Epic Games Answers Apple’s Counterclaims

On Tuesday in the Northern District of California, Epic Games filed an answer denying Apple’s counterclaims, claiming that the antitrust suit is “nothing more than a basic disagreement over money.” This action comes after Epic Games filed its lawsuit against Apple over its App Store policies in relation to its Fortnite video game in August. Afterward, Judge Yvonne Gonzalez Rogers issued an order granting in part Epic’s motion for a temporary restraining order in the suit.

Epic Games stated that on Aug. 13, it “provided Fortnite users on iOS with the choice of an alternative payment processing solution called Epic Direct Pay, which offered consumers lower prices and better customer service than Apple’s payment processor, IAP.” Epic noted that it does not disagree “that this competing payment solution was prohibited by contractual provisions that Apple has unlawfully forced on developers like Epic who sell in-app digital content, even though Apple allows numerous other app developers to use competing solutions.” 

Epic also claimed that iOS Fortnite purchases would be subject to Apple’s 30% tax and denied that “its refusal to abide by Apple’s anti-competitive scheme was in any way wrongful.” Moreover, Epic asserted that the agreements Apple uses to support its counterclaims are “illegal and unenforceable.” 

Apple alleged that Epic is merely seeking money, but Epic argued that this is not true because it is not seeking monetary damages. Rather, according to Epic, “Apple is not the party that has sued seeking payment from Epic on multiple different theories.” Epic has denied Apple’s “legally deficient” counterclaims.

Epic offered a variety of defenses against Apple; the first defense is Apple’s purported violations of antitrust laws. Specifically, Epic proffered that Apple’s claims are barred because they are based on contracts which are “illegal and unenforceable” and violate antitrust laws including the Sherman Act, the Cartwright Act, and the Unfair Competition Law. Epic said the contracts “are part-an-parcel of its scheme to unreasonably restrain trade and maintain its monopoly.”

According to Epic, Apple’s contracts are also void because they are against public policy in relation to antitrust and unfair competition laws. Epic has averred that Apple’s contracts are unconscionable. Furthermore, according to Epic, its actions are justified and privileged by the same antitrust and unfair competition laws. 

In total, Epic listed 28 defenses against Apple, the remaining of which include: unlawful duress; failure to state a claim; “ratification, agreement, acquiescence, or consent to” Epic’s purported conduct; estoppel; doctrine of waiver; doctrine of unclean hands; doctrine of in pari delicto; lack of injury-in-fact; unjust enrichment; lack of causation; (and) Epic’s protected competition privilege.”

Epic has sought declaratory judgment in its favor, for the court to deny Apple’s requested relief, and an award for more relief as determined by the court. Epic Games is represented by Feagre Drinker Biddle & Reath LLP and Cravath, Swaine & Moore. Apple is represented by Gibson, Dunn & Crutcher LLP.