Epic Games Sought Side Deal for Fortnite Prior to Lawsuit, Apple Says in Court Filing [Updated]

[Jury]

How exactly would this make them lose in court? The email literally says they want these rights for all developers. That's not illegal.

No doubt, Apple is confused by what it means and the antitrust lawsuit is not seeking to change the entire app store policy.

In case you forgotten, it's illegal to restrict third-party from competing in the market and the department of justice successfully prevented Microsoft Web Browser for conducting abuse of monopoly position and rectify the policy to allow the customer to select an alternate choice of browser.

The purpose of the antitrust lawsuit filed by Epic against Apple app store policy is to provide choice instead of forced to use a 30% fee imposed by the Apple payment method for purchasing a subscription and in-app purchases.

 

[bsolar]

There are alternative App Stores. Use Android to access them.

This will be the deciding factor of course: Apple will argue that it's a free market and there are alternatives outside of its platform, Epic will argue that Apple's platform is in a position of strength allowing it to distort the free market anti-competitively.

You cite 15% market share for iOS: where does the number come from? E.g. a quick google search returns over 50% market share for iOS in the USA.

 

[threesixty360]

I disagree. I like the mac experience infinitely better, which allows me to get software in the way I like. I can choose to use Steam for gaming apps, I can download software directly. I can download software on the Mac that is not possible to get on the iPhone. So much for "friction free"

I don't know what you mean with flash, since it is essentially deprecated on desktops as well.

you may like the mac way better and that is fine. My point is that it doesn’t offer better security than iOS when it comes to delivering and removing applications on a system. And where that system is an emergency device like a phone that becomes very important.

I can’t have my phone just freeze or crash because an app in the background I have given permission to starts changing things in system files and memory locations other services/apps are using!

I need my phone to dial 999 at all times. I don’t need my mac to do that.

for older mac users, flash was the battle Apple had to deal with on the mac. Essentially a third party platform you could install to run software on that was a performance drag and had many security vulnerabilities.

Apple asked Adobe to fix it and adobe couldn’t be bothered. And Apple kept receiving customer complaints that there mac was performing badly etc and they worked out it was pretty much all users that had installed flash.

which is why when jobs made iOS he said if you can’t make flash perform well then you can’t be on our phones. And also took the stance to ban third party runtimes etc. Because it would be out of their control and they wouldn’t be able to guarantee that you could dial 999 whenever you wanted on your phone Etc

 

[D4vidrim]

The purpose of the antitrust lawsuit filed by Epic against Apple app store policy is to provide choice instead of forced to use a 30% fee imposed by the Apple payment method for purchasing a subscription and in-app purchases.

You are oversimplifying, cause it is not just about the payment system. If you allow in-app purchases without Apple, you are then telling developers to offer every single app for free and then force users to pay the app with the IAP (without Apple fee), leaving Apple with no fee at all.
The 99$/y doesn't make enough money to run the store, so Apple would have to raise that price, building higher barriers to new developers.
Think about the consequences of your proposal, cause it is not just about a different system for paying.

 

[D4vidrim]

which is why when jobs made iOS he said if you can’t make flash perform well then you can’t be on our phones. And also took the stance to ban third party runtimes etc. Because it would be out of their control and they wouldn’t be able to guarantee that you could dial 999 whenever you wanted on your phone Etc

Flash was great for developers, Absolutely worse for end users. At the end users won and we don't have Flash on any platform.

 

[Jury]

Earlier this week, Epic Games levied a lawsuit against Apple after Apple pulled popular game Fortnite from the App Store for defying Apple's App Store policies surrounding in-app purchases, launching a legal battle between the two companies.

​

Apple has also likened Epic Games' behavior to a shoplifter. "If developers can avoid the digital checkout, it is the same as if a customer leaves an Apple retail store without paying for shoplifted product: Apple does not get paid," Apple said.

Apple statement of defense is just ridiculous and the use of an analogy is incomparable from top to bottom.

 

[Analog Kid]

This will be the deciding factor of course: Apple will argue that it's a free market and there are alternatives outside of its platform, Epic will argue that Apple's platform is in a position of strength allowing it to distort the free market anti-competitively.

You cite 15% market share for iOS: where does the number come from? E.g. a quick google search returns over 50% market share for iOS in the USA.

13% worldwide

IDC - Smartphone Market Insights - Home

Detailed market size and share trends empower companies selling Mobile Phones to get ahead of market changes and compete more effectively. Sign up!

www.idc.com

47% in the US

U.S. smartphone shipment share by vendor 2020| Statista

Apple consistently held the highest share of the U.S.

www.statista.com

 

[Zellio]

Apple statement of defense is just ridiculous and the use of an analogy is incomparable from top to bottom.

Hi Eisberg

 

[bsolar]

13% worldwide

47% in the US

Thanks for the references. I wonder what will be used to determine Apple's position in this specific case: the difference is quite significant.

 

[Coconut Bean]

But what about Xbox? But what about PlayStation? But what about Switch? But what about Google Play?

Google Play doesn't have the same ridiculous iron curtain rules. XBox and PlayStation arguably gives something back to Epic with the various early access and influence over hardware (there is a great keynote by Epic CEO on PS5 hardware) and optimizations etc for the engines. If I recall correctly they also get the live servers hosted by Sony/xBox for live games.

 

[Expos of 1969]

Which happens every day in hotels and on flights.

But hotels and airlines do not tell the public that all customers pay the same and are treated equally...

 

[Coconut Bean]

So using your example, you think it’s cool to charge one person 150/night but another person 300/night for the same room because reasons? How about a grocery store that charges one customer 1.50 for a bag of chips but makes another customer pay 3.00 for that same bag?
You’re completely onboard with that and feel this is the behavior of a good and ethical business? Oh I’d love to hear your argument for this.

Sometimes I wish that Apple started charging 30% fee for Apple Card for all the fanboys to understand.

It would be more reasonable than for apple pay as it is technically more complicated stuff that goes on there and you have to provide physical card, only for payments etc.

But yeah apple doesn't do it, because it wouldn't be competitive.

 

[Coconut Bean]

You rent a house in a crappy neighbourhood with no police presence or security it costs you $150 a night

You rent that exact same house in a safe, peaceful subdivision in a nice city it costs you $300

That's not how Apple's rules work. You'd be forced to rent the other house for $300 as well.

Yes, IF other payment options are provided they are not allowed to charge more than Apple Pay.

 

[Taipan]

I‘m not sure about the whole thing, but in my opinion it sounds like Apple‘s point in this specific argument is 100% logical.

 

[Analog Kid]

Thanks for the references. I wonder what will be used to determine Apple's position in this specific case: the difference is quite significant.

What I can't find is what percentage of the gaming market they represent.

Any way you slice it though, Apple falls short of a monopoly and their rates are in line with their industry. The government is generally loathe to intervene in private business unless they see signs of abuse.

A lot of people keep pointing back to Microsoft in the 90's. MS had in excess of 90% market share and there was a long trail of email showing abusive business practices. I haven't seen an Apple communication yet suggesting they want to cut off Epic's air supply.

 

[D4vidrim]

I was wondering, what would happen if Apple conceded competitive app stores, gave them the possibility to use different payment system, but still following Apple's guideline for apps and still charging the 30% on apps and IAPs?
Would Epic be ok with that?

 

[Seanz]

Depends whether Apple will pull the killswitch on all Fortnite apps on current iPhones. Pretty much all of the kids nowadays have it installed on their iPhone. If anything, Epic's revenue won't be affected.

When Epic moves to season 4 they are flicking their own kill switch for apple devices, because season 4 will require an update that cannot be pushed out to apple clients.

 

[Wildkraut]

Nice article update, shows how Apple likes to distort things, and publicly lie to gain advantage. Good that Tim Sweeney posted the original Email. What a bunch of scumbags.

 

[bsolar]

Any way you slice it though, Apple falls short of a monopoly and their rates are in line with their industry. The government is generally loathe to intervene in private business unless they see signs of abuse.

I don't think Epic is arguing that Apple is a monopoly in the smartphone market in the first place and I'm quite sure they would be defeated if that's the basis for their lawsuit. AFAIK not all anti-trust regulations require a monopoly to be enforceable though: for some a significant position of strength in the market is enough.

To be clear, IMHO it will be difficult for Epic to prevail, but it doesn't mean I consider some of their complaints meritless.

 

[Sam Romeo]

Incorrect. Video streaming, games etc. are delivered by Netflix, Epic etc. servers. Apple has nothing to do with it.

Incorrect. I said “severs of the App Store”. Obviously platforms have their own severs for their content, but the App Store will obviously be on Apple’s servers. Try reading my comments before replying please, it saves us all time.

 

[Naaaaak]

Epic Games CEO Tim Sweeney called Apple's statement misleading because Epic's email also asked for the concessions to be made available to other developers

As that undercuts Apple's claim, perhaps the headline should be changed to more than [Updated]?

Epic Games Sought Side Deal for Fortnite, Apple Says; Epic Disputes [Updated]

Apple and Epic Games Dispute Side Deal Claim for Fortnite [Updated]

or something?

 

[Sam Romeo]

Epic does not need any of this from Apple. Apple requires them to use Apple store, API, etc. The only thing Apple testing does is to guarantee that the app does not break Apple rules (which are there to maximize Apple profits)

Quite obviously Epic needs these things from Apple. I’m not sure what world you live on if you think Epic can get an app onto iPhones without Apple’s severs, codes, and permission...

 

[Sam Romeo]

If only it was that simple. You can have Mona Lisa with mustache. Buy it and draw the mustache. I bought my iPhone. Can I have my alternative app store now?

Not if your Mona Lisa contract said you weren’t allowed to draw a mustache on it. Just like how when you agreed to the terms of iOS (you know, that software that costs millions in development that you get for free every year) that you wouldn’t do certain things (like run unauthorised software).

 

[mrcloaked]

I notice certain comparisons.

 

[smetvid]

Apple has clearly violated the antitrust law if you as the customer or developer can't use a third party payment method for in-app purchases and subscriptions.

The 30% fees imposed by Apple own payment method must be optional without restricting other payment methods to be used in purchasing a subscription and in-app purchases.

That is not antitrust. Apple 100% allows anybody even direct competitors like Microsoft and Google to create apps and distribute either for free or paid through the App Store. Even if a competitor outsold an Apple equivalent app Apple still wouldn't restrict it. Anybody is allowed to participate in the market place. There are no restrictions at all. Apple has a fee for that service much like a tax to keep that service in top shape. One doesn't run a market place of this scale for free.

Antitrust is to protect certain markets but never used as a way to crush one market just so others can exist. That is essentially what would happen if anybody could provide their own market place. Every developer would handle their own payments and app distribution or there would be 5000 Steam like market places meaning the App Store itself would likely cease to exist.

Should Target be forced to accept a Wal-mart gift card? Should Apple devices be forced to install Android OS? Should MacOS be allowed to be installed on any computer hardware? There is antitrust and then there is just complaining.

Apple isn't restricting Epic where they can't sell digital goods and earn money. Epic can sell as many digital goods as they want. Apple isn't really restricting any part of the market. Epic just doesn't want to pay the tax like a greedy corporation.

Lets say for a second Apple has to allow 3rd party payment methods. Apple would have to start charging rent instead of a tax. They would have to treat it like a web host provider where a developer pays monthly. That means any free apps would suddenly lose money. Any apps that earn very little money would also lose money. Nobody wins in that situation at all. What Apple did was create a fair system for all developers. If an app sells one copy at $0.99 Apple only ever gets 30%. If an app sells $1,000,000 then Apple gets $300,000. Yeah that may seem irritating to those apps that do sell that much but what is fair is fair. Its like taxes. Yeah the big corporations complain they have to pay so much in taxes but that's how the system works.