Apple Fires Back at Epic in Counterclaim for Punitive Damages

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Apple Fires Back at Epic in Counterclaim for Punitive Damages

Epic Games sued Apple in August, claiming that app developers are requiring Apple to allow them to use the payment system built into the iOS App Store, from which Apple gets 30% of all revenues. The request to force Apple to return Fortnite to the store was denied, but a restraining order preventing Apple from blocking access to the Apple account for Unreal Engine development was also sought and granted.

Today, Apple filed a counterclaim (via Polygon) in which it states that Epic's complaint is "nothing more than a basic disagreement over money."

"Epic portrays itself as a modern-day corporate Robin Hood, when in reality it is a multi-billion dollar corporation that simply does not want to pay anything for the tremendous value it derives from the App Store... Epic's demands for special treatment and cries of 'retaliation' are akin to taking fees from game developers' sales to cannot be reconciled with its blatant breach of contract and its own business practices, which have profited billions of dollars by taking and charging consumers up to $99.99 for a bundle of "V-Bucks."

The counterclaim contains language used in Apple's motion in opposition to Epic's request for an injunction, stating that "as a direct result of Apple's investment" in the "tools, technology, software ,

But the claim is repeated that Epic was willing to take advantage of the "tools, technology, software, marketing opportunities, and customer reach" available through the App Store, which had grown into a "huge and diverse marketplace" "as a direct result of Apple's investment.

However, after Epic's failed attempts at a special deal, the studio has been forced to move forward with updates to Fortnite that would allow users to purchase V-Bucks directly from Epic, and "as Epic CEO Tim Sweeney had previously threatened, " . resorted to self-help and subterfuge, including a calculated and pre-packaged campaign against Apple 'from a variety of creative, technical, business, and legal aspects.'"

"Apple does not have a monopoly on the relevant market; competition within and outside the App Store is fierce at all levels, including devices, platforms, and individual apps," the counterclaim states. 'Fortnite users can dance the floss, ride sharks, and use V-Bucks on more than six different mobile, PC, and console gaming platforms.' [The business practices that Epic accuses of being exclusive and restrictive (including the App Store's "technical limitations" that have existed since the App Store's debut in 2008) have made the App Store an engine of innovation and have made the number and diversity of apps, app downloads, and the amount of money app developers The amount of money app developers earn has increased exponentially over time. During that time, Apple's fees have only decreased while software prices have plummeted and barriers to entry have disappeared"

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There is a point-by-point response to Epic's claims in its first lawsuit (see here for Epic's arguments), but in essence, Apple wants Epic to admit breach of contract and to be liable for, among other things, intentional and negligent interference with Apple's future economic interests Apple wants Epic to admit breach of contract and hold it liable for, among other things, intentional and negligent interference with Apple's future economic interests. It seeks "compensatory damages, punitive damages, attorneys' fees, and interest," as well as a permanent injunction against the operation of the external payment system in Fortnite.

"Epic fired the first shot in this dispute, and its willful, brazen, and illegal conduct cannot go unchecked; neither Sweeney's self-righteous (and self-serving) demands nor Epic's business scale justify Epic's intentional breach of contract, tortious conduct, and unfair business practices. The Court finds that Epic's intentional breach of contract, torts, and unfair business practices cannot be justified. The Court should "compel Epic to honor its contractual commitments, award Apple compensatory and punitive damages, and enjoin Epic from engaging in any further unfair business practices. "

The trial between Epic and Apple is scheduled to resume on September 28.

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