Apple says ‘Fortnite’ maker wanted ‘side letter’ to create own store

Apple has hit back at the creator of popular video game Fortnite and says it should remain banned from its App Store, claiming its chief executive allegedly asked for a ‘side letter’ to make its own game shop that would’ve upended its commission-based business model.

The company on Friday responded to a lawsuit brought by Epic Games earlier this month accusing Apple of violating antitrust laws when it removed Fortnite from its platform.  

In a filing lodged in a California federal court, Apple asked a judge to deny Epic’s request for an emergency order to restore the game.

It called Fortnite’s removal a ‘self-inflicted wound’ that resulted from Epic knowingly violating Apple’s policies.

The game was removed from both Apple and Google’s app stores last week after Epic rolled out a direct payment feature in Fortnite that charged users without paying a cut to the operating system developers. 

Apple’s App Store requires games and other apps to use its in-app payment system, which charges commissions of between 15 per cent and 30 per cent. 

Epic sued Apple over the removal, claiming the rules violated antitrust laws.

Epic asked another federal judge to issue an order blocking Apple’s removal of ‘Fortnite’ from the store, saying that the move – along with Apple’s threat to terminate the company’s developer account – would cause irreparable harm to Epic and should be put on hold while the case plays out.

Epic said the termination of its developer account could also hamper its ability to offer a product called Unreal Engine, a software tool for computer graphics that hundreds of other games and other apps use to power their offerings.

‘Epic knew full well that, in circumventing Apple’s processes and breaching its contracts, it was putting its entire relationship with Apple – including its Unreal Engine and other projects – at serious risk,’ Apple wrote in its filing. 

‘Epic made the calculated decision to breach anyway, and then run to this Court to argue that its customers were being damaged.’  

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. 

The lawsuit comes after Apple and Google came 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’ ‘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.