Monday, August 17, 2020

Epic Games asks district court to order Apple to keep Fortnite on App Store and end user devices, and to enable further development of Unreal Engine for iOS and Mac

Epic Games' antitrust action against Apple in the Northern District of California is so fresh the iPhone maker hasn't even appointed counsel yet--and the Fortnite publisher is already urging the court to make a far-reaching decision of temporary effect. Epic filed and published (PDF) a motion for a temporary restraining order (TRO), which it would like the court to issue as early as today, and which would (if granted) have to be replaced by a preliminary injunction (PI) within a couple of weeks as a TRO, which courts can issue without hearing the other party, is meant to provide some ultra-short-term protection only.

Epic's argument for this incisive and instantaneous court order is based on both Apple's decision to remove Fortnite from the App Store (which in a next step could entail the removal of Fortnite from end user devices) and a 14-day ultimatum Apple gave Epic to "cure[]" its "violations" of the Apple Developer Program License Agreement, threatening otherwise to terminate that contract. Epic tells the court that termination of its developer program license agreement would have effects going beyond Fortnite (with respect to which Epic showed the court a variety of user comments and messages reflective of confusion surrounding the game's future on iOS devices): it would also affect Epic's ability to further develop the Unreal Engine (which many action games are built on) for iPhones, iPads and Macs.

The "retaliatory" actions by Apple that Epic would like the court to prevent for the duration of this litigation would undoubtedly have huge impact on Epic's business. My app development company relies on Unity, not the Unreal Engine, but just the abstract notion of the same happening to Unity scares me. At the same time, for the sake of a balanced perspective, Apple didn't really have an alternative to the actions it has taken. If Apple had condoned Epic's clear breach of its contracts with Apple (contracts that Epic argues contain terms Apple imposed by virtue of its market power and that Epic wants the court to hold to violate the antitrust laws),

  1. Apple would have appeared to agree with Epic that the disputed contract terms are unenforceable, and

  2. other developers would have been encouraged to take similar steps (offering in-app payments circumventing the in-app payment system Apple operates in connection with the App Store).

In other words, don't attribute to malice what can be adequatedly explained with a need for Apple to act consistently with its own legal perspective. And while Epic's motion describes the balance of hardships only from a Fortnite and Unreal Engine vantage point, the court order it's seeking could actually encourage a number of other developers--including some very large ones--to breach their contracts with Apple, at least if they have the wherewithal to afford a legal spat with Apple in the same district.

The court will base its decision on a mix of a prima facie assessment of who's more likely to prevail (which Epic obviously suggests is beyond doubt, still takes Epic dozens and dozens of pages to argue) and the aforementioned balance of hardships.

My guess is Judge Edward Chen will be unconvinced of the need for issuing a TRO without giving Apple the chance to respond. Apple's August 14 notice to Epic regarding the developer agreement sets a 14-day deadline. And while Fortnite gamers are used to getting new content rather frequently, a couple of weeks won't make a difference in that regard either. Therefore, I believe the court is likely to hold a preliminary injunction hearing, possibly on very short notice, or at least a TRO hearing before enjoining Apple in any way. Epic really hasn't made the case for an ex parte TRO as far as I can see. I'm not taking a position on the merits of Epic's complaint (see 1, 2, 3, and 4) here, and not even on its prospects for securing a PI.

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