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The Video Game Corporate War: Epic Games vs Apple and Google

Tehdagah

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Apple joining the 21st century, small devs rejoice. Meanwhile other companies do the reverse and only reduce the sharecut for big popular games.
 
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V_K

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The new App Store Small Business Program, as it’s called, will allow any developer who earns less than $1 million in annual sales per year from all of their apps to qualify for a reduced App Store cut of 15 percent, half of Apple’s standard 30 percent fee, on all paid app revenue and in-app purchases.

This is some genius-level trolling. For all my enmity for Apple, I have to applaud them. They're stealing the high horse of "protecting the little guy" right from under Timmy while not yielding an inch to his demands. And I assume, at almost zero cost to their bottom line.
 

V_K

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And I assume, at almost zero cost to their bottom line.
Yep, from another article:
The cut should apply to an estimated 98 percent of iOS app developers that generated just 5 percent of the App Store’s revenue last year, according to analytics firm Sensor Tower.
So 15% of 5% = 0.75% net loss to Apple.
Timmy's and Spotify's butthurt also cited there is absolutely delicious.
 

J1M

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Direct result from the lawsuit. Doesn't matter how they try to spin it.
 

Infinitron

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https://www.gamesindustry.biz/artic...s-legal-action-against-apple-and-google-in-uk

Epic Games takes legal action against Apple and Google in UK
Update: Apple says Epic's "reckless behavior made pawns of customers", and it "looks forward to making this clear to UK courts"

Original Story: Epic has expanded its ongoing legal battle against Apple and Google by filing new complaints in the UK.

The US company has filed a claim to the Competition Appeal Tribunal against each of the mobile platform holders, alleging that both have "abused [their] dominant position" in the market and "engaged in anti-competitive agreements/concerted practices" in both the UK and EU.

The two filings against Apple and Google are the latest step in Epic Games' campaign to restore Fortnite to app stores and change the way mobile ecosystems operate.

The filings were filed on December 8 and 29 respectively, but have only this week been made public by the Tribunal.

Back in August, Epic Games added direct payment options to Fortnite on mobile, avoiding the 30% commission both Apple and Google require as part of their developer agreements.

Both companies then removed Fortnite from their marketplaces, to which Epic responded with anti-trust lawsuits.

Now the firm is calling on the Competition Appeal Tribunal to rule that the removal of Fortnite from these stores was unlawful, as are certain terms in their developer agreements.

Epic Games also wants Fortnite to be restored to both stores, and to be allowed to offer users the option of direct payments.

The filings are largely similar, but there are some variations in Epic's requests based on the differences between the way the two marketplaces operate.

In the case of Apple, Epic wants an order preventing the company from restricting the download of the Epic Games Store to any Apple device in the UK, and an order requiring Apple to lift the requirement that all software must been downloaded and all payments handled through the App Store.

Meanwhile, Epic is asking the Tribunal to order Google to stop imposing the pre-installation of Google Play on all Android devices in the UK and demanding that phone manufacturers prioritise this store over others.

It also wants Google to stop preventing manufacturers from entering into agreements with Epic over pre-installing the Epic Games Store.

Neither filing request damages or financial relief, although does request "such further or other relief as the Tribunal may think fit."

Back in November, a Judge dismissed Apple's claims that Epic was guilty of theft as part of this dispute, instead saying the battle should focus on breach of contract and claims of anti-trust.

Later that month, Apple reduced the commission free on sales and in-app purchases to 15% for developers earning less than $1 million per year.

Epic CEO Tim Sweeney responded that his company is "not fighting for lower commission" but for "fair competition among mobile platform companies, stores, and payment processors."

The trial between Epic and Apple is due to take place in May. Epic suggested a February trial against Google, which the internet giant tried to push back to October -- something the judge rejected.

The judge overseeing the Epic vs Apple case has warned that its ruling could have "serious ramifications" for Nintendo, PlayStation and Xbox, which also operate 'walled garden' ecosystems.

Update:GamesIndustry.biz has received a statement from Epic Games, adding that it will make its case to the Tribunal on January 21.

"We believe that this is an important argument to make on behalf of consumers and developers in the UK and around the world who are impacted by Apple and Google's misuse of market power," said VP of communcations and policy Tera Randall.

"Epic is not seeking damages from Apple or Google in the UK, Australia or the US, it is simply seeking fair access and competition that will benefit all consumers."

Update 2: Apple has also released a statement to GamesIndustry.biz, in which the company said:

“For twelve years, the App Store has helped developers turn their brightest ideas into apps that change the world. Our priorities have always been to provide customers with a safe and trusted place to download software and to apply the rules equally to all developers. Epic has been one of the most successful developers on the App Store, growing into a multibillion dollar business that reaches millions of iOS customers around the world, including the United Kingdom.

"In ways a judge has described as deceptive and clandestine, Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines that apply equally to every developer and protect customers. Their reckless behavior made pawns of customers, and we look forward to making this clear to courts in the UK.”
 

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https://www.pcgamer.com/apple-subpo...its-legal-battle-with-epic-valve-fights-back/

Apple subpoenas Valve as part of its legal battle with Epic: Valve fights back
These lawyers are getting steamed up.

GMxEZkTgBiWqxWpdeuWULb-320-80.jpg

(Image credit: Valve)

A new court filing has revealed that, as part of the ongoing legal battle between Apple and Epic Games, Apple subpoenaed Valve Software in November 2020, demanding it provide huge amounts of commercial data about Steam sales and operations going over multiple years.

A brief primer: the dispute between Epic and Apple began in August 2020, when Epic added a new payment system to Fortnite's iOS that bypassed Apple's 30 percent fee. Apple retaliated almost immediately by removing Fortnite from the App Store. Epic replied in kind by rolling out a Nineteen Eighty-Fortnite promo, based on Apple's famous 1984 Macintosh ad, and then a few minutes after that—this all happened on the same day—filed a lawsuit against Apple over Fortnite's removal. Since when there has been plenty of legal back-and-forth between the two parties.

Apple subpoenaed Valve under the basic argument that certain Steam information would be crucial to building its case against Epic, which is all about competitive practices. Yesterday a joint discovery letter was filed to the District court in Northern California relating to the subpoena, which contains a summary of the behind-the-scenes tussles thus far, and both sides' arguments about where to go from here.

Apple's argument is made by the law firm McDermott, Will and Lowery, and states that Valve is relevant to the case against Epic because "Valve’s digital distribution service, Steam, is the dominant digital game distributor on the PC platform and is a direct competitor to the Epic Game Store." Since the subpoena in November, goes Apple's argument, "Apple and Valve have engaged in several meet and confers, but Valve has refused to produce information responsive to Requests 2 and 32."

Requests 2 and 32 show some chutzpah, to say the least. Rarely will you see a finer example of lawyer-ese than this:

"Apple’s Request 2 is very narrow. It simply requests documents sufficient to show Valve’s: (a) total yearly sales of apps and in-app products; (b) annual advertising revenues from Steam; (c) annual sales of external products attributable to Steam; (d) annual revenues from Steam; and (e) annual earnings (whether gross or net) from Steam. Apple has gone as far as requesting this information in any readily accessible format, but Valve refuses to produce it."

Apple's reasoning for this request boils down to a desire to show the extent of the market that the Epic Store is competing in. Which got short shrift from Valve: "Valve has admitted to Apple’s counsel that the information requested exists in the normal course of business, but Valve simply refuses to produce it in any of the formats Apple suggested."

Now if you thought that demand from Apple was ballsy (and bear in mind Steam is a non-party to this main dispute) hold on to your hat, because Request 32 piles-on to demand documents showing:

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

That is, Apple wants Valve to provide the names, prices, configurations and dates of every product on Steam, as well as detailed accounts of exactly how much money Steam makes and how it is all divvied-up. Apple argues that this information is necessary for its case against Epic, is not available elsewhere, and "does not raise risk of any competitive harm."


Needless to say, Valve does not agree. Its counter-argument to the above says that Valve has co-operated to what it believes to be a reasonable extent—"Valve already produced documents regarding its revenue share, competition with Epic, Steam distribution contracts, and other documents"—before going on to outline the nature of Apple's requests: "that Valve (i) recreate six years’ worth of PC game and item sales for hundreds of third party video games, then (ii) produce a massive amount of confidential information about these games and Valve’s revenues."

In a masterpiece of understatement, Valve's legal counsel writes: "Apple wrongly claims those requests are narrow. They are not."

Apple apparently demanded data on 30,000+ games initially, before narrowing its focus to around 600. Request 32 gets incredibly granular, Valve explains: Apple is demanding information about every version of a given product, all digital content and items, sale dates and every price change from 2015 to the present day, the gross revenues for each version, broken down individually, and all of Valve's revenues from it.

Valve says it does not "in the ordinary course of business keep the information Apple seeks for a simple reason: Valve doesn’t need it."

Valve's argument goes on to explain to the court that it is not a competitor in the mobile space (this is, after all, a dispute that began with Fortnite on iOS), and makes the point that "Valve is not Epic, and Fortnite is not available on Steam." It further says that Apple is using Valve as a shortcut to a huge amount of third party data that rightfully belongs to those third parties.

The conclusion of Valve's argument calls for the court to throw Apple's subpoena out. "Somehow, in a dispute over mobile apps, a maker of PC games that does not compete in the mobile market or sell 'apps' is being portrayed as a key figure. It’s not. The extensive and highly confidential information Apple demands about a subset of the PC games available on Steam does not show the size or parameters of the relevant market and would be massively burdensome to pull together. Apple’s demands for further production should be rejected."

PC Gamer has contacted both Apple and Valve for comment, and will update with any response.
 

V_K

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UK suit thrown out: https://www.zdnet.com/article/uk-court-dismisses-epic-games-lawsuit-against-apple/

The UK Competition Appeal Tribunal has dismissed Epic Games' lawsuit against Apple that had accused the iPhone maker of acting anti-competitively in the app distribution and payments sector.

In the ruling, the court explained that the case was dismissed as the main target, the UK arm of Apple, provides research and development and other technical services to other companies within the Apple group, but it "does not provide support for technological or systems related issues".

Due to this, the court found the UK arm was not responsible for deciding which apps may or may not be supplied through Apple's app store and, therefore, a case could not be made that Apple's UK arm acted anti-competitively.

The court did acknowledge, however, that the dispute had merits in the United States.

"In my view, that is a significant factor in favour of the US as the appropriate forum. It is clear from even a cursory reading of the judgment of 9 October 2020, and hardly surprising, that many of the same issues of substance which arise under UK competition law arise under US antitrust law," Justice Peter Roth said.
 

Infinitron

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https://www.pcgamer.com/apple-has-s...-orders-valve-to-hand-over-steam-data-anyway/

Apple has 'salted the Earth with subpoenas,' says judge, but orders Valve to hand over Steam data anyway
Valve has until March 4 to comply.

According to the California judge overseeing Apple's attempts to drag Valve into an ongoing beef with Epic Games, Apple has "salted the Earth with subpoenas, so don't worry, it's not just you." Regardless, Thomas Hixon went on to issue a discovery order (spotted by iMore) that requires Valve to produce certain Steam information demanded by Apple, something that Valve has been doing its best to resist.

Here's a primer on the basic arguments from both sides, but the short version is that Apple subpoenaed Valve because, it says, certain Steam information will be crucial to building its case against Epic, which is all about competitive practices. Valve says the case between Apple and Epic is all about mobile, Apple is using this as a fishing expedition to obtain a bunch of third party data, and it has already shared limited information which it believes should be enough for Apple's cause.

Apple's lawyers, needless to say, disagreed. In the latest hearing it countered Valve's arguments and in the course of doing so made it explicit exactly why it's seeking to drag the company into the case against Epic. Apple's subpoena, according to judge Hixon's discovery order, "seeks information relevant to the effects of competition. Recall that in these related cases, Plaintiffs allege that Apple’s 30% commission on sales through its App Store is anti-competitive and that allowing iOS apps to be sold through other stores would force Apple to reduce its commission to a more competitive level. Well, Steam is one of the largest video game stores for PCs, and it too charges a 30% commission."

Hopefully you can see where this argument is heading: Apple is going to try and show that the emergence of the Epic Games Store did not affect the commission that Valve charges on Steam. This is because the central pillar of Epic's argument is about "monopolistic practices" and that Apple, in removing Fortnite, is looking to stifle competition. Epic is also the one that compared mobile iOS to the more open environment on Macs. But if the Epic Games Store did not make Valve lower its commission, that argument looks a lot shakier.

"Epic Games opened its video game store for PCs in December 2018, and Epic charges a commission that is lower than 30%. By focusing [request 32] on 436 specific games that are sold in both Steam and Epic’s store, Apple seeks to take discovery into whether the availability of other stores does in fact affect commissions in the way Plaintiffs allege."

Valve's argument that Apple was using it as a shortcut to all that lovely third party data was also dismissed. "The Court disagrees. Requiring Apple to subpoena each individual game developer to obtain its pricing and sales information would be an undue burden." It goes on to add that protective orders in this case should ensure adequate confidentiality (another part of Valve's argument).

Finally, Valve's case that it's a private company and this information is a competitive edge also got short shrift. "The Court disagrees with that as well. Valve’s decision to stay private means that it avoids the public company disclosure and reporting requirements, but it does not immunize the company from discovery." Thus documents produced so far which have been redacted are required to be produced without those redactions.

Apple's lawyers argued that this documentation is required by March 8, 2021, in order for it to produce arguments based on them for a hearing on March 15. The court has ordered Valve to produce the information from request 2 by March 8, which is no small deal, though it has narrowed the focus of Apple's original demand: "the Court narrows [request 2] and orders Valve to produce the per-app information only for the 436 apps available on both Steam and the Epic Games store (as providing that information broken down for all 30,000+ apps is an unnecessary burden on Valve), and to produce that within 30 days."

The other bone of contention is request 32, which wanted "(a) the name of each App on Steam; (b) the date range when the App was available on Steam; and (c) the price of the App and any in-app product available on Steam." The court granted this, but only from 2017 (Apple had requested 2015: the judge pointed out the Epic Store didn't launch until 2018). Valve is ordered to produce this information within 30 days.

It will not surprise you to know that this latest twist is far from the end of Apple and Valve's tussle, let alone the brewing battle with Epic. The case was first filed in August 2020, since when there's been a huge amount of back-and-forth, hearings and documentation. This discovery order was the 356th document produced by the case thus far, which is obviously a somewhat meaningless number but gives you an idea of the paperwork these legal eagles are generating. Valve will no doubt continue to fight its corner and appeal against this discovery order.

Apple has told PC Gamer it has no comment to make on the Valve case, though it did provide the following statement on its case against Epic in Europe.

“For twelve years, the App Store has helped developers turn their brightest ideas into apps that change the world. Our priorities have always been to provide customers with a safe and trusted place to download software and to apply the rules equally to all developers. Epic has been one of the most successful developers on the App Store, growing into a multibillion dollar business that reaches millions of iOS customers around the world, including in the EU. In ways a judge has described as deceptive and clandestine, Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines that apply equally to every developer and protect customers. Their reckless behavior made pawns of customers, and we look forward to making this clear to the European Commission.”

I've contacted Valve to ask for comment on this order and whether it will appeal, and will update with any response.
 

Perkel

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'member just a year or two ago people talking about 30% cut being only normal and companies will not be able to provide service if they don't get 30% ? I 'member along with screeching of autists defending apple/velve etc.
 
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Apple's subpoena, according to judge Hixon's discovery order, "seeks information relevant to the effects of competition. Recall that in these related cases, Plaintiffs allege that Apple’s 30% commission on sales through its App Store is anti-competitive and that allowing iOS apps to be sold through other stores would force Apple to reduce its commission to a more competitive level. Well, Steam is one of the largest video game stores for PCs, and it too charges a 30% commission."

Hopefully you can see where this argument is heading: Apple is going to try and show that the emergence of the Epic Games Store did not affect the commission that Valve charges on Steam. This is because the central pillar of Epic's argument is about "monopolistic practices" and that Apple, in removing Fortnite, is looking to stifle competition. Epic is also the one that compared mobile iOS to the more open environment on Macs. But if the Epic Games Store did not make Valve lower its commission, that argument looks a lot shakier.
...
But all of this is false.

Steam did lower their cut nearly at the same time as the launch of EGS. Maybe the jo*rnalist should try reading their own site.
https://www.pcgamer.com/valves-new-...-big-budget-games-and-indie-devs-arent-happy/

If this was meant to be a grand slam to prove that more competition wouldn't reduce the cut they take, they might want to rethink it.
 

V_K

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If this was meant to be a grand slam to prove that more competition wouldn't reduce the cut they take, they might want to rethink it.
Thing is, Valve's lower cut only applies to games that made more than $10 mil - which is, none of former EGS exclusives. And thanks to the judge, only those are included in discovery.
 

Perkel

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Thing is, Valve's lower cut only applies to games that made more than $10 mil - which is, none of former EGS exclusives. And thanks to the judge, only those are included in discovery.

There are EGS exclusive and not exclusive games that made more than $10mil. $10mil is incredibly small number for any release. Borderlands was the biggest release on Epic and it did if i remember correctly somehting like 4-5 mln.
 
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Codex Year of the Donut
Arizona house passed a bill that would prevent phone manufacturers from restricting apps that receive payments without going through the manufacturer's app store payment system.

Can't find a pdf of the legislation yet.

Epic has no involvement in this, but it's definitely related.

Suggest reading this entire twitter thread btw. The vote was along true partisan lines: those owned by corporations and those not.
 
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Perkel

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3/4 of codex thinks of themselves as either right wing or libertarians and yet when it comes to competition in pc gaming market like steam vs epic they can't see literally past their noses and all clamor to defend steam.

Proggresives defending corporations is normal as water from tap. Because progressives only care about corporations that supposedly fuck up environment or that have lack of gay spirit in them.
 

Jaedar

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Project: Eternity Shadorwun: Hong Kong Divinity: Original Sin 2 Pathfinder: Kingmaker
Will the steam data be made public, or only available to apple? Because if it's public it would be AMAZING for hobby research.
 

Perkel

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Will the steam data be made public, or only available to apple? Because if it's public it would be AMAZING for hobby research.

No.
 

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