Apple, Epic Games Trade Jabs in Latest Hearing Over Fortnite, Unreal Engine

U.S. District Court Judge Yvonne Gonzalez Rogers heard arguments from both Epic Games and Apple about Unreal Engine and Fortnite, at a hearing on Monday. 

Epic lawyers asked the court to reconsider a previous rejection to reinstating its popular battle royale game Fortnite to the Apple App Store for iOS devices, while Apple asked the court to reverse its previous protections to Epic’s developer program status related to Unreal Engine.

There was an exchange on tying, a reference to the Sherman Act antitrust law that Epic included in its lawsuit against Apple. In it, Epic claimed that Apple is “tying the App Store in the iOS App Distribution Market to In-App Purchase in the iOS In-App Payment Processing Market.” 

There was a fair amount of discussion on that particular topic from both sides.

Epic said that Apple, through the required use of in-app purchases in the Apple App store, has created a monopoly that harms competition and causes harm to consumers through inflated pricing.

Rogers did not seem to be persuaded with the argument, saying that she doesn’t think that the in-app purchase system is a “separate product” that Epic’s allegations of tying would imply.

“At the end of the day… this is simply an element of the App Store, which is an element of the iPhone. It is a fully integrated product,” Apple said.

But the most contentious moments in the more than two-hour hearing came when Epic was discussing why Fortnite was pulled from the app store. As Epic tried to lay out the events that led to the game being pulled from the App Store, Rogers at times admonished Epic’s counsel.

At one point she said that Epic “lied” and accused the company of being dishonest for implementing the hotfix that added its own payment method into the iOS version of the game,  despite being warned by Apple not to do it. Apple referred to the hotfix as a “security” issue. 

“There are a lot of people in the public who consider you guys heroes for what you guys did, but it’s still not honest,” she said, adding later, “You did something, you lied about it by omission, by not being forthcoming. That’s the security issue. That’s the security issue.”

“There’s that old saying, ‘A rose by any other name is still a rose.’ You did it yourself. It’s self-help.”

Epic also argued about Unreal Engine, noting that reversing a previous ruling would affect not only thousands of developers, but millions of consumers who use the products created with the game development platform. Epic also said that licensees have expressed concerns about the uncertainty of the engine on iOS, given the legal proceedings.

Rogers closed the hearing by laying out the schedule for trial, noting that because of another case taking place in June of next year that a trial wasn’t likely to begin until sometime in July of 2021. She also encouraged Apple and Google to consider a jury trial. Epic is looking for a bench trial, saying that impaneling a jury might be hard to do given COVID-19, but Rogers fired back that the court is picking jurors now, even in the face of uncertainty.

Both parties were given until the close of business at 5 p.m. PT on Tuesday to decide what kind of trial they want.

The judge closed the hearing by saying that a written order would be forthcoming on today’s hearing, but did not provide a timeline.

The battle between Apple and Epic Games over Fortnite and in-app purchases began in August when the developer added a direct payment method for users to purchase in-game content that circumvented Apple’s built-in payment system. Apple said at the time that this was a breach of contract. This ultimately led to Apple removing the game from the App Store, and then taking aim at Unreal Engine 4, Epic’s game development platform used by hundreds of mobile games including PUBG MOBILE and Peacekeeper Elite.

In late August, Rogers ruled in favor of Epic when it came to Unreal Engine and its app developer status, but also ruled in favor of Apple on its removal of Fortnite, which the judge categorized as a “self-inflicted wound” because it could be remedied by Epic simply by removing the update to the game that added the additional payment method.

Editor’s note: Some quotes in this article were provided by CNN tech reporter Brian Fung, who chronicled much of the hearing on social media due to the limitations on attendance during the court’s zoom conference.

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