Fortnite Maker Sues Apple and Google Over App Store Dispute

(Bloomberg) -- Apple Inc. and Google removed Fortnite from their app stores on Thursday, prompting lawsuits by the game’s creator, Epic Games Inc. The moves escalate a dispute between the companies that had been brewing in recent weeks.

Previously: Epic Games Challenges Apple, Google Stores With Direct Payment

The disagreement stems from a longstanding Apple App Store rule saying most apps must offer billing through Apple and pay the company 30% of revenue. On Thursday morning, Epic began offering customers a way to directly buy items for Fortnite and circumvent the fees. Hours later, Apple pulled the app, and Google followed suit later in the day.

Apple said in an emailed statement it removed Fortnite because Epic’s changes had the “express intent of violating the App Store guidelines.” Apple said its store helped enable Epic’s success over the last decade and that it offers a “level playing field” for businesses. Google issued a similar statement but noted that Android allows for multiple app stores, unlike the iPhone.

Epic filed a lawsuit in a California district court, alleging that Apple’s stranglehold on its app store and related customer payments is anti-competitive. Epic said it isn’t seeking money but for Apple’s practices to be stopped. If not for Apple’s “illegal restraints,” Epic would provide a competing app store on Apple devices, according to the lawsuit. It filed a complaint against Google hours later, accusing the search giant of anticompetitive behavior.

Fortnite, Epic’s flagship game, is a cultural phenomenon. The game has had more than 350 million players over the years, the lawsuit said. The game’s removal from the App Store means losing access to more than a billion iPhone and iPad customers. Sales through Apple’s store generated $32.8 billion for developers in the first half of 2020, up more than 20% from a year earlier, according to market research firm Sensor Tower.

Grievances over the fees Apple charges developers have reached a boiling point. For years, developers have complained about Apple’s 15% to 30% fees for the App Store, and Chief Executive Officer Tim Cook was recently grilled over the issue at a U.S. Congressional hearing alongside other technology chiefs. Apple is also facing scrutiny from officials in Europe over antitrust complaints, an investigation that Epic CEO Tim Sweeney has openly supported. Spotify Technology SA, which has waged a similar battle with Apple, said in a statement it supports Epic’s crusade.

Sweeney has also criticized Google, which maintains a similar policy as Apple. He described the two companies as a duopoly in an interview with Bloomberg Television last month.

Epic told customers on Thursday it would begin offering a direct purchase plan for items in Fortnite and that instead of paying fees to Apple and Google, it would pass on the savings to customers. Epic offered discounts of as much as 20% through its service. Google said in an emailed statement the move violated its store policies but that Fortnite is still available through other means on Android.

Epic’s lawsuit against Apple invokes George Orwell’s “1984.” Shortly after Fortnite was pulled, the game’s official Twitter account promoted a new video short called Nineteen Eighty-Fortnite, a cheeky shot at a famous Apple advertising campaign.

The Apple case is Epic Games Inc. v. Apple Inc., 20-cv-05640, U.S. District Court, Northern District of California (San Francisco).

(Updates with Google removal in the first paragraph)

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