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Apple Court Filing Details ‘Project Liberty,’ Epic’s Plan to Free Itself of App Store Commissions

Just past midnight Pacific time today, Apple filed Proposed Findings of Fact and Conclusions of Law in its legal dispute with Epic Games. The document, a standard pre-trial filing, is designed to serve as a road map for the trial judge, explaining the facts Apple expects will be admitted into evidence at trial, how the law applies to those facts, and the decision Apple believes the court should reach. In other words, it’s a one-sided account of the disputes meant to persuade the judge that Apple’s legal positions are correct. Epic has filed a similar pleading in the case arguing its side of the story.

That context is important to keep in mind because until the judge issues a ruling, filings like these remain legal posturing. That doesn’t mean that Apple’s filing doesn’t contain facts that may be found to be true through the trial process, but until that trial happens, it’s best to approach these sorts of pleadings with skepticism.

That said, the document Apple filed includes some interesting revelations that the company backs up with reference to the documents and other evidence gathered during the pre-trial discovery phase of the litigation. Perhaps the most interesting tidbit is the additional backstory about something Epic called Project Liberty, a plan that Apple says was hatched by Epic in 2019 to free itself from App Store commissions and that Epic’s CEO Tim Sweeney recently mentioned in an interview with CNN.

Last August, Epic submitted an update to its popular videogame Fortnite to Apple’s App Review for approval. After the game was approved and available to users, Epic made a server-side change that enabled a new in-app payment system in violation of Apple’s App Review Guidelines. The move by Epic allowed it to circumvent the 30% commission that Apple charges on digital goods sold through the App Store.

Apple removed Fortnite from the App Store, and Epic immediately sued Apple in US Federal Court for antitrust violations. Epic also published a protest video on YouTube parodying Apple’s 1984 TV commercial that introduced the Macintosh computer to mock the company and rally public support for Epic’s legal efforts. The timing of events left little doubt that Epic’s actions were part of a highly-choreographed strategy to challenge Apple’s App Store rules publicly and in the courts.

What Apple’s court filing detail is that the orchestration of those events reaches back to 2019 when Epic began hiring lawyers and a PR firm to help it find a way around the 30% fee charged by the App Store. Apple says that Epic spent months and large sums of money plotting the events that unfolded last summer. It’s an interesting account and, if true, demonstrates a degree of bad faith on Epic’s part that could harm its case. However, Project Liberty is also the sort of colorful story that works better in headlines than as a defense. The May 3rd trial will more likely be decided on antitrust and contractual minutiae buried deep in Apple and Epic’s hundreds of pages of court filings.

More surprising than the backstory surrounding Epic’s actions is that it’s still going forward. There’s a reason you don’t see a lot of big companies go toe-to-toe in court like this. Putting the outcome in the hands of a judge and putting senior executives on the witness stand relinquishes the control both parties have over their destinies. It’s a process that’s fraught with risk, which is why a bad settlement is often better than no settlement at all.

‘Settled on the courthouse steps’ isn’t just a figure of speech. There is still plenty of time for this dispute to settle. Still, I can’t help but wonder if Epic has made settlement impossible by the way it orchestrated the dispute and made it very personal for both sides, and also by dragging Apple before government regulators around the world. No settlement can put the regulator genie back in its bottle.

With the trial less than four weeks away, I expect we’ll see the efforts by both companies to sway popular opinion ramp up. However, that’s all a sideshow to the main event. If Epic and Apple’s claims go forward in May, only US District Judge Yvonne Gonzalez Rogers’ opinion will matter.

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