fortnite vs. apple lawsuit

Apple files counter-suit against Epic in Fortnite lawsuit

Jessica S. September 9, 2020

Apple has raised the stakes in the battle with Epic Games over the iOS version of Fortnite with a countersuit. 

The 67-page document lays out Apple’s defense to the suit and claims that the company suffered damages that almost equate to the original complaint filed by Epic. 

Apple is asking the court for the following relief:

  • Decree that Epic is liable for breach of its contractual obligations under the License Agreement;
  • Decree that Epic is liable for breach of its implied covenant of good faith and fair dealing;
  • Decree that Epic is liable for intentional interference with Apple’s prospective economic advantage;
  • Decree that Epic is liable for negligent interference with Apple’s prospective economic advantage;
  • Decree that Epic is liable for conversion of Apple’s property;
  • Decree that Epic is in violation of the California Unfair Competition Law;
  • Award Apple compensatory damages, punitive damages, attorney’s fees, and interest;
  • Award restitution and disgorgement of all earnings, profits, compensation, benefits, and other ill-gotten gains obtained by Epic as a result of its conduct;
  • Bar Epic from using unauthorized external payment mechanisms in its apps.

While most of these requests boil down to “tell Epic it is wrong”, the biggest impact these requests have is the compensatory damages, punitive damages, attorney’s fees and interest. This means that if Apple were to win the suit, Epic would have to abide by its original contract, pay any actual damages, and possibly pay punitive damages. 

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Punitive damages are awarded to the successful party that are meant as punishment, similar to when a person gets a traffic ticket and must pay a fine as punishment. 

"Epic’s lawsuit is nothing more than a basic disagreement over money. Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store,” Apple’s defense reads.

Apple argues that the 30% cut it gets from Fortnite’s sales is fair. In its response, Apple’s league team cites that Epic has made over $600 million in profits from the app, which means that sales are close to $857 million, leaving Apple with $257 million in profits. 

By comparison, Epic only takes a 12% commission on games sold in the Epic Games Store, but Apple suggests 30% is a more common rate in the industry.

While settlement is always an option in litigation, a jury trial has been requested and the next steps will involve court hearings, and eventually jury selection. Lawsuits often take years to resolve and it is likely that Epic and Apple will settle out of court before a trial ever commences.

Given how successful Fortnite is on iOS devices, neither company would benefit from prolonged downtime.