If you’re a fan of Fortnite, then you’ve probably heard of its publisher, Epic Games. Epic is famous for making many other 🎮 hit games, including Gears of War, Bulletstorm, and the Infinity Blade series. Now, Epic has now taken on a new challenge—Apple.
Epic Games sued Apple last summer for antitrust violations after Fortnite was booted off the Apple App Store for attempting to bypass the platform’s payment system. The publisher claims Apple is running a monopoly and needs to make fundamental changes to its app store.
If this lawsuit succeeds, it could change the Apple App Store’s entire business model 📈 and potentially the entire iOS ecosystem. This is already being called one of the biggest antitrust lawsuits in the history of big tech. Here’s everything we know about the case.
What Did Epic Games Do Wrong?
In August 2020, Epic updated the Fortnite iOS app to include a virtual currency that would allow users to pay Epic directly and bypass Apple’s payment system, which takes a 30% cut. This broke the App Store’s terms of service, so Apple naturally responded by kicking 👢 Fortnite out of its app store.
Epic immediately responded by filing an antitrust lawsuit. The suit claims Apple is using its position to beat competitors and run a monopoly. In addition to the 30% cut the store takes from all initial purchases and subsequent in-app purchases, developers have to follow strict rules laid out by Apple. The app store must approve all apps 📱 before anyone can install them.
Epic isn’t the first developer to complain about the rules Apple has set up around its app store. The Apple app store is the only way developers can get their software on Apple devices, giving Apple a huge amount of power to throttle access to customers. Netflix, Spotify, and news publishers have also complained about the arrangement. All of them argue that the 30% cut 💰 Apple takes from every transaction is too much. They also complain about the way Apple controls access to buyers’ and subscribers’ personal info. Finally, Apple forbids developers from telling customers about the option of paying for services outside the app store, which rubs many developers the wrong way.
There’s one oddity in the Epic case: The Apple App Store isn’t the only platform that takes a 30% cut from microtransactions. Other platforms, including Microsoft and Sony, also take 30% from transactions. However, Epic hasn’t complained about them. News sources speculate that Epic Games CEO Tim Sweeney might have a personal vendetta against Apple and Google. By his own admission, Sweeney believes the tech giants are taking advantage of app developers.
“It’s not just Epic being exploited by Apple, but it’s every developer who goes along with that scheme colluding with Apple and Google to further their monopoly,” Sweeney told NPR. “These stores are making a lot more money from creative works than the creators.”
Could Epic Games Win the Lawsuit?
Unlike other developers who have complained about Apple, Epic actually has the resources to fight back. The company has a $29 billion 💵 valuation, and Sweeney himself is worth over $7 billion. However, having money doesn’t mean Epic will automatically win its case.
Epic’s main argument is that Apple’s control over what apps are on its devices constitutes an illegal monopoly. Epic hopes to get the freedom to run its own payments and distribution platform within Apple’s ecosystem—separate from the app store. But there isn’t a legal precedent ✔️ of courts ruling against companies that control the market for their own products.
Apple’s counterargument is simple: It can’t be a monopoly because it doesn’t own the phone market—it shares it with Google’s Android. Gamers can also play Fortnite on devices by other companies, including Microsoft, Sony, and Nintendo. Apple also argues that it built its app store and the iPhone, so it should have the right to dictate the terms that govern its ecosystem. Epic basically wants the right to run its own store with its own rules.
Apple’s Mounting Antitrust Problems
No matter who wins the Apple vs. Epic case, there is almost certain to be an appeal. The final verdict likely won’t be the end of the story. Spotify 🎼 has also been making noise about the 30% percent fee Apple imposes on its subscription revenue. While it hasn’t sued Apple directly, it has pushed lawmakers in the U.S. to pursue antitrust actions against Apple.
Other countries 🌎 are also taking action against Apple. For example, the Australian Consumer Commission recently said Apple needs to improve how it operates for developers or face regulation. The UK is also reportedly investigating Apple over similar charges.
The next three weeks will be interesting as the Apple-Epic fight continues. There’s a good chance the outcome could change the way Apple—and your iPhone—works. It could also prompt lawmakers to pursue more aggressive antitrust legislation in the U.S. and abroad.