Epic Games sues Apple over its removal from the App Store

CNBC's Julia Boorstin reports that Epic Games is suing Apple after its removal from the App Store and is looking for fair compensation from the company. With Gabriela Santos, J.P. Morgan Asset Management, and Hightower's Stephanie Link. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Apple removed Fortnite from its iPhone App Store on Thursday, saying that the game violated Apple’s guidelines for its software distribution platform.

Epic Games, the maker of Fortnite, responded by filing a lawsuit within hours accusing Apple of anti-competitive behavior.

“Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users,” an Apple spokesman told CNBC in a statement. “As a result their Fortnite app has been removed from the store.”

“Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market,” Epic Games said in its legal filing.

The clash between Apple and Epic is the latest in a series of high-profile disputes over Apple’s App Store policies. App makers like Epic Games have criticized Apple’s 30% cut of digital sales, and its approval process that can remove apps from the store, which is the only way to install software on an iPhone.

Fortnite was removed from Google’s Play Store for Android phones on Thursday afternoon, a few hours after it was removed from Apple’s App Store. Epic Games filed suit against Google after it was removed from the Play Store.

“While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies,” a Google spokesman told CNBC. “However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play.”

Google’s platform has similar policies as Apple on in-app purchases and fees, but the Android operating system provides ways to install software outside of the Play Store, including permitting third-party app stores.

Spotify and Match Group, which have both publicly chafed under Apple’s rules, praised Epic’s move to fight against Apple.

“We applaud Epic Games’ decision to take a stand against Apple and shed further light on Apple’s abuse of its dominant position,” Spotify’s spokesman Adam Grossberg said in a statement to CNBC.

Apple said in its statement that it will make efforts to work with Epic Games to enable Fortnite to return to the platform.

Earlier on Thursday, Epic Games challenged not only Apple but also Google by introducing a new way to buy character outfits and weapons at a discount by paying Epic Games directly instead of using Apple’s in-app purchase service, which is required for digital goods. Apple takes 30% cut of those sales.

Users who paid Epic Games directly would receive a 20% discount on in-game currency, versus users who paid through Apple’s App Store or Google Play, who would pay a higher amount. On Thursday, in the Fortnite app, clicking on a button to purchase in-game items brings up a browser window and directs the user to input his credit card information into the Epic Games system.

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