Even though both Valve and Apple were able to “correspond in a good faith effort to resolve outstanding disputes,” the two could not agree over outstanding disputes relating to a subpoena served to Valve back in November. Which later resulted in the two companies submitting a joint letter in a court submission.
Apple demanded that Valve must provide significant amounts of commercial data about Steam sales over multiple years. However, Valve points out that “Fortnite is not available on Steam, and Epic has publicly and unequivocally stated it will not offer Fortnite on Steam unless Valve changes its business model.”
According to Apple:
As the Court's preliminary injunction ruling makes clear, Epic's various mobile and non-mobile distribution options are central to disputed issues of market definition and market power.
Valve's digital distribution service, Steam, is the dominant digital game distributor on the PC platform and is a direct competitor to the Epic Games Store.
Epic, like other game developers, could distribute Fortnite on Apple's App Store, the Epic Games Store, Valve's Steam, or through various other digital distribution channels.
As a result, in November, Apple served Valve with a document subpoena seeking documents relating to Steam.
Apple says it has requested the following information from Valve:
- Total yearly sales of apps and in-app products
- Annual advertising revenues from Steam
- Annual sales of external products attributable to Steam
- Annual revenues from Steam
- Annual earnings (gross or net) from Steam
Apple argued that the information requested is purely historical and so Valve will not be at risk of competitive or economic harm.
This information that Apple requires is vital to its case, as told by the court. The tech giant needs to calculate the market’s total size available to Epic’s available digital distribution channels. And must prove “the strength of competition for consumers and app developers” among digital distribution platforms. Apple has expressed that Valve is similar to Samsung, which the court had agreed earlier holds identical information.
Valve’s attorney, Gavin Skok, responded that “most of the games in its platform can be bought from multiple sources, including retail stores, the developers or other PC platforms.” Further, all third parties control their pricing and content on Steam, so Valve “only collects the purchase price from customers and sends the proceeds to the third-party developer net of a revenue share to Valve.”
Gavin Skok also argues that Valve has already "produced documents regarding its revenue share, competition with Epic, Steam distribution contracts, and other documents."
Considering that Valve is not involved in the mobile app market, the articles warranted by Apple is extraneous. With current security breaches and confidentiality issues strewn across the internet, "six year’s worth of PC games and item sales for hundreds of third-party video games, then producing a massive amount of confidential information about these games and Valve’s revenues would impose an extraordinary burden."
Gavin Skok summarised Apple’s demands by stating:
Somehow, in a dispute over mobile apps, a maker of PC games that does not compete in the mobile market or sell "apps" is being portrayed as a key figure. It's not. The extensive and highly confidential information Apple demands about a subset of the PC games available on Steam does not show the size or parameters of the relevant market and would be massively burdensome to pull together. Apple's demands for further production should be rejected.
US Judge Thomas Hixson will now have to look over both arguments and make the final decision over the matter.
How #FreeFortnite began.
Last year on 14 August 2020, we covered Epic Games launching a legal battle against Apple after its hit Battle Royal title, Fortnite, was removed from the iPhone’s App Store. Apple hit back, claiming that it was justified due to Epic breaking its agreements with the company after allowing players to buy VBucks (the in-game currency) throughout non-App Store channels. This allowed Epic to avoid giving the tech giant a cut of the revenue raised.
The ban has meant that 116 million of Fortnite’s 350 million player base cannot access updates to the game. As a result, Epic has taken Apple to the US, Australian, UK and EU courts to see this ban lifted.