Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Fortnite maker sues Apple, Google after removal of game from app stores

Published 08/13/2020, 03:51 PM
Updated 08/14/2020, 01:25 AM
© Reuters. FILE PHOTO: The Apple Inc logo is seen hanging at the entrance to the Apple store on 5th Avenue in New York

© Reuters. FILE PHOTO: The Apple Inc logo is seen hanging at the entrance to the Apple store on 5th Avenue in New York

By Stephen Nellis and Munsif Vengattil

(Reuters) - Apple Inc (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) Inc's Google on Thursday removed popular video game "Fortnite" from their app stores for violating the in-app payment guidelines, prompting developer Epic Games to file federal antitrust lawsuits challenging their rules.

Apple and Google cited a direct payment feature rolled out on the Fortnite app earlier in the day as the violation.

Epic sued in U.S. court seeking no money from Apple or Google, but rather injunctions that would end many of the companies' practices related to their app stores.

"Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear," Epic said in its lawsuit, filed in the Northern District of California.

Epic also attacked Apple on social media, launching a campaign with the hashtag #FreeFortnite, urging players to seek refunds from Apple if they lose access to the game, and creating a parody of Apple's famous "1984" television ad.

In the parody, which quickly garnered hundreds of thousands of views, a female Fortnite fighter hurls a unicorn-shaped club to smash a screen on which an Apple-headed character speaks of "the anniversary of the platform unification directives."

Apple takes a cut of between 15% and 30% for most app subscriptions and payments made inside apps, though there are some exceptions for companies that already have a credit card on file for iPhone customers if they also offer an in-app payment that would benefit Apple.

Analysts believe games are the biggest contributor to spending inside the App Store, which is in turn the largest component of Apple's $46.3 billion-per-year services segment.

In a statement, Apple said Fortnite was removed because Epic had launched the payment feature with the "express intent of violating the App Store guidelines" after having had apps in the store for a decade.

"The fact that their (Epic) business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users," Apple said.

Google also removed "Fortnite" from its Play Store, but the company's spokesman Dan Jackson declined to comment on the lawsuit when contacted by Reuters.

"However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play," he said in a statement. Jackson said Epic violated a rule requiring developers to use Google's in-app billing system for products within video games.Apple and Google were among the major American technology companies to come under anti-competition scrutiny in a hearing before lawmakers last month.

During the hearing, Apple Chief Executive Tim Cook argued that Apple is not anti-competitive because it does not have majority share in any markets where it operates, including mobile phones, where devices powered by Alphabet Inc's Android have greater market share.

Epic's lawsuit, however, argued that app distribution and in-app payments for Apple devices constitute their own distinct market for anti-competition purposes because Apple users rarely leave its "sticky" ecosystem.

Epic's free-to-play battle-royal videogame "Fortnite" has reached massive popularity among young gamers since its launch in 2017, and competes with Tencent Holdings (OTC:TCEHY)' "PlayerUnknown's Battlegrounds".

The title's removal from the App Store means that new players will not be able to download it and that existing players cannot receive updates, but the game should continue to work on devices where it is already installed.

Epic Games does not disclose how many iOS users "Fortnite" has. Many fans play the game primarily on PCs or gaming consoles while using their mobile phones as a backup, but iPhone users generate far more revenue for Epic.

In both Apple's App Store and Google's Play Store, "Fortnite" had about 2 million downloads in July 2020, according to mobile analytics firm SensorTower. But Apple users spent about $34 million while Android users spent only $2 million, according to SensorTower data.

Because Android functions differently from iOS, users can still download "Fortnite" from Epic's website and other non-Google stores such as the one run by Samsung Electronics (OTC:SSNLF) Co Ltd and install it on their devices, Epic said in a blog post on Thursday.

"Epic is not seeking any monetary relief, but rather only an order enjoining Google from continuing to impose its anti-competitive conduct on the Android ecosystem," it said in its lawsuit.

In a statement, Spotify Technology SA (NYSE:SPOT), a streaming music rival to Apple that has filed an antitrust complaint against the iPhone maker in Europe, applauded Epic's move.

"Apple's unfair practices have disadvantaged competitors and deprived consumers for far too long," Spotify said.

© Reuters. FILE PHOTO: An attendee stops to text next to Epic Games Fortnite sign at E3, the annual video games expo revealing the latest in gaming software and hardware in Los Angeles

Latest comments

Epic is breaking the Federal courts and thinking it is legal.
Move Epic to China!
Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear," Epic said Look who's talking...EPIC for those of you who are not in the know of gaming EPIC for the last 4 years has tried to destroy STEAM by doing exactly what google and apple are doing just in different scenarios. Talk about hypocrisy.  I have no sympathy for Epic.  Some more tidbits for you   Tim Sweeney (>50%) Tencent (40%) Company shares.
I think pricing is a different matter but bypassing apple's payment system is plainly wrong. imagine you're at Best buy, every product on the shelf is unique with a link/qr code for purchase. lol! apple software made it possible for these games to exist, not the other way around. if they don't like apple taking any cut at all, try to make a console and see if GameStop is willing to host your game and console with 0 commission.
Why do they have to give 30% of their subscription revenue to Apple if the app is downloaded from App Store?
to play on Apple devices of course.
Apple is greedy, end of story
signed an agreement, you knew the terms, good luck
Fortnite needs to go away.
Then just sell your *******game on android. Apple by no means has a marketplace monopoly.
No but they got it on their platform. Epic is already selling on Android but obviously they want to sell to iPhone users as well.
Plopseven I have an android phone I left Apple after they bricked my iPhone 4 which they were sued over and lost. I loathe the company. Every retailer that allows you access to their platform charges exorbitant fees. Walmart, Amazon marketplace et cetera. Amazon's is downright predatory. They are not a monopoly.
Exactly. There are only like five options for you and they all ****** That’s why they are *all* being investigated - together.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.