Epic Sues Apple and Google due to Fortnite getting pulled [2020-08-13, 2021-05-03]

[wco81]

Abuse of monopoly position to force their payment system use.

The argument of being a Monopoly is for the courts to decide.

Maybe.

Any such case would take years to adjudicate.

Apple isn't going to just lie down and accept it. They will appeal it all the way to the highest court. Look how long the Microsoft antitrust case took.

What would happen is that the case will outlast a presidential administration. That's what happened with Microsoft, the Clinton administration started the case and when Bush came in, they backed way off the case.

So it depends on how friendly the company is to the politicians in charge.

The EU could also impose fines. But if say the EU said Apple has to allow side loading, they could abandon that market, because their market share in EU countries are in the single digits everywhere but the UK, which will no longer be a part of the EU.

It would be tougher for Google, because Android has huge market share in those countries.

Actually I didn't follow Fortnite that closely but didn't they start out side loading on Android and then eventually moved to the Google Play Store? So why did they change? They didn't have to pay Google a fee but then moved into the GPS?

 

[manux]

In alternate universe where apple lost would that have implications for sony for example. Could it be this could lead to forcing consoles to becoming more open? This is super interesting case to follow and think about what could be.

https://twitter.com/x/status/1294014566347747334

 

[manux]

Actually I didn't follow Fortnite that closely but didn't they start out side loading on Android and then eventually moved to the Google Play Store? So why did they change? They didn't have to pay Google a fee but then moved into the GPS?

One can still install fortnite to android via epic store(use browser). One cannot install fortnite to ios as only way to install apps as end user is app store. There is big difference between android and ios on what is being allowed.

 

[Malo]

Leonard French often interesting for legal perspective on game industry legal happenings

 

[manux]

There is one loophole apple has been plugging lately. Namely if you have subscription service then provide free app with login and process payments outside the app(browser). This has been pretty normal procedure but now apple is banning apps doing that as apple realized they are not maximizing profit in closed platform. If apple wins google, microsoft, spotify, amazon,... has to give 30% of their monthly subscription fee to apple. As apple stock owner I love this, as a consumer I have mixed feelings.

Epic is not only one who is upset at apple

Last week, the European Commission announced, in response to a complaint filed by Spotify, that it would be opening an investigation into Apple’s App Store practices, which potentially constitutes an illegal breach of EU competition laws. At Proton, we applaud this decision, and also Spotify’s bravery in bringing this complaint in the first place.

https://protonmail.com/blog/apple-app-store-antitrust/

 

[swaaye]

What's Fortnite?

 

[tongue_of_colicab]

Difference between android and ios is that in android alternate stores are possible. In ios only appstore will work for regular users. i.e. fortnite for android is still available via epic's launcher that can be used from browser. For ios fortnite is not available via any means. Being thrown out of google play doesn't mean you cannot sell and install apps for android. Being thrown out of apple's store on the other hand,...

To me it looks like alternate store fronts is the battle epic is waging.

In alternate world what would microsoft be to apple if windows was locked down to ms store only(no more steam, gog,...)

It's fine to hate epic/sweeney but getting alternate store to ios would be beneficial to customers. Btw. I believe xcloud and stadia are also not possible on ios. Epic is not alone in this fight.

I don't think additional stores is really what you want. I remember my HTC one came with three... totally useless. It just causes fragmentation and isn't really consumer friendly.

I think it's much more about lowering/eliminating that 30% cut.

Because let's be honest, in most cases that 30% isn't fair at all. For example why would Apple (or Google etc.) Be entitled to 30% of let's says Netflix monthly fee when the the service Apple provides (store front, bandwidth, Dev tools etc.), and the cost to them, doesn't relate at all to the billions Netflix is investing to create content.

Apple could take a 5% cut and they'd still be rolling in money.

 

[Pressure]

Have in mind that Apple didn't come up with the 30% number on their own. They simply followed the market on that one.

It just so happens that iOS users spend a lot more money compared to other platforms.

 

[pcchen]

Because let's be honest, in most cases that 30% isn't fair at all. For example why would Apple (or Google etc.) Be entitled to 30% of let's says Netflix monthly fee when the the service Apple provides (store front, bandwidth, Dev tools etc.), and the cost to them, doesn't relate at all to the billions Netflix is investing to create content.

But Apple does not take the 30% cut from Netflix, as you don't pay Netflix through in-app purchase. App Store (and I believe Google Play too) has a special rule such that if your app is a pure "content delivery" app, you are allow to handle all payments through your own system without having to provide an in-app purchase option.

 

[Entropy]

In alternate universe where apple lost would that have implications for sony for example. Could it be this could lead to forcing consoles to becoming more open? This is super interesting case to follow and think about what could be.

I agree. It applies to all cases of someone creating a platform that third parties can sell additions to. Consoles are an obvious example on these forums.

 

[tongue_of_colicab]

But Apple does not take the 30% cut from Netflix, as you don't pay Netflix through in-app purchase. App Store (and I believe Google Play too) has a special rule such that if your app is a pure "content delivery" app, you are allow to handle all payments through your own system without having to provide an in-app purchase option.

Didn't they remove that option a while back? I remember Netflix or Spotify (or maybe somebody else) complaining about that.

Anyway whether Netflix pays 30% or not doesn't really matter, I was only trying to give an example of why I think that 30 (or 15)% might be a bit exuberant in a lot of cases.

 

[BRiT]

But Apple does not take the 30% cut from Netflix, as you don't pay Netflix through in-app purchase. App Store (and I believe Google Play too) has a special rule such that if your app is a pure "content delivery" app, you are allow to handle all payments through your own system without having to provide an in-app purchase option.

Apple is trying to remove that loophole, or so it was mentioned earlier in the thread about why Spotify is not happy. https://forum.beyond3d.com/posts/2146359/

 

[iroboto]

totally agree.

 

[BRiT]

nice take video.

 

[pcchen]

Didn't they remove that option a while back? I remember Netflix or Spotify (or maybe somebody else) complaining about that.

Anyway whether Netflix pays 30% or not doesn't really matter, I was only trying to give an example of why I think that 30 (or 15)% might be a bit exuberant in a lot of cases.

Netflix removed in-app purchase option two years ago. They negotiated with Apple for current practice (the "Reader" App caluse). It's not a "loophole" Apple trying to plug, it's allowed under the contract.
Spotify's complaint with Apple is more about the competition with Apple Music (that users can easily pay for Apple Music with the convenience of the in-app system and Apple does not have to pay the fee). Spotify pays very little fee to Apple as most of their users don't use in-app purchase at all.
The problem with Epic is that Fortnite is not a "Reader" App as Apple defined. Apparently Google also believes it's the case. Of course, what counts as "reasonable" depends on what you are doing. There're other smaller players with similar problems (e.g. Basecamp).

 

[wco81]

Apple could take a 5% cut and they'd still be rolling in money.

Sure and Epic, Base Camp and others are counting on the resentment of Apple's wealth to make these PR moves.

But Epic is rolling in the money DESPITE paying 30% aren't they? Otherwise they'd abandon iOS and Android and try to encourage people to use other platforms.

(Whatever happened to the 3DML or other attempts to have 3D graphics through HTTP anyways, no chance they can run Fortnite through mobile browsers?)

OK I should have disclosed earlier, I have a sizable position in AAPL and I obviously know they're trying to increase Services revenues, of which the App. Store is a huge component.

However, I'm responding more to the hypocrisy of these developers, who've been making tons of money through iOS for years, despite the 30%. They are opportunistic since there's a lot of attention on Apple and other big tech companies currently.


I'm fine with Apple being forced to allow side loading or alternate App. Stores, if they're forced to do so, more likely by the EU than the US DOJ. It would be an interesting legal precedent, because it would be a novel way to define monopolies. Like people mentioned, console vendors could see their licensing fees business-model endangered by this precedent.

Apple would probably issue disclaimers that they can't guarantee or necessarily issue patches for security flaws originating from side loaded or 3rd-party app. stores. On top of that, they already have the payment information of hundreds of millions of users already. I think most people with AppleID accounts, with billing information, probably won't bother with third-party app. stores. Sure a big game like Fortnite will cause some number of users to sign up for their app. store or some other 3rd-party app. store which would cut them a deal (cut Epic a deal, not the users).

So in the end, it wouldn't affect Apple that much. In fact they removed Fortnite because it was delivering them $30 million a month, according to one claim I read. A lot of money but a small part of Apple's Services revenues.

 

[tongue_of_colicab]

Netflix removed in-app purchase option two years ago. They negotiated with Apple for current practice (the "Reader" App caluse). It's not a "loophole" Apple trying to plug, it's allowed under the contract.
Spotify's complaint with Apple is more about the competition with Apple Music (that users can easily pay for Apple Music with the convenience of the in-app system and Apple does not have to pay the fee). Spotify pays very little fee to Apple as most of their users don't use in-app purchase at all.
The problem with Epic is that Fortnite is not a "Reader" App as Apple defined. Apparently Google also believes it's the case. Of course, what counts as "reasonable" depends on what you are doing. There're other smaller players with similar problems (e.g. Basecamp).

And why don't they use in app purchases? Because it would make them uncompetitive, especially in cases where Apple offers similar services but obviously isn't paying that 30% fee to itself. Apple's argumentation is rather weak IMHO.

 

[tongue_of_colicab]

Sure and Epic, Base Camp and others are counting on the resentment of Apple's wealth to make these PR moves.

But Epic is rolling in the money DESPITE paying 30% aren't they? Otherwise they'd abandon iOS and Android and try to encourage people to use other platforms.

(Whatever happened to the 3DML or other attempts to have 3D graphics through HTTP anyways, no chance they can run Fortnite through mobile browsers?)

OK I should have disclosed earlier, I have a sizable position in AAPL and I obviously know they're trying to increase Services revenues, of which the App. Store is a huge component.

However, I'm responding more to the hypocrisy of these developers, who've been making tons of money through iOS for years, despite the 30%. They are opportunistic since there's a lot of attention on Apple and other big tech companies currently.


I'm fine with Apple being forced to allow side loading or alternate App. Stores, if they're forced to do so, more likely by the EU than the US DOJ. It would be an interesting legal precedent, because it would be a novel way to define monopolies. Like people mentioned, console vendors could see their licensing fees business-model endangered by this precedent.

Apple would probably issue disclaimers that they can't guarantee or necessarily issue patches for security flaws originating from side loaded or 3rd-party app. stores. On top of that, they already have the payment information of hundreds of millions of users already. I think most people with AppleID accounts, with billing information, probably won't bother with third-party app. stores. Sure a big game like Fortnite will cause some number of users to sign up for their app. store or some other 3rd-party app. store which would cut them a deal (cut Epic a deal, not the users).

So in the end, it wouldn't affect Apple that much. In fact they removed Fortnite because it was delivering them $30 million a month, according to one claim I read. A lot of money but a small part of Apple's Services revenues.

Sure but whether or not the other company is rolling in money as well is besides the point isn't it? Epic is the exception and not the rule. Wouldn't most devs be off a lot better if the cut Apple and co. take was lower than 30%?

I think you need to look at the bigger picture. There basically isn't any competition anymore in the mobile market. It's either iOS or Android. As a dev you don't really have any choice. As such I think the question of "is a 30% of every purchase a fair amount?" is a very valid question.

I think there are good arguments as to why it's too high. OTOH I'm not against Apple or Google making money from their stores either.

That said, Apple in particular has everything so locked down you wonder how they got away with it for so long. They don't even allow different browsers. MS got fined billions for less imo.

 

[dobwal]

Yes.

https://twitter.com/x/status/1294074685018308610

Tommy McClain

Epic is suing Google for more than that. Google torpedoed a couple of agreements that Epic had with Android phone manufacturers regarding having a Fortnite launcher preinstalled on some of their phone models.

 

[dobwal]

Why?

iPhone is not some monopoly. It's got a minority market share, though its customers tend to be higher-income and spend more.

Under what laws would you force Apple to change it's business model? Because Apple is stinking rich so it has to change to a less-profitable business model, so others can get rich?

That's interesting, socialism for corporations.

I'm not the biggest free enterprise guy there is, but okay, if we want to write such laws, have at it.

Just be clear, under existing laws and the existing terms of the deal, Apple is not in the wrong.

But change the laws, probably changes the nature of the country and the world, to decide to limit the profits of a non-monopoly business. They are saying you can be too rich. Are they going to take away Bezos' mansions and jets and Ballmer's NBA team and Ellison's yachts too?

Income and wealth inequality is a problem in the world so lets go whole hog and change that!

Oh BTW, Sweeney himself must be worth at least 9-figures, if he's not a billionaire himself. So let's take his shit away too!

And? Its not like oligopolies are perfectly acceptable market forms. You literally have two companies that basically own the entire smartphone market. The two companies are just pointing at the other as proof they don't have a monopoly. But oligopolies can be just as destructive to a market.

I don't think anyone considers that apple and google's dominant ecosystems has led to market in which conditions have created optimal competition.