Apple subpoenas Valve as part of its legal battle with Epic: Valve fights back

A new court filing has revealed that, as part of the ongoing legal battle between Apple and Epic Games, Apple subpoenaed Valve Software in November 2020, demanding it provide huge amounts of commercial data about Steam sales and operations going over multiple years.

A brief primer: the dispute between Epic and Apple began in August 2020, when Epic added a new payment system to Fortnite's iOS version that bypassed Apple's 30 percent fee. Apple retaliated almost immediately by removing Fortnite from the App Store. Epic replied in-kind by rolling out a Nineteen Eighty-Fortnite promo, based on Apple's famous 1984 Macintosh ad, and then a few minutes after that—this all happened on the same day—filed a lawsuit against Apple over Fortnite's removal. Since when there has been plenty of legal back-and-forth between the two parties.

Apple subpoenaed Valve under the basic argument that certain Steam information would be crucial to building its case against Epic, which is all about competitive practices. Yesterday a joint discovery letter was filed to the District court in Northern California relating to the subpoena, which contains a summary of the behind-the-scenes tussles thus far, and both sides' arguments about where to go from here.

Apple's argument is made by the law firm McDermott, Will and Lowery, and states that Valve is relevant to the case against Epic because "Valve’s digital distribution service, Steam, is the dominant digital game distributor on the PC platform and is a direct competitor to the Epic Game Store." Since the subpoena in November, goes Apple's argument, "Apple and Valve have engaged in several meet and confers, but Valve has refused to produce information responsive to Requests 2 and 32."

Requests 2 and 32 show some chutzpah, to say the least. Rarely will you see a finer example of lawyer-ese than this:

"Apple’s Request 2 is very narrow. It simply requests documents sufficient to show Valve’s: (a) total yearly sales of apps and in-app products; (b) annual advertising revenues from Steam; (c) annual sales of external products attributable to Steam; (d) annual revenues from Steam; and (e) annual earnings (whether gross or net) from Steam. Apple has gone as far as requesting this information in any readily accessible format, but Valve refuses to produce it."

Apple's reasoning for this request boils down to a desire to show the extent of the market that the Epic Store is competing in. Which got short shrift from Valve: "Valve has admitted to Apple’s counsel that the information requested exists in the normal course of business, but Valve simply refuses to produce it in any of the formats Apple suggested."

Now if you thought that demand from Apple was ballsy (and bear in mind Steam is a non-party to this main dispute) hold on to your hat, because Request 32 piles-on to demand documents showing:

"(a) the name of each App on Steam; (b) the date range when the App was available on Steam; and (c) the price of the App and any in-app product available on Steam."

That is, Apple wants Valve to provide the names, prices, configurations and dates of every product on Steam, as well as detailed accounts of exactly how much money Steam makes and how it is all divvied-up. Apple argues that this information is necessary for its case against Epic, is not available elsewhere, and "does not raise risk of any competitive harm."

Needless to say, Valve does not agree. Its counter-argument to the above says that Valve has co-operated to what it believes to be a reasonable extent—"Valve already produced documents regarding its revenue share, competition with Epic, Steam distribution contracts, and other documents"—before going on to outline the nature of Apple's requests: "that Valve (i) recreate six years’ worth of PC game and item sales for hundreds of third party video games, then (ii) produce a massive amount of confidential information about these games and Valve’s revenues."

In a masterpiece of understatement, Valve's legal counsel writes: "Apple wrongly claims those requests are narrow. They are not."

Apple apparently demanded data on 30,000+ games initially, before narrowing its focus to around 600. Request 32 gets incredibly granular, Valve explains: Apple is demanding information about every version of a given product, all digital content and items, sale dates and every price change from 2015 to the present day, the gross revenues for each version, broken down individually, and all of Valve's revenues from it.

Valve says it does not "in the ordinary course of business keep the information Apple seeks for a simple reason: Valve doesn’t need it."

Valve's argument goes on to explain to the court that it is not a competitor in the mobile space (this is, after all, a dispute that began with Fortnite on iOS), and makes the point that "Valve is not Epic, and Fortnite is not available on Steam." It further says that Apple is using Valve as a shortcut to a huge amount of third party data that rightfully belongs to those third parties.

The conclusion of Valve's argument calls for the court to throw Apple's subpoena out. "Somehow, in a dispute over mobile apps, a maker of PC games that does not compete in the mobile market or sell 'apps' is being portrayed as a key figure. It’s not. The extensive and highly confidential information Apple demands about a subset of the PC games available on Steam does not show the size or parameters of the relevant market and would be massively burdensome to pull together. Apple’s demands for further production should be rejected."

PC Gamer has contacted both Apple and Valve for comment, and will update with any response.