Apple Inc. swung again at Epic Video games Inc. in a counter-lawsuit accusing the software program developer of duplicity and greed, intensifying a authorized battle over the iPhone maker’s on-line software program retailer that would reshape how {the marketplace} operates.

On the core of the dispute is how a lot management Apple exerts within the expansive world of smartphone apps which have modified how trendy life operates and ushered within the platforms for every part from residence leisure and videogames to on-demand meals ordering and trip hailing.

Epic sued Apple in addition to Google final month after the tech giants yanked the favored “Fortnite” videogame from their app marketplaces, calling the facility each corporations maintain over builders monopolistic. Apple and Google eliminated the sport after Epic launched an in-app fee system in violation of their guidelines that might lower out each corporations from receiving a 30% lower of customers’ spending.

In courtroom paperwork filed Tuesday, Apple defended its actions and went additional, asking a federal decide in California to award punitive damages and limit Epic from persevering with what it describes as unfair enterprise practices.

“Epic’s lawsuit is nothing greater than a primary disagreement over cash,” Apple mentioned in its submitting Tuesday. “Though Epic portrays itself as a contemporary company Robin Hood, in actuality it’s a multi-billion greenback enterprise that merely needs to pay nothing for the super worth it derives from the App Retailer.”

An Epic spokesman declined to remark past what the corporate has mentioned beforehand about preventing what it describes as a system that suppresses competitors and inflates costs.

Whereas Epic and Apple search to litigate their dispute, the sport maker filed a movement Friday searching for to get Fortnite again within the App Retailer whereas that struggle continues. A listening to is scheduled for Sept. 28. “All Epic seeks is for the courtroom to cease Apple from retaliating towards Epic for daring to problem Apple’s misconduct,” Epic mentioned in final week’s submitting.

Apple reached a staggering $2 trillion market valuation in August, regardless of years of doubt from critics over whether or not the tech large may proceed to succeed after the loss of life of Steve Jobs. Right here’s a have a look at Apple’s rise to the very prime. Illustration: Jacob Reynolds/WSJ

Intently held Epic is simply the most recent firm to take concern with Apple’s management of the App Retailer, which is a part of the Cupertino, Calif.-company’s evolution to increase past promoting {hardware} and to generate income from software program companies. Apple’s App Retailer within the first seven months of this yr generated practically $39 billion in international income from in-app purchases, subscriptions and premium apps, in accordance with researcher Sensor Tower. After its launch in 2008, the App Retailer has about one billion clients from 175 nations.

Apple is dealing with antitrust probes from governments within the U.S. and Europe whereas different tech corporations from Microsoft Corp. to Spotify Know-how SA have joined in complaining publicly about app market practices. Final month, Fb Inc. CEO Mark Zuckerberg mentioned in a webcast with workers that Apple has the flexibility to dam innovation and “to cost monopoly rents,” in accordance with an individual conversant in the matter.

Apple hasn’t commented on Mr. Zuckerberg’s remarks. In response to regulatory probes, Apple has denied hurting rivals and mentioned it needs apps that compete with its companies to thrive.

In its submitting Tuesday, Apple sought to painting itself as a sufferer of plotting by Epic. The tech large described all the assistance it had given Epic in recent times and detailed the way it alleged the sport firm had begun laying groundwork for what Apple referred to as a “calculated and pre-packaged marketing campaign” towards it. “Fortnite” has been downloaded virtually 130 million instances since being added to the App Retailer in 2018, in accordance with Apple. Epic has earned greater than $600 million from its relationship with Apple, in accordance with courtroom information.

Epic Chief Govt Tim Sweeney in late June emailed Apple executives, together with CEO Tim Prepare dinner, asking for a particular settlement exempting his firm from current contractual obligations, together with the App Retailer funds, in accordance with Apple’s submitting. The tech large rejected that demand.

Then on Aug. 3, Epic despatched to the App Retailer an replace of “Fortnite” that the sport firm described as a “hotfix” however that Apple claimed was a Computer virus permitting it to bypass Apple’s assessment course of and fee system.

At round 2 a.m. Aug. 3, Mr. Sweeney emailed Apple once more. “Epic will not adhere to Apple’s fee processing restrictions,” he wrote, in accordance with the submitting. Mr. Sweeney declined touch upon Apple’s newest submitting.

Just a few hours later, Apple mentioned, Epic activated the exterior fee workaround that lower Apple out of its share of gross sales. “Epic sought to get pleasure from the entire advantages of Apple’s iOS platform and associated companies whereas its “hotfix’ lined Epic’s pockets at Apple’s expense,” Apple mentioned in its submitting.

That was adopted by a public relations battle and lawsuit towards Apple. Epic confirmed a video on “Fortnite” mimicking the iPhone-maker’s ‘1984’ advert marketing campaign.

Apple has defended its take of app purchases previously as a method to assist fund the event of its ecosystem that gives a protected and safe strategy to obtain third-party software program. The corporate mentioned in its submitting that Apple requires each app on its system to bear a “rigorous, human-assisted assessment.”

It famous that Epic has its personal app market the place it prices a fee as properly, although Epic takes solely a 12% lower of gross sales. “There’s nothing anticompetitive about charging a fee for others to make use of one’s service,” Apple mentioned within the submitting.

Epic mentioned final week that it stays dedicated to the authorized struggle however that its enterprise has been harmed in current weeks. The corporate mentioned each day lively gamers utilizing Apple’s cellular working system, or iOS, of “Fortnite”—which Epic mentioned has greater than 350 million registered customers—has plummeted for the reason that dispute started and its popularity with shoppers has been harmed.

Although “Fortnite” may be performed on cellular units in addition to gaming consoles and private computer systems, Epic mentioned iOS gamers represented the most important section of customers.

Write to Tim Higgins at Tim.Higgins@WSJ.com

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