Epic Games asked a California court Monday to prevent Apple from further retaliating against the gamemaker following its decision to sue Apple for the way it operates its App Store.
Last week, Epic's hugely popular game Fortnite was removed from the App Store after Epic tried to circumvent Apple's 30% fee on in-app purchases. Epic then immediately sued Apple (as well as Google), alleging that the fee was a monopolistic abuse of its platform.
Now, Epic says that Apple is threatening to terminate the company's developer accounts for iOS by Aug. 28 _ a move that would affect the company's non-Fortnite business as well.
In a filing that cited Apple CEO Tim Cook's words at a congressional hearing last month that Apple "do(es) not retaliate or bully people," Epic Games alleged that Apple "has done just that."
"(W)hen Epic sued Apple to break its monopoly on app stores and in-app payments, Apple retaliated ferociously," the company wrote in the filing.
Epic claimed that Apple's move would stop Epic's ability to create software on Apple's platforms for non-Fortnite assets, like the Unreal Engine, the company's profitable visualization tool that it licenses to other developers and companies.
Epic added that Apple has never claimed Unreal Engine had violated any Apple policies, unlike Fortnite.
"Not content simply to remove Fortnite from the App Store, Apple is attacking Epic's entire business in unrelated areas," the company said. "Epic is likely to succeed on the merits of its claims, but without an injunction, Epic will be irreparably harmed long before final judgment comes."
Without an injunction, Epic added, the action will "be catastrophic for the future of the separate Unreal Engine business," if it can no longer be supported on Apple platforms.
Apple declined to comment on Epic's request for a temporary restraining order. Instead a spokesperson gave the same statement as last week, when it removed Fortnite from the Apple store.
"Epic has had apps on the App Store for a decade, and has benefited from the App Store ecosystem _ including its tools, testing, and distribution that Apple provides to all developers," Apple said in the statement. "Epic agreed to the App Store terms and guidelines freely ... . The fact that their 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."
Unreal Engine, the graphics software backing up the game, is used across a variety of industries to make 3-D renderings. Movies like the new "Star Wars" films and "Mad Max: Fury Road" have used it, for example. Brain surgeons have practiced surgery with it, and architects use it to design buildings.
Like Fortnite, Epic gives Unreal away for free, though some upgrades cost money.
The company brings in around $200 million per year through its licensing of the engine, but there is still a lot of room to grow that number, Michael Pachter, an analyst at Wedbush Securities, told The News & Observer last year.
The money from Unreal could help Epic weather the potential loss of revenue it makes from Fortnite on iPhones.
Fortnite brought in an estimated $1.8 billion last year alone, according to Nielsen's SuperData. But new players of Fortnite cannot download the game on the App Store, and those who already have it on their iPhone won't be able to update.
Will Hershey, a cofounder of Roundhill Investments, which invests in video game companies, said Epic should be able to handle an extended legal fight with Apple, without App Store revenue.
"I think they can hold out for a year or two, at least," Hershey said in an email. "Epic just raised $1.8 billion in an equity financing, $250 million of which came from Sony. They are also still generating revenues from Fortnite on PC and console, not to mention Rocket League and Houseparty, two of the company's recent acquisitions."
Epic's battle with Apple and Google is being widely watched for its implications on tech regulation in the U.S.
Matt Perault, director of the Center for Science & Technology Policy at Duke University, told The N&O last week that it could encourage U.S. and European regulators to take a more aggressive approach to Big Tech.
"By pursuing long-term injunctive relief rather than a short-term remedy or damages that would benefit only Epic, the company is showing its desire to change the landscape for the entire developer ecosystem," Perault said. "(I)t's possible that Epic's actions will provide more momentum to antitrust regulators in the U.S. and Europe."
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
