Epic’s Fortnite Banned by Apple and Google: Everything You Need to Know

Would you rather have 99 small opponents than two really, really big fights? On Thursday, Fortnite publisher Epic Games was embroiled in a spat with both Apple and Google over fees charged by tech behemoths developers in their respective app stores.

Long story short: Fortnite has dropped out of both the App Store and the Google Play Store after trying the 30% fee past Apple and Google to download developers. That’s huge news, because the game has been downloaded more than 250 million times on iOS alone.

Epic countered by file lawsuits against both companies. It does not seek money from any of the companies, just that they repeat what Epic considers the monopolistic practices of the companies. And it comes at a time when both Europe and the US are control the power of Apple, Google and other tech giants.

Why did this happen?

Fortnite is a free-to-play game, meaning it’s free to download and Epic makes money from in-game purchases. Players can buy V-Bucks, in-game currency, which are used to buy new outfits, weapons and skins. It’s a hugely profitable business model. Fortnite generated $4.2 billion over 2018 and 2019.

But Epic has never approved of the 30% cut taken by Apple and Google on their respective app stories, so it set up a direct payment system allowing players to buy V-Bucks for cheaper through Epic, circumventing Apple and Google. When buying 1,000 V-Bucks, players were given a choice over paying $9.99 via the App Store or $7.99 through Epic.

Apple wasn’t having that, so it pulled Fortnite from the App Store. Google followed hours later, although Android gamers can still download the game directly through Epic — and if you previously downloaded it on iOS, you can still re-download it (you just won’t be able to update it or play new seasons). 

And now Epic is suing Apple?

It sure is.

Epic on Thursday filed a lawsuit against Apple in the North District of California court accusing Apple of anti-competitive practices for app distribution and app-related payments. It stresses it’s not looking for compensation or special treatment from Apple, but for Apple to roll-back its anti-competitive practices and allow for “fair competition.” 

“To reach iOS users,” reads Epic’s filing, “Apple forces developers to agree to Apple’s unlawful terms contained in its Developer Agreement and to comply with Apple’s App Store Review Guidelines, including the requirement iOS developers distribute their apps through the App Store. These contractual provision unlawfully foreclose the iOS App Distribution Market to competitors and maintain Apple’s monopoly.”

The filing argues that Apple, in charging a 30% fee to publishers, take 10x more than companies like “PayPal, Stripe, Square or Braintree, which typically charge payment processing rates of around 3%.” 

Apple’s full reply, in which they said the App Store is an ecosystem that benefits developers and creates a level playing field, is below.

“Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users. As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.

Epic has had apps on the App Store for a decade, and has benefited from the App Store ecosystem – including the tools, testing, and distribution Apple provides to all developers. Epic agreed to the App Store terms and guidelines freely and we’re glad they’ve built such a successful business on the App Store. The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users. We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store.”

The suit escalated on Aug. 17, when Epic said in a court filing that Apple is threatening to ban the Unreal Engine code that Epic licenses to other game developers. This would affect dozens of apps, including Fortnite’s competitor PlayerUnknown’s Battlegrounds.

“Not content simply to remove Fortnite from the App Store, Apple is attacking Epic’s entire business in unrelated areas,” Epic said in its filing. “If the Unreal Engine can no longer support Apple platforms, the software developers that use it will be forced to use alternatives.”  

Apple fired back on Friday, Aug. 21, releasing a cache of emails between Epic CEO Tim Sweeney and Apple, showing that the Fortnite maker was seeking special treatment. Specifically, Epic wanted to run a competing app store and process payments itself rather than relying on Apple’s App Store and its in-app purchase system that takes a commission of up to 30% on all sales made on an iOS app.

“Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified,” Phil Schiller, an Apple Fellow and former head of worldwide marketing, said in a statement filed with the court. “Apple has never allowed this,” Apple said in its filing. “We strongly believe these rules are vital to the health of the Apple platform and carry enormous benefits for both consumers and developers.”

Wait, what does this have to do with George Orwell?

Along with the lawsuit, Epic also released a video parodying Apple’s famous 1984 ad. Apple’s ad, released back in late 1983, promoted the upcoming launch of the Macintosh, railing against then-entrenched brand IBM. Epic’s video says Apple has become the new Big Brother of industry — a hugely powerful and overbearing entity.

This is something that Epic expounds more aggressively in its suit. “Apple has become what it once railed against: The behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.”

Damn.

What about Google?

Epic is suing Google, too. Epic followed its lawsuit against Apple hours later with a similar one against Google. Its basis is the same as Apple’s: unlawfully anti-competitive practices related to app distribution, and app-related payments. 

“Google acquired the Android mobile operating system more than a decade ago, promising repeatedly over time that Android would be the basis for an “open” ecosystem in which industry participants could freely innovate and compete without unnecessary restrictions,” the filing reads. “Since then, Google has deliberately and systematically closed the Android ecosystem to competition, breaking the promises it made. Google’s anti-competitive conduct has now been condemned by regulators the world over.”

The suit argues that Android forms an effective monopoly for phone makers, like Samsung, LG and Sony, who have no real alternative to Android for their devices. Having achieved this monopoly, Epic says, Google then restricts the ability of companies to distribute apps in a way that competes with the Play Store.

“Epic’s experience with one [phone maker], OnePlus, is illustrative, “read the pack.” Epic struck a deal with OnePlus to make Epic games available on their phones via an Epic Games app. The Epic Games app would have allowed users to install Epic games, including Fortnite, without any work without obstacles imposed by Google’s Android OS. But Google forced OnePlus to withdraw from the deal, calling Google ‘certain concerns’ about Epic over the ability to install and update mobile games, while ‘surrounding the Google Play Store’.

Like the Apple package, Epic says it does not want any payment from Google. “Instead, Epic is looking for scams that would deliver on Google’s broken promise: an open, competitive Android ecosystem for all users and participants in the industry. Such a judgment of suspicion is sorely needed.”

Before Epic filed a lawsuit against Google, Google released the following statement about its decision to withdraw Fortnite from the Play Store,

“The open Android ecosystem allows developers to distribute apps across multiple app stores. For game developers who choose to use the Play Store, we have consistent policies that are fair to developers and keep the store safe for users. While Fortnite remains available on “Android, we can no longer make it available on Play because it violates our policies. However, we welcome the opportunity to continue our conversations with Epic and bring Fortnite back to Google Play.”

What do other companies think?

Epic is by far the first to complain about anti-competitive practices by Google and Apple.

In 2018, the European Union booked Google $ 5 billion for monopolistic behavior, which included Google’s suite, such as Chrome and Gmail, pre-installed on all Android devices. Spotify claimed last year that Apple charges 30% for in-app purchases, such as Spotify Premium subscriptions, fierce competition with Apple’s own apps, in this case Apple Music. In June, the EU launched a probe into the practices of Apple’s App Store.

While the European Union has been more energetic in recent decades over regulating tech titans, the US is starting to control these giant companies in the same way. In late July, Apple CEO Tim Cook sat in a congressional hearing alongside Jeff Bezos, Sundar Pichai and Mark Zuckerberg, CEOs of Amazon and Google owner Alphabet and Facebook, respectively, in a historic anti-trust hearing.

Speaking to Congress, Cook rejected the idea that the App Store favors Apple’s own apps.

“After I started with 500 apps, the App Store now hosts more than 1.7 million – only 60 of which are Apple software,” Cook said. “Clearly, if Apple is a gatekeeper, what we have done is open the gate wider. We want to get every app we can on the store, and not keep it off.”

CNET’s Ian Sherr contributed to this report.