Epic cries monopoly as Apple details secret ‘Project Liberty’ effort to provoke ‘Fortnite’ ban

Comment

The Epic v. Apple lawsuit alleging monopolistic practices by the latter will begin next month, and today the main arguments of each company were published, having been trimmed down somewhat at the court’s discretion. With the basic facts agreed upon, the two companies will go to battle over what they mean, and their CEOs will likely take the (virtual) stand to do so.

As we’ve covered in previous months, the thrust of Epic’s argument is that Apple’s hold over the app market and 30% standard fee amount to anti-competitive behavior that must be regulated by antitrust law. It rebelled against what it describes as an unlawful practice by slipping its own in-game currency store into the popular game Fortnite, circumventing Apple payment methods. (CEO Tim Sweeney would later, and unadvisedly, compare this to resisting unjust laws in the civil rights movement.)

Apple denies the charge of monopoly, pointing out it faces enormous competition all over the market, just not within its own App Store. And as for the size of the fees — well, perhaps it’s a matter that could stand some adjustment (the company dropped its take to 15% for any developer’s first million following criticism throughout 2020), but it hardly amounts to unlawfulness.

Judge denies Epic’s request to force Apple to bring Fortnite back to App Store

For its part, Apple contends that the whole antitrust allegation and associated dust-kicking is little more than a PR stunt, and it has something in the way of receipts.

Epic did, after all, have a whole PR strategy ready to go when it filed the lawsuit, and the filings describe “Project Liberty,” a long-term program within the company to, in Apple’s opinion, shore up sagging revenues from Fortnite. Epic does seem to have paid a PR firm some $300,000 to advise on the “two-phase communications plan,” involving a multi-company complaint campaign against Apple and Google via the “Coalition for App Fairness.”

Project Liberty makes up a whole section in Apple’s filing, detailing how the company and Sweeney planned to “draw Google into a legal battle over anti-trust,” (and presumably Apple) according to internal emails, by getting banned by the companies’ app stores for circumventing their payment systems. Epic only mentions Project Liberty in one paragraph, explaining that it kept the program secret because “Epic could not have disclosed it without causing Apple to reject Version 13.40 of Fortnite,” viz. the one with the offending payment system built in. It’s not much of a defense.

Whether Apple’s fees are too high, and whether Epic is doing this to extend Fortnite’s profitable days, the case itself will be determined on the basis of antitrust law and doctrine, and on this front things do not look particularly dire for Apple.

Four perspectives: Will Apple trim App Store fees?

Although the legal arguments and summaries of fact run to hundreds of pages from both sides, the whole thing is summed up pretty well in the very first sentence of Epic’s filing: “This case is about Apple’s conduct to monopolize two markets within its iOS ecosystem.”

To be specific, it is about whether Apple can be said to be a monopolist over an ecosystem it created and administrated from the very beginning, and one that is provably assailed on all sides by competitors in the digital distribution and gaming space. This is a novel application of antitrust law and one that would carry a heavy burden of proof for Epic — and that an (admittedly amateur) review of the arguments doesn’t suggest there’s much chance of success.

But the opinion of a random reporter is not much in the accounting of things; there will have to be a trial, and one is scheduled to occur next month. There’s a lot of ground to cover, as Epic’s presentation of its arguments will need to be as meticulous as Apple’s dismantling of them. To that end we can expect live testimony from Apple CEO Tim Cook, Epic CEO Tim Sweeney, Apple’s former head of marketing and familiar face Phil Schiller, among others.

The timing and nature of that testimony or questioning will not be known until later, but it’s likely there will be some interesting interactions worth hearing about. The trial is scheduled to begin May 3 and last for about three weeks.

Notably there are a handful of other lawsuits hovering about relating to this, such as Apple’s countersuit against Epic alleging breach of contract. Many of these will depend entirely on the outcome of the main case — e.g. if Apple’s terms were found to be unlawful, there was no contract to break, or if not, Epic pretty much admitted to breaking the rules so the case is practically over already.

You can read the full “proposed findings of fact” documents from each party on the invaluable RECAP; the case number is 4:20-cv-05640.

‘Willful, brazen, and unlawful’: Apple files breach-of-contract countersuit against Epic

More TechCrunch

Ahead of the AI safety summit kicking off in Seoul, South Korea later this week, its co-host the United Kingdom is expanding its own efforts in the field. The AI…

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

13 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities