An Apple exec has spoken of his shock after Fortnite creator Epic Games installed a hotfix that allowed it to deploy its own payment methods, thus skirting the 30 per cent App Store tax.
Testifying on the fourth day of the bench trial, Apple's vice president of App Store, Matt Fischer, said he had been "blindsided" by the deployment of the workaround, given the amicable relationship previously enjoyed by both companies.
Fischer said (audio here) that Apple's marketing teams had previously promoted in-game events taking place within Fortnite involving DJ Marshmello and rapper Travis Scott. He also claimed that Cupertino had expressed a willingness to reconsider its prohibition on the in-game gifting of virtual items.
As a free-to-play title, Fortnite is almost entirely monetised through in-app purchases of items, skins, and virtual currencies. Despite this, the title has proven incredibly lucrative for Epic Games, bringing in almost $9bn in revenue between 2018 and 2019, according to disclosures made during the trial.
Epic Games' workaround, which was deployed late at night, briefly allowed players to purchase in-game content at a 20 per cent discount by using the company's own payment infrastructure.
Epic CEO Tim Sweeney directly informed Apple of the move in a 2am email sent to Fisher, as well as CEO Tim Cook, Apple Fellow Phil Schiller, and Craig Federighi, the company's senior vice president of Software Engineering.
In the email, Sweeney wrote: "I'm writing to tell you that Epic will no longer adhere to Apple's payment processing restrictions."
He added: "Today, Epic is launching Epic direct payments in Fortnite on iOS, offering customers the choice of paying in-app through Epic direct payments or through Apple payments, and passing on the savings of Epic direct payments to customers in the form of lower prices," noting that he believed both "history and the law" were on his side.
Sweeney warned that if Apple blocked or removed Epic Games' apps, the company would pursue legal action.
Apple later responded by banning Fortnite. It additionally wanted to kick Epic Games from its developer tools programme, but that was halted by a temporary restraining order from a federal judge. Such a move would have proven disastrous for the developers that rely on Epic's Unreal Engine software.
In response, Epic Games kept its promise and filed suit, claiming Apple's tight grip on the app store broke federal and state antitrust law, specifically the Sherman Act, and California's Cartwright Act and Unfair Competition Law. The trial continues. ®