A judge Would Stop Apple's decision to block Epic's Unreal Engine, declaring that she saw "no competition" at the Apple Ap...
A judge Would Stop Apple's decision to block Epic's Unreal Engine, declaring that she saw "no competition" at the Apple App Store on the iPhone
The legal battle between video game development studio, Epic Games, and Apple continues with repercussions for game developers using Epic's Unreal engine. Monday's hearing focused on whether the privileges of Epic's developers should be legally protected - initially by a temporary restraining order, paving the way for a stronger preliminary injunction that would remain in effect throughout the trial, Reuters reported.
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Epic's antitrust lawsuit against Apple earlier this month and the accompanying social media campaign have become the biggest challenge for Apple's App Store. The maker of the popular battle game "Fortnite" alleges that Apple engaged in anti-competitive behavior by abusing its dominance in the iPhone application market. Fortnite was removed from the App Store on August 13, in response to Epic Games' introduction of a new program that bypassed Apple's mandatory payment system. Apple has also taken steps to restrict Epic's ability to work on the Unreal engine, which is widely used by third-party game developers.
Apple threatens to terminate Epic's inclusion in the Apple Developer Program, a subscription required to distribute applications on iOS devices or use Apple development tools, if the company does not remedy its "violations" of the agreement within two weeks, according to a letter from Apple to Epic. Epic will also not be able to notarize Mac applications, a process that could make it more difficult to install Epic software or block it completely. Apple requires all applications to be notarized before they can run on newer versions of MacOS, even if they are distributed outside the App Store.
On August 17, Epic filed a preliminary injunction application against Apple, asking the court to prevent the company from blocking Apple's actions. Epic says it will be "irreparably harmed long before the final judgment" if it does not obtain the injunction. "Apple's actions will irreparably damage Epic's reputation among Fortnite users and will be catastrophic for the future of the separate Unreal Engine business," Epic said. Epic is also requesting that Fortnite, with its discounted pricing and alternative payment option, be put back on the App Store.
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According to Reuters, Yvonne Gonzalez Rogers, a federal judge, said at the first hearing in the case, held Monday by Zoom due to the distancing measures, that she saw Epic's request through "two lenses. One of them concerned the harm that would be caused to Epic's own games, which have been removed from the App Store. The other was the harm that would be caused to the hundreds of other games that would be affected if Epic was unable to maintain its Unreal Engine software because Apple had terminated all of the company's development contracts.
The judge said at the hearing that she was "inclined" to grant Epic Games' request to block Apple's decision to close the developer accounts of Fortnite's creator and said she saw "no competition" to Apple's App Store on the iPhone. However, for Fortnite itself, the judge's decision, which will be handed down at a later date, may not change its current status on the App Store. "I can tell you right now that I'm inclined not to grant a fix for the games, but I'm inclined to grant a fix for the Unreal engine," said Gonzalez Rogers.
The Unreal Engine is a computer graphics software tool that hundreds of other games and applications use to power their offerings. Judge Rogers did not render an immediate decision on the matter, but stated that she would issue a written order after the fact "and I will issue it quickly". It should be noted, however, that Judge Rogers did not appear to know which party would be successful on the merits of the case, which will affect the granting of the injunction. "This is not something that is a "slamdunk" for Apple or Epic Games," she said.
We can't just push a button and go back to an anti-competitive environment.
In Sunday's motion, Epic said several Unreal Engine users, including at least one automotive design company, contacted the company with concerns that their projects could be disrupted. Epic believes that removing support would be unnecessarily punitive, affecting developers who rely on Epic's engine but have no vested interest in the case. "The scale of Apple's retaliation is in itself an illegal effort to maintain its monopoly and to appease any action by others who would dare to oppose Apple," the motion states.
Supporting Epic in the filing, a Microsoft executive testified that revoking Epic's ability to maintain the Unreal engine would cause significant problems for iOS versions of games using that engine, including Microsoft's Forza. Any developer using the engine would not be able to fix security holes or bug fixes once access is revoked, interrupting support for a wide range of games.
"Epic's Unreal Engine is one of the most popular third-party game engines available to game creators, and in Microsoft's opinion, there are very few other options available to licensees with as much functionality as Unreal Engine on multiple platforms, including iOS," said Kevin Gammill, General Manager, Gaming Developer Experiences at Microsoft.
But Apple says it is within its rights to remove developers who violate the rules of the platform, which Epic has clearly and deliberately done. "Developers who try to cheat Apple, as Epic has done here, are fired," the company said in a deposition last week.
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The judge was particularly interested in Epic's role in the current crisis, and the company's ability to restore its iOS privileges by simply restoring the pre-August version of the application, that is, without Apple's in-app payment circumvention measures. "So far," said Judge Rogers, "I have heard nothing to suggest that they cannot simply revert to the August 3 version.
But Katherine Forrest, representing Epic, responded by saying, "We can't just push a button and go back to an anti-competitive environment. "There is no technical reason why this can't be done, but it's something the law does not and should not require.
Judge Rogers was also much more skeptical at the hearing about Apple's efforts to restrict Epic's ability to maintain the Unreal Engine: "This appears to me to be retaliation, and I see no harm in Apple preventing you on this platform without having to impact Unreal Engine," said Judge Rogers. "It seems to me that's a bit of an exaggeration," she added.
Apple representative Richard Doren's response was not long in coming. As usual for Apple, he defended the company's decision by citing Apple's long-standing App Store policies to respond to developers who don't comply with its terms. "When Apple deals with an entity that violates its contracts, its practice is to terminate the accounts of all related parties," Doren said. "The reason Apple does this is so that it doesn't become a shell game.... The fear is that the wrongdoing will simply be transferred to another Epic entity".
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Gonzalez Rogers also highlighted Apple's ban on downloading iPhone applications outside the App Store in an exchange with Richard Doren, Reuters reported. "There is no competition. The question is, without competition, where does the 30% (App Store commission) come from? Why isn't it 10? 20? How does the consumer benefit, you (Apple) can say whatever you want it to be," she asked.
According to Reuters, Doren replied that consumers have a choice when they decide to buy an Android device or an iPhone. "Competition is in the front end of the market," he said, reiterating an argument that was central to Apple CEO Tim Cook's defense at the congressional antitrust hearings. There is "a lot of economic theory" to show that switching brands imposes costs on consumers, the judge said. Doren went on to say that Apple would prove at trial that "people change brands all the time.
Forrest also pointed out the damage caused by the limited capabilities of the Unreal engine on iOS, as many developers had sought the engine specifically for its cross-platform capabilities. "It will no longer be a usable engine," said Epic's attorney. "Developers are running away from the Unreal Engine. That's what's happening now. It's not speculation.