Battle Royale

Epic Games, Apple, and Google just started a digital World War over the Fortnite app

Per Apple, Epic Games allegedly violated its 30 percent payment cut rule with its own payment plan. Per Epic, Apple's a bully.

Just hours after Epic Games, the creator of Fortnite, announced that it would allow users to make purchases directly within its own app, Apple kicked Fortnite off its marketplace. The decision comes with pronouncement by Apple that Epic Games violated the company's agreement to share 30 percent of its app revenue with Apple. Fornite is currently one of the most popular and profitable games on the market — and possibly of all time.

Upon removing Fortnite from the App Store, the company released the following statement:

Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users. As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.
Epic has had apps on the App Store for a decade, and have benefited from the App Store ecosystem - including it's [sic] tools, testing, and distribution that Apple provides to all developers. Epic agreed to the App Store terms and guidelines freely and we’re glad they’ve built such a successful business on the App Store. The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users. We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store.

Rotten, Apple — This is misleading on Apple's part, as many of the App Store's "equal" guidelines are regularly broken by the company's largest app providers, including Amazon, Netflix, and Google. In its FAQ about the new payment options, Epic noted that "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonalds, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps." It's also pretty rich of Apple to word this all in such a way as to paint Epic Games, creator of the largest video game franchise in modern memory, as lucky to survive on Apple's altruistic goodwill alone.

Objection — Epic knows that these practices won't look good in any court case against Apple, especially with the current anti-trust political winds whipping through Washington. Epic's strategy here is clear: Break the rules, get punished by Apple, show consumers and politicians exactly the kind of power Apple can flex over developers and consumers, and declare war. But the masterstroke itself is that Epic is positioning this as a way for consumers to save money — by the lowering the price of its in-game V-buck currency in accordance with the removal of Apple's 30% fee — and not just a shameless cash grab on their own part.

To begin its battle against Big Tech's largest Goliath, Epic Games has filed a lawsuit alleging that Apple violated the Sherman Act and asking the court to force Apple to change its App Store policies. In addition, they've released a compelling statement that they'd clearly had prepared prior to the day's events. Here's some selected portions of the 65-page document which we recommend reading:

Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history...
Contrast this anti-competitive harm with how similar markets operate on Apple’s own Mac computers. Mac users can download virtually any software they like, from any source they like. Developers are free to offer their apps through the Mac computer App Store, a third-party store, through direct download from the developer’s website, or any combination thereof. Indeed, on Macs, Epic distributes Fortnite through its own storefront, which competes with other third-party storefronts available to Mac users. App developers are free to use Apple’s payment processing services, the payment processing services of third parties, or the developers’ own payment processing service; users are offered their choice of different payment processing options (e.g., PayPal, Amazon, and Apple). The result is that consumers and developers alike have choices, competition is thriving, prices drop, and innovation is enhanced. The process should be no different for Apple’s mobile devices. But Apple has chosen to make it different by imposing contractual and technical restrictions that prevent any competition and increase consumer costs for every app and in-app content purchase—restrictions that it could never impose on Macs, where it does not enjoy the same dominance in the sale of devices. It doesn’t have to be like this...
In contrast, software developers can make their products available to users of an Apple personal computer (e.g., Mac or MacBook) in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 3%, a full ten times lower than the exorbitant 30% fees Apple applies to its mobile device in-app purchases...
Epic is not seeking monetary compensation from this Court for the injuries it has suffered. Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.

Double standard — This reckoning has been a long time coming for Apple, as developers have spent the year revolting against the company's high fees, controlling review process, and discrimination against many kinds of apps. Gaming companies in particular are frustrated that they cannot offer streaming experiences or content that, while ESRB-rated or reviewed by similar international equivalents, is not given the all clear by Apple. Apple does not hold third party browsers, remote desktop apps, or television, music, or podcasts apps to these same onerous requirements.

Teams — One the other hand, this could just be an attempt by Fortnite's parent company, Tencent, to punch back at the United States on the heels of President Donald Trump's recent bizarre executive orders regarding TikTok and WeChat. This isn't CEO Tim Sweeney's first time criticizing Apple, but there is no ethical consumption under capitalism. Whoever wins, we lose.

Genius — Ever the shrewd self-promoters, Epic also timed today's events to perfectly coincide with their latest in-game event. Putting additional salt into the wounds of Apple's beleaguered iOS audience, the developer screened a version of Apple's infamous 1984 commercial where the company declared war on IBM's market control and exploitative business practices. Poignant.

Déjà vu, huh?

Battle royale — Users who have previously downloaded the game are still able to use the app on their phones but new downloads will not be available through Apple's App Store. iOS users will also not be offered Google Stadia, Xbox Game Pass, PlayStation Now, GeForce Now, the complete Facebook Gaming app, or Steam's streaming service due to Apple's App Store policies. If you're financially able, maybe consider switching to Google's far more open Android platform.

Update: In a move similar to Apple, Google has also removed Epic's Fortnite app from its Play Store. The difference on Android, however, is that Google's users are free to download apps from the open internet or competing third-party stores. Epic has previously pulled Fornite from Google's store in 2018 to focus on direct distribution and is currently directing players to the Samsung Galaxy Store and its website. Google's statement on the matter reads as follows:

The open Android ecosystem lets developers distribute apps through multiple app stores. For game developers who choose to use the Play Store, we have consistent policies that are fair to developers and keep the store safe for users. While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies. However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play.

Another update: As it did with Apple, Epic has now also filed a lawsuit against Google. The case for antitrust violations against Android is going to be a lot harder to prove because of the platform's inherently open nature. Though the language is nearly identical to that of the suit against Apple, this suit has also added a knock on Google's former "don't be evil" motto, reading:

"Twenty-two years later, Google has relegated its motto to nearly an afterthought, and is using its size to do evil upon competitors, innovators, customers, and users in a slew of markets it has grown to monopolize."

Google does plenty of dirty deeds, but as the company allows third party apps and app stores on its platform and open sources its work, its harder to see Epic's point here. Good luck and may the best tech company win!

Yet another update: Samsung has also pulled Fortnite from its Galaxy Store, where it was once exclusively offered. Things are getting spicy!