Epic Games achieved a conditional victory Friday in its case against Google’s app store payment policies. The decision follows years of similar litigation between Epic and Apple, as depicted in this artist rendering.

AP

Cary-based Epic Games and Google have reached a temporary armistice in their ongoing legal battle over Bandcamp — a digital music store known for its eclectic selection and direct-to-artist payment system.

Epic Games, the company behind popular video games such as Fortnite and Rocket League, acquired Bandcamp in March. Epic committed to maintaining the platform’s artist-first features, which funnel more money to music makers than most streaming apps and websites. Bandcamp artists collect about 82% of every sale through the app’s custom billing system, and they are permitted to set their own pricing models.

“(Bandcamp) will play an important role in Epic’s vision to build out a creator marketplace ecosystem for content, technology, games, art, music and more,” Epic said in a statement at the time.

But legal issues ensued. In April, Bandcamp faced a deadline to incorporate Google Play’s billing system into the app following Google’s 2020 policy changes. Google guidelines had previously exempted some apps, including most music platforms, from Google’s revenue share system. Under modified rules, Bandcamp would have to use Google Play Billing and absorb Google’s fees.

“(W)e would have to either pass Google’s fees on to consumers (making Android a less attractive platform for music fans), pass fees on to artists (which we would never do), permanently run our Android business at a loss, or turn off digital sales in the Android app,” Bandcamp CEO and co-founder Ethan Diamond said in a statement.

Epic rebuffed Google’s policy change, adding new litigation to an ongoing antitrust lawsuit Epic filed against Google two years ago. On Friday, the two companies reached a temporary agreement that will allow Bandcamp to operate unchanged through Google Play for at least a year.

“(Google) will not remove from, de-list, refuse to list on, or otherwise make unavailable the Bandcamp app on the Google Play Store (“Google Play”), nor will Google reject, unreasonably delay, or refuse to distribute updates of the Bandcamp app, on the basis that the Bandcamp app or updates to the app offer in-app purchases of digital goods or services through means other than Google Play’s billing system,” according to a joint stipulation filed Friday.

In return, Epic and Bandcamp agreed to reserve “10% of the revenue generated from digital sales on Android devices in escrow until Epic’s ongoing case against Google is resolved,” Diamond said, “a cost we will bear.”

Google did not immediately respond to The News & Observer’s outreach. The two companies are scheduled to revisit court in April 2023, according to court filings.

Epic Games’ legal wars

Epic and Google’s brawl over Bandcamp is the latest in years of litigation between the two companies. Epic has also waged war against Apple. Epic accuses both companies of monopolistic practices in violation of antitrust laws.

Almost two years ago, Epic made a gutsy move: the video game maker modified its App Store version of Fortnite by inserting an independent payment system. The update defied Apple’s rules requiring developers to use its in-app payment system and pay a 30% fee on all purchases.

Fortnite was removed from Apple’s store, and a contentious court case began. In September 2021, Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California ruled that Apple could no longer block developers from communicating alternative payment options to customers outside of the App Store. But her ruling stopped short of letting developers insert their own payment systems within apps, and she denied Epic’s assertion that Apple had operated as an illegal monopoly.

Apple-AppStoreOnTrial.JPG
In this Tuesday, Jan. 21, 2020, file photo, Apple CEO Tim Cook is photographed at the World Economic Forum in Davos, Switzerland. Cook took the witness stand Friday, May 21, 2021, in the Epic Games vs. Apple trial to defend the company’s iPhone app store against charges that it has grown into an illegal monopoly. Markus Schreiber AP

“While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct,” Gonzalez Rogers said. “Success is not illegal.”

Both Apple and Epic have filed appeals seeking more definitive victories. In the wake of 2021’s initial ruling, Epic agreed to comply with App Store payment policy, but Apple continued its ban on Fortnite.

Earlier this month, Epic made Fortnite available on Microsoft’s Xbox Cloud Gaming service, reintroducing the game to Apple users while sidestepping the App Store.

This story was originally published May 21, 2022 10:38 AM.

Lars Dolder is a business reporter at The News & Observer. He covers retail, technology and innovation.