Apple files countersuit against Epic Games, seeking damages
Tech giant doubling down after officially revoking Epic's access to Mac and iOS development tools
Apple is firing back at "Fortnite" creator Epic Games following the game developer's decision to file a new injunction to be reinstated on the App Store in which it accuses the tech giant of being a “monopolist” that maintains its monopolies by “explicitly prohibiting any competitive entry.”
Apple's counter lawsuit, filed Tuesday with the District Court for the Northern District of California, alleges the game developer committed a "flagrant breach of contract." The company is seeking an unspecified amount in monetary damages for what it is calling a "sneak assault on the App Store."
"Epic’s lawsuit is nothing more than a basic disagreement over money," Apple wrote in the filing. "Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store."
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Apple argues that the game developer believes it is "too successful to play by the same rules as everyone else" and is just trying to reap the benefits of the App Store without paying for them. The lawsuit notes that Epic has earned over $600 million through the platform.
A spokesperson for Epic Games declined to comment to FOX Business on the counter suit.
The legal battle started when Epic launched a direct payment system within "Fortnite" on Aug. 3 that allowed the game developer to avoid paying a 30% commission fee to the tech giant. Apple responded by launching a lawsuit of its own, and announced its plans to suspend Epic from accessing the App Store's developement tools beginning Aug. 28.
Epic argued the move would cripple its Unreal Engine, used by many game developers to create their own products and asked the court to block the move. While a judge ruled last month that Apple could not retaliate against the Unreal Engine, the court ruled that it would not reinstate Epic on the App Store.
Apple has said it would allow "Fortnite" back into the store if Epic removed the direct payment feature, but Epic has refused, saying complying with Apple's request would "collude with Apple to maintain their monopoly over in-app payments on iOS."
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After officially revoking Epic's access to Mac and iOS development tools, Apple is now taking the fight one step further by seeking "restitution and disgorgement of all earnings, profits, compensation, benefits, and other ill-gotten gains obtained by Epic" as a result of its direct payment system.
The company is also asking for damages for harm to its reputation from frustrated "Fortnite" players and a public relations campaign against Apple that includes a parody of the company's "1984" television commercial and playable character "Tart Tycoon," who bears some resemblance to Apple CEO Tim Cook.
The tech giant has also asked the court to disable Epic's payment system altogether.
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Apple continues to defend itself against Epic's accusation, arguing in the counter suit that it is "not a monopolist of any relevant market" and that Epic is trying to "dismantle the App Store’s entire business model to advance its own economic interests without regard to the effect on other developers and consumers."
"Competition both inside and outside the App Store is fierce at every level: for devices, platforms, and individual apps. Fortnite users can dance their Floss, ride their sharks, and spend their V-Bucks in no fewer than six different mobile, PC, and game-console platforms," Apple said. "And the business practices that Epic decries as exclusionary and restrictive...have vastly increased output and made the App Store an engine of innovation, with the number and diversity of apps, the volume of app downloads, and the dollars earned by app developers increasing exponentially over time."
The company added that there is "nothing anticompetitive about charging a commission for others to use one’s service," citing Epic doing the same through its Unreal Engine. Apple claims that while Epic is seeking "free access to the Apple-provided tools that it uses," it also is looking to charge others for "access to Apple's intellectual property and technology."
"Epic fired the first shot in this dispute, and its willful, brazen, and unlawful conduct cannot be left unchecked," Apple said. "Neither Mr. Sweeney’s self-righteous (and self-interested) demands nor the scale of Epic’s business can justify Epic’s deliberate contractual breaches, its tortious conduct, or its unfair business practices. This Court should hold Epic to its contractual promises, award Apple compensatory and punitive damages, and enjoin Epic from engaging in further unfair business practices."
A hearing on the matter is currently scheduled for Sept. 28.