Home Finance Apple and 'Fortnite' Maker Epic Games to Square Off in Court

Apple and 'Fortnite' Maker Epic Games to Square Off in Court

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Apple and 'Fortnite' Maker Epic Games to Square Off in Court

A trial is slated to begin Monday between the maker of the popular videogame “Fortnite” and Apple Inc. AAPL 0.65% that could help determine of how in the future apps generate revenue through mobile devices.

Opening statements are expected to start around 8:30 a.m. PDT (11:30 a.m. EDT).

U.S. District Judge Yvonne Gonzalez Rogers is presiding over the planned three-week bench trial in Oakland, Calif.

Epic Games Inc. sued both Apple and Alphabet Inc.’s GOOG -0.78% Google in August after the companies removed “Fortnite” from their mobile app stores. They say their moves were justified because Epic broke their rules by inserting its own system for processing payments made inside the game, a move that would potentially circumvent the 30% slice of revenue that Apple and Google collect from in-app purchases.

Epic, a closely held company valued at nearly $29 billion as of last month, has asserted that Apple charges exorbitant fees to mobile software developers and runs the App Store in a way that stifles smaller businesses and prohibits fair competition. A trial date hasn’t been set in Epic’s lawsuit against Google.

Apple has said that Epic’s actions were a breach of contract and that the game company has engaged in a smear campaign. Apple also said that there are many platforms in which “Fortnite” is available, asserting that the market is mature and that it doesn’t hold anything close to a monopoly against developers.

Among those expected to take the stand Monday on Epic’s behalf is its co-founder and chief executive, Tim Sweeney, who spent months plotting his company’s attack on Apple with a team of around 200 Epic staffers, outside lawyers and public-relations advisers.

Apple’s stock-market value hit a record this year, but its longstanding disputes with app developers are bubbling over into public view. WSJ explains why high-profile companies like Epic Games, Spotify and Tinder are at odds with App Store rules. Video/illustration: Jaden Urbi/WSJ

Mr. Sweeney, 50 years old, is a seasoned programmer who prefers an office uniform of cargo pants and T-shirts. A Maryland native with a net worth exceeding $9 billion, according to the Bloomberg Billionaires Index, he has testified in court before and spoken in front of crowds at events such as Mobile World Congress and the Game Developers Conference.

Epic’s witness list also includes other company executives, former Apple employees and employees of other companies including Microsoft Corp. Apple’s witness list includes the company’s CEO for the past decade, Tim Cook, and other executives such as Phil Schiller, who leads the App Store and Apple events.

Antitrust cases can be difficult for plaintiffs to win, legal experts say, and Epic’s lawsuit may hinge on the court’s definition of a market in the digital age. Epic says Apple has a monopoly in its App Store, while Apple says it is just one of many distribution channels in the larger market for videogames and other software.

Analysts say that an appeal is likely regardless of the trial’s outcome, a possibility the judge outlined last year in hearings.

Apple faces scrutiny from regulators elsewhere over its business practices. The European Union on Friday charged the company with violating antitrust laws for allegedly abusing its control over the distribution of music-streaming apps. The case in Europe stems from a 2019 complaint filed by Spotify Technology SA, which competes with Apple’s music-streaming service. The U.K. is separately investigating whether Apple imposes anticompetitive conditions on app developers, and U.S. lawmakers have accused Apple of operating with “monopoly power.”

In response to the EU charges, Apple said Spotify has been successful even after removing paid subscriptions from its app in the App Store. Apple also said Spotify’s demand to be able to advertise alternative deals through its App Store is a practice that no stores allow.

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Write to Sarah E. Needleman at [email protected]

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Published at Mon, 03 May 2021 09:30:00 +0000

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