Epic fails to convince judge over Fortnite’s breach of contract – Judge hints at a trail by July 2021

Today, a federal judge, Yvonne Gonzalez Rogers of United States District Court for Northern District of California presiding over the landmark Apple vs. Epic Games lawsuit concluded the hearing with dissatisfaction over Epic’s defense and hinted that she would like the case to go to a jury trial. She also mentioned that due to her schedule the trial case will likely start by July 2021.

The developer had filed for an injunction after Apple removed the popular Fortnite app from iOS App Store due to violation of the digital store’s rules, agreed upon under the contract, by bypassing Apple and introducing a controversial Epic direct payment update on the app in August.

This particular lawsuit holds great significance for the tech industry for it will decide the implementation and scope of anti-trust laws on developers and operating system owners which has the potential to change the dynamics of digital market economies.

Epic

Epic Fails to Convince the Judge Again

Based on Epic’s weak defense arguments, it looks like the developer is not going to win an injunction. Judge Rogers seemed unmoved by the arguments and she reiterated her remarks from the preliminary ruling that the situation is of “Epic’s own making”. In response to Epic’s lawyers’ accusation that Apple has created a monopoly by controlling the iOS App Store and forcing a 30% commission rate for in-app purchases, Judge Rogers said,

“Walled gardens have existed for decades. Nintendo has had a walled garden. Sony has had a walled garden. Microsoft has had a walled garden. What Apple’s doing is not much different… It’s hard to ignore the economics of the industry, which is what you’re asking me to do.”

She also questioned the developer on how and when did the iPhone App Store become a monopoly because the rules had been the same since the digital ecosystem’s launch 10 years ago. To this, Epic had no answer.

App Store

Debating the 30% commission rate, the judge said that it’s the industry’s standard which is charged by Xbox, PlayStation, Amazon, Best Buy, Google, and others. She said, “30% is the industry rate. It’s all 30 percent and you just want to gloss over it.” When Epic argued that consoles are different for they are sold at a loss without data, the judge hammered it by commenting that, “there doesn’t seem to be evidence supporting what you’re saying,

Commenting on the developer’s conduct by “unknowingly” violating the contract, she said,

“You did something, you lied about it by omission, by not being forthcoming. That’s the security issue. That’s the 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.”

At this hearing too, Apple maintained that Epic was breaching its contract and that the App Store’s 30% commission rate used to improve the operations of the digital marketplace to deliver “safety, security, and privacy of its users.” Apple’s lawyer also said,

“Mr. Sweeney is trying to be the Pied Piper of other developers. Epic wants to cheat, breach the agreement, and sneak in software to bypass app review. A finding in Epic’s favor would be a green light to other companies and that would be very dangerous”.
The ruling ended at a sour note for Epic which might have been hoping for a better response than the previous temporary ruling. From the comments and arguments at the court, it can be presumed that the case is likely to go to a jury trial in 2021. As of now, Judge Rogers is not buying the developer’s line of argument and still holds that the company deliberately violated its contract.
Apple has shown a willingness to welcome Fortnite back on the App Store after the removal of the troublesome direct payment update but Epic has responded to every white flag with harsher retaliation. The developer not only began a social media campaign against the Cupertino tech giant but has also formed a coalition with other developers to pressurize and defame the company.
Apple has responded by publically explaining the services and benefits it provides to the consumers and developers via the App Store to justify the 30% commission rate on apple.com.
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