Apple Subpoenas Valve as Part of Legal Battle with Epic: Valve Fights Back

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Apple Subpoenas Valve as Part of Legal Battle with Epic: Valve Fights Back

As part of the ongoing legal battle between Apple and Epic Games, new court filings reveal that Apple subpoenaed Valve Software in November 2020 and demanded that it provide massive amounts of commercial data on Steam sales and operations over multiple years The filing reveals that.

Briefly, the dispute between Epic and Apple began in August 2020 when Epic added a new payment system to the iOS version of Fortnite that bypassed Apple's 30% fee; Apple retaliated almost immediately, removing Fortnite from the App Store and removed; Epic responded by promoting "Nineteen Eighty-Fortnite," based on Apple's famous 1984 Macintosh ad, and minutes later (this all happened on the same day), it filed suit against Apple over Fortnite's removal. He filed a lawsuit against Apple. Since then, there has been much legal back-and-forth between the two parties.

Apple subpoenaed Valve under the basic argument that certain Steam information was crucial to building a case against Epic regarding competitive practices. A joint discovery statement regarding the subpoena, filed yesterday in the District Court of Northern California, outlines the behind-the-scenes battles that have taken place, as well as the arguments of both sides regarding the future development of the case.

Apple's argument, made by law firm McDermott, Will and Lowery, is that "Valve's digital distribution service Steam is the dominant digital game distributor on the PC platform and a direct competitor of the Epic Game Store Since the November subpoena, Apple claims, "Apple and Valve have met several times, but Valve has refused to produce information in response to Requests 2 and 32.

Requests 2 and 32 are, to put it mildly, showing sloppiness. You will seldom see such fine lawyerly language:

"Apple's Request 2 is very narrow. It asks for documentation sufficient to show Valve's (a) annual gross sales of apps and in-app products, (b) annual advertising revenue from Steam, (c) annual sales of external products attributable to Steam, (d) annual revenue from Steam, and (e) annual revenue (whether gross or net) from Steam. We are only requesting sufficient documentation. Apple has requested that this information be provided in a readily available format, but Valve has refused.

Apple's reason for requesting this information is simply that it wanted to show the size of the market in which Epic Store competes. But Valve downplayed this: "Valve has acknowledged to Apple's attorneys that the requested information exists in the ordinary course of business, but has refused to produce it in any of the forms Apple has suggested.

Now, if you thought Apple's request was ballsy (keep in mind that Steam is a non-party to this primary dispute), hold onto your hats:

"(a) the name of each App on Steam, (b) the date range when the App was available on Steam date range when the App was available on Steam, and (c) the price of the App and in-app products available on Steam."

In other words, Apple is asking Valve to provide detailed descriptions of the names, prices, configurations, and dates of all products on Steam, as well as Steam's revenues and how they are distributed. Apple asserts that this information is necessary for its case against Epic, is not otherwise available, and poses "no risk of competitive harm."

Needless to say, Valve disagrees. In its rebuttal to the above, Valve states that it is cooperating to the extent it deems reasonable and that "Valve has already submitted documents relating to revenue share, competition with Epic, Steam distribution agreements, etc.": "Valve has submitted (i) six years worth of PC for hundreds of third-party video games reproduce game and item sales, and (ii) submit a large amount of confidential information regarding these games and Valve's revenues."

In a masterpiece of understatement, Valve's legal counsel wrote: "Apple incorrectly claims that these requests are narrow. They are not.

Apple apparently initially requested data for more than 30,000 games, but then narrowed its focus to about 600; as Valve explains, request 32 is surprisingly detailed: all versions of a particular product, all digital content and items, sale dates and all price changes from 2015 to the present, total sales for each version, broken down separately, and requested information on all Valve's revenues therefrom.

Valve has stated that "in the normal course of business, we do not keep the information Apple asks for: because Valve doesn't need it.

Valve's argument explains to the court that it is not a competitor in the mobile space (after all, this is a dispute that began with Fortnite on iOS) and points out that "Valve is not Epic and Fortnite is not available on Steam." Id. Further, he states that Apple is using Valve as a shortcut to a vast amount of third-party data that is inherently belonging to third parties.

The conclusion of Valve's argument requires the court to dismiss Apple's subpoena. Somehow, in a dispute over mobile apps, PC game makers, who neither compete in the mobile market nor sell "apps," are portrayed as important players. That is not true. Apple's request for extensive and confidential information about some of the PC games sold on Steam, which does not indicate the size or parameters of the relevant market, would be an enormous burden to compile. Apple's request for further production should be denied."

PC Gamer has reached out to both Apple and Valve for comment and will update if we hear back.

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