?
Two billion dollar tech companies have started a slap fight, both have claimed its for the benefit of their customers/users but in reality its about their own personal bottom line.
The gaming forums filling up with pre-teen twits willing to cheer lead for their respective megacorp is thoroughly depressing to look at.
They benefit from being able to play the "if you ban us, you also ban all of the little mom & pop game developers" sympathy card.
[0] in the same sense that Apple is a monopoly on smartphones, hence the air-quotes.
It was under a different agreement from the regular "Epic Games" that Apple decided to both terminate