Epic Games Sues Apple After for Pulling Fortnite from App Store

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  • Bloomberg QuickTake News provided this coverage of Epic Games suing Apple Inc after the iPhone maker pulled Fortnite from its App Store.

    Apple Inc. removed Fortnite from the App Store on Thursday, prompting a lawsuit by the game’s creator, Epic Games Inc. The moves escalate a dispute between the two companies that had been brewing in recent weeks.

    The disagreement stems from a longstanding 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. Google followed suit later in the day.

    Apple said in an emailed statement that 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.

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

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    In This Story: Apple Inc

    Apple Inc. is an American multinational technology company headquartered in Cupertino, California. It is considered one of the Big Tech technology companies, alongside Amazon, Google, Microsoft, and Facebook.

    Well known products and services from the brand include the iPad tablet computer, AirPods wireless earbuds, iOS, iTunes, the Safari web browser, Apple Music, iCloud and Apple Pay.

    Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976. Apple went public in 1980. In August 2018, Apple became the first publicly traded U.S. company to be valued at over $1 trillion and just two years later in August 2020 became the first $2 trillion U.S. company.

    The company employs 137,000 full-time employees and maintains 510 retail stores in 25 countries as of 2020.

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    Timothy Donald Cook is the chief executive officer of Apple Inc., and previously served as the company’s chief operating officer under its cofounder Steve Jobs.

    Cook joined Apple in March 1998 and was made the chief executive on August 24, 2011, prior to Jobs’ death in October of that year.

    Since 2011 when he took over Apple, to 2020, Cook doubled the company’s revenue and profit, and increased its market value from $348 billion to $1.9 trillion.

    In 2014, Cook became the first chief executive of a Fortune 500 company to publicly come out as gay. Cook also serves on the boards of directors of Nike, Inc., the National Football Foundation, and is a trustee of Duke University. In March 2015, he said he planned to donate his entire stock fortune to charity.

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