Apple files breach of contract suit against Epic Games

On Behalf of | Sep 17, 2020 | Business Disputes |

The Apple App Store provides an incredible amount of revenue to Apple and some developers selling apps on the platform. Epic Games generated enormous sales through the App Store, but a recent contract dispute with Apple led to a lawsuit. Now, Apple is countersuing the company, and many industry onlookers await the results of the litigation.

Epic Games produces the popular Fortnite game, a title that draws millions of players. Epic Games previously had a good relationship with Apple as the App Store helped deliver $600 million in sales to the gaming company. When Epic Games released a version of Fortnite designed to allow users to pay directly for “in-game content,” Apple dropped the game from its store. Apple’s App Store receives a 30% cut of revenue, and direct user purchase would leave Apple with no cut.

Epic Games immediately filed suit against Apple, and Apple then suspended Epic Games’ account. In a surprise move, Apple went a step further and filed a breach of contract suit against Epic Games.

The maker of Fortnite also ran into similar problems with Google, but Google has not filed a breach of contract suit. However, like Apple, Google relies on revenue cuts from its store and doesn’t want to see partners explore alternative payment strategies.

The full amount of compensation Apple seeks in damages is not known. Likely, the amount is significant. In the suit, Apple points out its displeasure with Epic Games by referring to its operation of a “hidden commission-theft functionality.” Apple surely wants to discourage other companies selling wares on the App Store from moving payments without paying Apple. The lawsuit against Epic Games may serve as a warning to various other companies on the platform.

Contract litigation and disputes could involve many enterprises and participants of varying size and scope. Those engaged in breach of contract litigation may rely on an attorney to help settle a dispute.