How Apple’s Relationship With Epic Collapsed

In 2011, when Apple Inc. Chief Executive Officer Tim Cook wanted to show off the first major product under his leadership—the iPhone 4S—the company invited Epic Games onto the stage. Mike Capps, Epic Games Inc.’s president at the time, made a quick joke about how much money his company’s games made from Apple devices. Then he helped run a demo of Infinity Blade II, designed to showcase both Epic’s new game and the power of the latest iPhone’s chip.

It was a public demonstration of a close corporate relationship that has since disintegrated. On May 3 a federal court will begin hearing arguments in a trial centered on Epic’s claims that Apple extracts money from developers by abusing its market power, and Apple’s counterclaims that Epic breached its contract. The financial stakes could extend into the billions of dollars, and the decision may have ramifications for tens of thousands of mobile developers. On April 30 the European Commission charged that Apple’s restrictions on developers had distorted the music streaming market, two years after a complaint from Spotify Technology SA raised concerns similar to those of Epic.