Washington (CNN Business)Apple (AAPL) will not have to reinstate Fortnite to its app store, at least for now, a federal judge ruled Monday night in a historic legal battle between the iPhone maker and the producer of one of the world’s most popular video games.
The decision means Fortnite players on Apple devices likely won’t get access to the game’s newest season content, which launches Aug. 27 and requires an update to the game that Apple will not allow onto the app store.
But Fortnite’s creator, Epic Games, won what may be a more significant — albeit temporary — respite on Monday that could have ripple effects across the digital media industry.
Under a temporary restraining order issued by Judge Yvonne Gonzalez Rogers, Apple must not block Unreal Engine, a major game development software suite owned by Epic, from its app store. Epic declined to comment. Apple didn’t immediately respond to a request for comment.
The order resolves what had become a growing concern over the future of video games, film and television ever since Apple and Epic went to court earlier this month.
Unreal Engine is a major design platform used to create lifelike and ultra-realistic computer-generated scenes. It’s played a central role in video games including PlayerUnknown’s “Battlegrounds” and “Borderlands 3,” and has provided the backdrops in TV shows such as Disney’s (DIS) “The Mandalorian.”
Last week, Apple told Epic that it planned to revoke its ability to distribute the Unreal Engine software on the Apple app store, not merely block players’ access to Fortnite.
If Apple were to follow through on its plan, it could hinder developers, film producers and others from getting a critical tool onto Apple devices to create apps and entertainment for consumers, Epic and other developers argued. To bolster its case, Epic submitted a sworn declaration from Microsoft claiming that Apple’s plan “will harm game creators and gamers.”
On Monday, the judge agreed.
If Apple followed through on its Unreal ban, it would lead to “potential significant damage to both the Unreal Engine platform itself, and to the gaming industry generally, including on both third-party developers and gamers,” Gonzalez Rogers wrote in her order. “Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders.”
The order comes amid a wider legal claim by Epic that Apple’s practice of taking a 30% cut of in-app revenues — and blacklisting developers that don’t comply — violates US antitrust law. The suit is viewed as a potential landmark case for antitrust enforcement as well as a possible turning point for the wider digital economy, which runs on app stores.
Based on the evidence in the case so far, Gonzalez Rogers wrote in the order, Epic will face a difficult challenge winning its case on the merits. But she acknowledged that there are “serious questions” about Apple’s business model, and that Apple’s attempt to ban Unreal Engine would have had ripple effects across the video game industry.
During a hearing Monday to consider whether the order was necessary, Gonzalez Rogers raised deep doubts about Apple’s app store and its effects on competition.
“The problem is, if you have an iPhone, you can’t buy [apps] from anyone else,” she said. “You can’t. You are limited to buying it from Apple. I can’t buy it from Google. i can’t buy it from Amazon. There is no competition. And so the question is, without competition, where does that 30 percent [figure] come from — why isn’t it 10, 15, 20?”
Apple responded that consumers enjoy plenty of competition, mainly in the market for smartphone ecosystems such as iOS and Android.
Scrutiny over Apple’s app store has rapidly mounted this year as software developers and antitrust investigators in Congress and in Europe have zeroed in on the company’s app store policies.
While Apple has maintained that its policies are industry standard and meant to ensure a consistent and secure app experience for consumers, critics say Apple’s 30% fee and requirements that all in-app payments be run through Apple’s payment channels chill competition.
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