The IT Nerd

The title was a reference to the video game Mortal Kombat where if you beat an opponent without getting hit once, you earn a “flawless victory.” That’s now what Apple is looking for as it seems like it wasn’t enough that Apple largely won the lawsuit against Epic games. It wants a “flawless victory”:

On Friday night, Apple announced it would ask for a stay on a judge’s September order saying Apple would have to allow apps to direct customers to external websites. That ruling would let app businesses circumvent Apple’s requirement to facilitate payments only inside of apps, where Apple takes up to a 30% cut. Apple is also appealing the ruling. Because Epic Games is also appealing the nine counts it lost, it could take years before the case is resolved and Apple is forced to make any changes to iOS, the operating system for iPhones, as the two companies wrangle through the appeals process in court. The judge is expected to rule on Apple’s request for a stay next month.

Apple’s move is a surprising turnaround from its tone following the decision in September. While the company always left open the possibility of an appeal, it portrayed the judge’s ruling as a resounding legal win for its App Store business model, which has come under fire from technology rivals, international regulators and members of the U.S. Congress. “We are very pleased with the Court’s ruling and we consider this a huge win for Apple,” Kate Adams, Apple’s lawyer, said in September following the ruling. The Friday night announcement inspired a torrent of commentary from Apple critics. They pointed out the move would preserve Apple’s App Store profits by preventing apps from using alternative payment systems. One company announced last week that it was already working on a cheaper, web-based alternative to Apple’s app payments — a move made possible only by the ruling that Apple is now appealing.

Keep in mind that Apple lost one count in the Epic Games lawsuit and it was insanely trivial. Epic Games on the other hand got destroyed and it’s little wonder that they almost instantly appealed.

Having said that. though I am not a lawyer Apple raises some very interesting legal points. It seems to me a big part of the Apple argument is based on a legal principle that a court can only resolve an issue brought before it. In this case, the injured party which is Epic Games must show a harm to be remedied. Epic Games did not establish the harm that the judge’s ruling specifically addresses. So Apple is asking the trial judge to reconsider. But more importantly, I’d expect Apple to raise the same arguments much more strongly in the appeal that will ultimately be filed.

Much as I assumed, Epic Games was not happy about today’s ruling in the App Store lawsuit. So much so that Epic Games CEO Tim Sweeney Tweeted this:

That sounds like an appeal is on the way from Epic Games. What precisely it would be appealing and on what grounds isn’t clear to me. But much as I figured, this is going to continue. Also, Sweeney makes it sound like it’s up to him as to when his games return to the App Store. It isn’t up to him. It’s up to Apple. And I am going to go out on a limb and to say that his games are not going to be welcome back into the App Store anytime soon.

Meanwhile over at Apple, they had this to say:

And in a statement to 9to5Mac, Apple also called it “a huge win for Apple” and “a resounding victory”. I guess that’s some great spin. But as I type this, this is Apple’s stock value:

It’s a safe bet that the value of their stock dropped because Apple will have to open things up to accept alternate payment methods will deprive them of the up to 30% cut of revenue that they currently get. And that’s making investors somewhat nervous. This is why I expect them to appeal.

Round 2 anyone?

UPDATE: This article on The Verge confirms that Epic Games is appealing today’s ruling.

We have a decision in the Apple vs Epic legal battle. Here’s the highlights:

• Apple must allow developers to include alternate purchase links in apps on the App Store. Apple has 90 days to comply with this order. On this count, Epic won.
• Epic needs to pay damages equal to “30% of the $12,167,719 in revenue Epic games collected” through Epic Direct Payment, plus any revenue collected through November 1 to date of judgement, plus interest. That’s because the judge ruled that Epic was in breach of Apple’s contract clauses. Thus Apple won on this count.
• The judge was clear that Apple is not a monopoly. The judge said that “success is not illegal” and that Epic could not demonstrate that Apple was engaging in monopolistic behavior. On this count, Apple won.

Back to the first point that I made. Apple had already announced that it will allow what it calls “Reader” apps (Netflix for example) to have alternate methods of payments because the Japanese investigated Apple and Apple cut a deal to make that go away. But the way that this order is written, it means Apple must allow developers of all applications to link out to third-party payment solutions. Most notably, this includes the highly lucrative games category. That will affect Apple’s bottom line. Thus I would not be surprised if Apple appeals this.

From the Epic standpoint, they can’t be happy. They have to cut a rather big cheque. Plus they couldn’t prove that Apple was a monopoly. The only thing that could be considered a win is that they can steer users to their payment system. But I am not sure if that is enough for them. Also, Apple doesn’t have to let them back onto the App Store as they violated their contract with Apple. That for sure will not make them happy.

I would recommend staying tuned as I am sure that this is not over. But in the meantime, here’s the relevant legal documents for your review:

Here’s a plot twist in the Fortnite vs Apple fight. Owners of iPhones and iPads will soon be able to play Fortnite again, via a cloud service, the BBC has discovered. 

Nvidia has developed a version of its GeForce cloud gaming service that runs in the mobile web browser Safari. Apple will not get a cut of virtual items sold within the battle royale fighting title when played this way. Apple is embroiled in a legal fight with Fortnite’s developer Epic, which led the iPhone-maker to remove the game from its iOS App Store. Epic has claimed that the 30% commission Apple charges on in-app gaming purchases is anti-competitive. But Apple has accused Epic of wanting a “free ride”. The case is due to go to trial in May and could take years to be resolved. Papers filed in the case indicate that Fortnite had 116 million users on iOS, 73 million of whom only played it via Apple’s operating system. Unlike Android, Apple does not allow games or other apps to be loaded on to its phones or tablets via app stores other than its own. But it does not restrict which third-party services can run within Safari or other web browsers available via its store.

Well this is interesting. I wonder if Apple will try to stop this in some way seeing as Apple doesn’t like game streaming services. And as a bonus, they aren’t fans of Nvidia either. This will be interesting to watch as I don’t expect Apple to stand idly by.