Apple countersues Fortnite maker Epic Games for damages after the video game giant tried to bypass paying 30% fee for in-app purchases by setting up own payment system

Apple Inc on Tuesday filed counter claims against 'Fortnite' creator Epic Games asking for lost App Store fees and other damages, and seeking an order to stop the game maker from operating its own in-app payment system.

Apple and Epic have been in a legal battle since August, when the maker of the popular game launched its own in-app payment system to circumvent what it called Apple's monopolistic practices. 

Apple's App Store requires developers to use Apple's payment system and pay a 30 percent commission.

Apple blocked Epic's ability to distribute updates or new apps through the App Store, and Epic sued Apple alleging that its App Store practices violate antitrust laws.  

 Pictured, the Fortnite icon seen on an Apple iPhone. Apple has sought a court order that would force Epic Games to disable its own payment system in 'Fortnite' on Apple devices

The court allowed Apple to block Epic from distributing new titles as the case plays out, but the existing version of 'Fortnite' still works, as does Epic's payment system.

Apple had said it would allow 'Fortnite' back into the store if Epic removed the direct payment feature to comply with its developer agreement. 

But Epic has refused, saying complying with Apple's request would be 'to collude with Apple to maintain their monopoly over in-app payments on iOS'.

They also sued Google who removed the game from their app marketplace. 

Apple's filing on Tuesday asks for monetary damages for Epic's payment system, seeking 'restitution and disgorgement of all earnings, profits, compensation, benefits, and other ill-gotten gains obtained by Epic as a result of its conduct'.

Apple did not specify how much money it was seeking over the payment feature. 

'Epic's lawsuit is nothing more than a basic disagreement over money,' Apple said in its filing Tuesday. 

'Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store.' 

Apple usually takes a 30 percent cut of all in-app purchases made on their iPhones and iPads 

Apple said Epic has benefited from the iOS ecosystem with some 130 million downloads in 174 countries, which earned Epic more than half a billion dollars, before changing its tune and seeking 'special treatment.' 

The company asked for damages for harm to its reputation from frustrated 'Fortnite' players and a public relations campaign Epic launched against Apple, which included a parody of Apple's '1984' television commercial and a playable apple-headed character called 'Tart Tycoon' that bears some resemblance to Apple Chief Executive Tim Cook.

Apple also sought a court order that would force Epic to disable its own payment system in 'Fortnite' on Apple devices.  

Epic is one of the world's leading video game companies, having created popular franchises such as Fortnite, Gears of War and Infinity Blade. 

Its apps, including Fortnite, are free to download on the App Store. 

However, users are usually required to make in-app purchases when they begin playing. iPhone and iPad users reportedly spent around $90 million on the in-app purchases in the past three months alone. 

However, Epic Games only received approximately $60 million of that revenue, as they are required to give a 30 percent cut to Apple for hosting the games on their App Store. 

 Epic is one of the world's leading video game companies, having created popular franchises such as Fortnite, Gears of War and Infinity Blade. It is in a messy legal battle with Apple 

But last month, Epic rolled out a direct payment feature inside the games, which meant that they could avoid paying any profits to Apple and an ugly legal battle has ensued.  

On August 28, Apple terminated Epic Games' account on its App Store.

It was giant blow for Epic who made tens of millions of dollars though Apple. Fortnite was 'consistently listed among the five top-grossing apps in the Apple App Store', according to Wired. 

Epic retaliated by filing a lawsuit. 

The company claimed that Apple was abusing antitrust laws by removing the game for purchase and play. They also alleged that the company had an unlawful monopoly over the market. 

'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 percent monopoly over the in-app payment processing market,' Epic said at the time.

However, Apple stood strong, releasing its own statement saying that 'Epic made a deliberate choice to cheat Apple'.

'Having decided that it would rather enjoy the benefits of the App Store without paying for them, Epic has breached its contracts with Apple, using its own customers and Apple's users as leverage,' the tech giant declared. 

Apple then went one step further, confirming it had completely wiped all Epic Games for download onto iPhones and iPads. 

Epic sued Apple last month, claiming they had an unlawful monopoly over the market. However, the tech giant have stood strong, removed all Epic Games from their App Store and have filed a counter-suit against the Fortnite maker. Pictured: Apple CEO Tim Cook 

'We are disappointed that we have had to terminate the Epic Games account on the App Store,' a spokesperson told The Verge. 

'We have worked with the team at Epic Games for many years on their launches and releases. The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they've followed for the past decade until they created this situation.'

'Epic has refused. Instead they repeatedly submit Fortnite updates designed to violate the guidelines of the App Store. This is not fair to all other developers on the App Store and is putting customers in the middle of their fight. We hope that we can work together again in the future, but unfortunately that is not possible today.'

Late Friday Epic Games revealed that it had asked a court to stop what it saw as Apple Inc's retaliation against them.

Epic Games filed for a preliminary injunction that would put its game back in the App Store and restore its developer account. 

The filing was made in the United States District Court for the Northern District of California.

It argued that Epic Games is 'likely to suffer irreparable harm' in the absence of a preliminary injunction and that 'the balance of harms tips sharply in Epic's favor'.

The filing described the iPhone maker as a 'monopolist' that maintains its monopolies by 'explicitly prohibiting any competitive entry'.  

The dispute comes with Apple and other tech giants facing increased scrutiny for their dominance in various economic sectors, allowing them to grow even as much of the economy contracts from the impact of the coronavirus pandemic.