Apple and Epic Games enter high-stakes court battle that could change the iPhone and App Store forever



Video game publisher Epic Games goes to battle with Apple today over the iPhone maker’s decision to remove Fortnite from its App Store. If Epic wins, Apple might be forced to change its iOS software and business practices that some developers say have made the App Store a de facto monopoly.


The court fight, which is overseen by U.S. District Judge Yvonne Gonzalez Rogers, is expected to play out over three weeks and feature testimony from Apple CEO Tim Cook, Epic head Tim Sweeney and other high-ranking executives at the two companies. This is Apple’s first significant legal challenge since 1989, when Xerox sued the firm for violating copyright related to the Apple Lisa and Macintosh computers. Apple largely won that fight, but today’s stakes are even bigger. Its App Store, which works seamlessly with the iPhone and Apple’s iOS hardware, is a $100 billion market. Depending on the outcome, the case could dent Apple’s brand and give competing app stores access to the iPhone market.


The conflict now in play in court kicked off last summer when Epic, creators of the popular game Fortnite, implemented a direct payment mechanism in the iPhone version of the game that bypassed the 30% commission fee Apple collects for in-app purchases made within apps purchased on its App Store. 


Apple responded to the alternative payment option by booting Fortnite from the App Store for violating store rules. Epic responded instantly with a lawsuit in which it claimed “Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power” to maintain a monopoly. 


Epic says the case isn’t about profit — the hit game made about $700 million in the two years it was sold on the iOS store before being yanked by Apple.


Apple’s “walled garden”


The video game publisher argues that the iPhone platform is a unique market that Apple unfairly controls because it owns the App Store, the iOS software and the iPhone. This platform structure gives Apple an edge, according to Epic, because consumers are required to use the iPhone payment processing system, which prevents developers from collecting payment directly. Developers in turn have no choice…

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