Apple dealt setback in dispute with Epic Games

On Behalf of | Nov 13, 2020 | Business Law |

Arizona residents who follow the technology sector may be aware that Apple Inc. is embroiled in a contentious lawsuit with the video game developer Epic Games over income generated by mobile apps. The North Carolina-based developer filed a lawsuit in 2020 after Apple removed its app from their online marketplace. Apple took action because Epic offered gamers who were not using the app a discount. Epic said that it could not offer iOS users the discount because Apple takes a 30% cut of all app-related revenue. Apple accused Epic of breaching a contract that prohibits third-party marketplaces.

Theft allegations

Apple responded to the lawsuit with a barrage of counterclaims. These included allegations of theft. Apple’s counterclaim sought the return of money that it claimed Epic had stolen by funneling funds that it should have received into its own coffers. The federal judge presiding over the case questioned the validity of the counterclaim when it was filed. On Nov. 10, she granted Epic’s motion to dismiss. The remaining claims in the case are all related to the initial breach of contract allegations.

No independent evidence

Epic responded to the theft claim by pointing out that the money they were being accused of stealing was generated by their own efforts. While the judge did not comment directly on Epic’s position, she did say during a Zoom conference that Apple had not provided the court with any independent evidence of wrongful acts beyond the alleged breach of contract.

Complex lawsuits

This ruling shows that even large companies with deep pockets can suffer setbacks in court when business matters are litigated. This is one of the reasons why attorneys with commercial litigation experience may urge parties involved in breach of contract disputes to seek an amicable settlement if at all possible. When negotiations are deadlocked and a protracted court battle seems inevitable, attorneys could suggest alternative venues such as nonbinding mediation or arbitration.