Last week, Fortnite developer Epic Games laid down the gauntlet by filing a massive antitrust lawsuit against the Apple App Store and Apple Pay. In my most recent column, I broke down the case, predicted how Apple would respond, and provided my initial impression as to how the case would turn out. In the days that followed, the case moved ahead at warp speed.
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Here’s a quick breakdown of what has happened:
- Outside of limited exceptions, apps on apple devices (iPads and iPhones) can only be purchased or downloaded from the Apple App store.
- All apps on the Apple App Store are required to use Apple Pay for in-app purchases of digital goods (including in-app currency, outfits, avatars, caps, and the like).
- On Aug. 13, Epic Games updated its Fortnite app to allow Apple users to make purchases without using Apple Pay. That same day, Apple removed Fortnite from the App Store. (It remains available on other platforms.) That same day, Epic filed a 62-page complaint against Apple.
- On Aug. 14, Apple issued an ultimatum: Roll back the changes within two weeks, or Apple would cut off Epic’s access to Apple’s development tools. This would functionally prevent any developer from using Epic’s Unreal Engine on Apple devices.
- On Aug. 17, Epic Games filed a motion for a temporary restraining order seeking to require Apple to put Fortnite back on the App Store and to prevent Apple from revoking Epic’s access to development tools. Epic argued that it was likely to prevail in the case and that Epic, Fortnite users, and third-party developers who rely on the Unreal Engine would be irreparably harmed by Apple’s actions.
- On Aug. 21, Apple responded. It argued that Epic Games’ harm was self-inflicted, since Epic chose to breach its agreement with Apple, that there is “minimal public interest” in providing access to video games, and that the interchangeability of gaming and app platforms means that Apple does not yield monopoly power in any relevant market.
- On Aug. 24, the court issued its decision on Epic Games’ temporary restraining order. This was the first time the court has weighed in on the strength of Epic’s case. It agreed with Apple that any harm Epic experienced was Epic’s fault for breaching its contract with Apple. It further concluded that Epic had not shown a strong likelihood of success on the merits. However, at the same time, the court concluded that the dispute “should not create havoc to bystanders.” Thus, the court held that — for now — Apple can keep Fortnite off the App Store, but it cannot prevent third-party developers (including an international Epic affiliate) from accessing Apple’s developer tools.
What Does It All Mean?
There are a few things to keep in mind when looking at the events to date:
- Relative to the way things normally work, this case has moved at hyper speed. Epic Games isn’t the first or only company to challenge Apple’s App Store practices. The fact that the case could go from filed to judicial decision in a little over a week is crazy.
- While the decision sets the stage, it does not have any binding effect on the rest of the case. The decision was only made with regard to Epic’s motion for a temporary restraining order, and the court made clear that both parties had competitive positions. In other words, we can’t really look at the court’s decision as a reliable prediction of how the case will turn out, once all the dust settles.
- From here on out, things should slow down quite a bit. The temporary restraining order will only last a few months. The next major step is for the parties to present arguments as to whether the court should grant a preliminary injunction. The preliminary injunction — if granted — would last through the duration of the case. It’s likely to last several years. While the preliminary injunction proceedings will be expedited, they will still be much slower than what we have seen to date. Think months, not days.
This is only the beginning.
