Apple faces down ‘Fortnite’ creator Epic Games in major antitrust trial

Fortnite graphic and Apple logo displayed in illustration
FILE PHOTO: Fortnite game graphic is displayed on a smartphone in front of Apple logo in this illustration taken May 2, 2021. REUTERS/Dado Ruvic/Illustration

May 3, 2021

By Stephen Nellis

(Reuters) -Attorneys for “Fortnite” creator Epic Games and Apple Inc will make opening arguments Monday at an antitrust trial whose ultimate outcome could affect Apple’s fast-growing App Store business.

The lawsuit, which Epic brought last year in the U.S. District Court for the Northern District of California, centers on two of Apple practices that have become cornerstones of its business: Apple’s requirement that virtually all third-party software for the world’s 1 billion iPhones be distributed through its App Store, and the requirement that developers use Apple’s in-app purchase system, which charges commissions of up to 30%.

Judge Yvonne Gonzalez Rogers will preside over the three-week trial in a courtroom in Oakland, California. Apple’s legal team from Gibson, Dunn & Crutcher arrived at the courthouse Monday morning with about 20 boxes of documents, followed by Phil Schiller, Apple’s App Store chief. Epic’s legal team from Cravath, Swaine & Moore arrived with a similar number of boxes and followed by Epic Games Chief Executive Tim Sweeney.

Both executives are expected to attend the entire trial, which will also feature in-person testimony from Apple Chief Executive Tim Cook and other senior executives at both firms.

Epic broke Apple’s rules last year when it introduced its own in-app payment system in “Fortnite” to circumnavigate Apple’s commissions. In response, Apple kicked Epic off its App Store.

Epic sued Apple, alleging the iPhone maker is abusing its power of app developers with App Store review rules and payment requirements that hurt competition in the software market. Epic also launched an aggressive public relations campaign to call attention to its allegations just as Apple’s practices have come under scrutiny from lawmakers and regulators in the United States and elsewhere.

Apple has countered Epic’s allegations by arguing that its App Store rules have made consumers feel safe and secure in opening their wallets up to unknown developers, helping create a massive market that all developers have benefited from. Apple argues that Epic intentionally broke its contracts with Apple because the game maker wanted a free ride on the iPhone maker’s platform.

Epic is not asking for money damages but is asking the court to hand down orders that would end many of Apple’s practices.

(Reporting by Stephen Nellis in San Francisco and Nathan Frandino in Oakland, California; Editing by Lisa Shumaker)