Antitrust concerns have resurfaced this year as various government agencies have launched investigations into the market power of big tech companies. But public servants aren’t the only ones concerned about the power of Big Tech; private companies are also on the attack.
The most notable example is the legal battle between video game giant Epic Games (developer of the video game Fortnite) and Apple, the most valuable company in the world. Here’s a history of the ongoing feud, the latest developments, and how it all might affect you.
What’s rotten with Apple?
For Epic and other developers, Apple’s control of the App Store is the sticking point. This was one of the issues brought up at the House Judiciary antitrust hearing in July. Critics contend that Apple uses its control over the App Store, the gateway to iOS users, to extract excessive cuts of revenue (up to 30%) from app developers.
Apple CEO Tim Cook responded to this line of argument from the Judiciary Committee by saying that Apple faces competition from other platforms like Android. He also argued that the App Store has enabled small developers to reach an audience they couldn’t have otherwise, calling it an “economic miracle.”
Epic broke Apple’s rules, promptly got removed
Fortnite is one of the biggest games in the world with over 350 million registered players as of May. The game is free to play, but players can spend money to unlock things like cosmetic items for their characters, and this allows the free-to-play game to make billions in revenue.
Like Google, Apple allows developers on the App Store to conduct in-app purchases, but it collects a 30% commission on those transactions, and this is where Epic took umbrage. In July, Epic Games founder Tim Sweeney criticized Apple and Google for taking too large a cut from developers, calling the practice “terribly unfair and exploitative.”
On August 13, Epic added a new feature to Fortnite on iOS and Android, allowing users to make their in-app purchases directly from Epic (at a discount), bypassing Apple and Google.
Apple responded by removing Fortnite from the App Store, and Google did the same on Google Play. Epic quickly filed lawsuits challenging the companies and claiming anti-competitive practices. Epic also released a video parodying Apple’s classic 1984 ad, this time with an apple-man as Big Brother. Epic’s quick response suggests the company was expecting a fight.
Apple threatens Epic further
On August 17, Epic claimed that Apple was planning to revoke Epic’s access to development tools for iOS and MacOS, a claim Apple later admitted was accurate.
Apple removed Fortnite from the App Store and has informed Epic that on Friday, August 28 Apple will terminate all our developer accounts and cut Epic off from iOS and Mac development tools. We are asking the court to stop this retaliation. Details here: https://t.co/3br1EHmyd8
— Epic Games Newsroom (@EpicNewsroom) August 17, 2020
This decision would have repercussions throughout the world of game development. Epic makes the Unreal Engine, which is widely used by other developers.
Epic filed a motion seeking a restraining order against Apple, arguing that Apple’s decision was retaliation and would cause “irreparable harm” to Epic, and that it went against the public interest and violated the Sherman Act. Epic sought to have both Unreal Engine access and Fortnite restored.
California judge gives Epic a partial victory
On August 24, Epic and Apple attended a virtual court hearing on the matter.
Judge Yvonne Gonzalez Rogers concluded that the developer had strategically breached Apple’s policies, but also that Apple’s action in barring Epic from developer tools would be harmful both to Epic and the public interest.
“The record shows potential significant damage to both the Unreal Engine platform itself, and to the gaming industry generally,” she writes, “including on both third-party developers and gamers.”
Rogers granted Epic a partial restraining order, which restored developer tools but that did not compel Apple to return Fortnite to the App Store.
Where do we stand now?
The companies will continue to duke it out in court, possibly for a long time. The legal action is due for another hearing in September. For players, the most immediate impact is that you won’t be able to download Fortnite from the App Store anytime soon.
However, if you already had Fortnite installed, you can still play it for now, but you won’t have access to new content when the next season comes out.
Google’s side of things
Google is actively trying to distance itself from the Epic and Apple battle, and on September 3 it filed a response to do so. The company wants the court to know that Apple versus Epic and Google versus Epic are two distinct issues.
“Android and iOS compete to attract app developers and end users, but the conduct underlying their competition — and at issue in these two separate sets of lawsuits — is distinct,” the filing said. ” … Apple and Google each have their own separate and unique negotiations and contracts with app developers and original equipment manufacturers. These fundamental differences in the way Apple and Google support app distribution create key distinctions in the claims and defenses in the iOS/Apple Cases and Android/Google Cases.”
Despite Google’s plea for a distinction, Epic continues to claim Google’s practices are also anti-competitive.
In April, Epic Games told Polygon that “Google puts software downloadable outside of Google Play at a disadvantage, through technical and business measures such as scary, repetitive security pop-ups for downloaded and updated software, restrictive manufacturer and carrier agreements and dealings, Google public relations characterizing third-party software sources as malware, and new efforts such as Google Play Protect to outright block software obtained outside the Google Play Store.”
Updated on September 8, 2020: Added information on Google’s dispute with Epic.