Judge in Apple v. Epic Case Sides With Apple on Fortnite and Epic on Unreal Engine [Updated]

[Abazigal]

Interesting comments on TheVerge.

‘Developers are fleeing the Unreal Engine,’ Epic tells court

The latest from Monday’s virtual court proceeding

www.theverge.com

Especially this one by an app developer who has decided to switch from unreal to unity engine.

Playing devils advocate, it will be interesting if it was subsequently decided that the value brought by the iOS App Store was actually worth more than the current 30% cut.

 

[BuffaloTF]

Tbh not ALL of the industry is charging 30% cut. In fact Epic has shown that companies dont need to be taking a 30% cut to be successful.

If anything, Epic is showing that, at minimum, 25% is required to operate a store with basic features. For 12%, Epic does not cover payment processing fees and instead passes them along to the buyers on their storefront - they're keeping a hard 12 for themselves and nothing else. Apple, Google, et al, eat the payment processing fees which can range from 5-25% of the transaction depending on where you are in the world (in other words, a 60 dollar game can become 75 in some markets). If a developer wants Epic to absorb those costs, Epic charges a 25% fee.

Out of their own mouths…

https://twitter.com/x/status/1091025939109199879

https://twitter.com/x/status/1083860234505019392

And what Valve says about those transactions:

https://twitter.com/x/status/1109257799173730304

Beyond the fact that this is incredibly worse for the consumer... it's also worse for the developer. They now need accountants to manage the income and what they need to pay to Epic. That's right, Apple pays out and provides tax documentation. Epic sends you the full money, and an invoice you need to pay and zero tax documentation. So what does Epic do for 12%?

 

[cupcakes2000]

I’ve been waiting for this day for the past 5 years. I feel Apple is much worse than MS was back in the 90s.

imagine if Microsoft Windows required all the apps to pay 30% and must be distributed via the Microsoft store(and disabled installing apps Outside their App Store).
Would Apple Pay Ms 30% of every song or app they sell on iTunes?

gov needs to regulate the OS market. iOS , macs, Android, windows. Consumers should not be forced to only install apps through 1 source - like the App Store. It’s anticompetitive and since there is a duopoly for mobile OS I think the case is strong.

If apple allowed users to download and install apps outside iOS App Store this would be a mute point.

BTW - u can install apps on android outside the play store.

Comparing a computer operating system to a mobile phone operating system is ridiculous at the best of times so this most definitely is not a moot point.

This is misleading. In the USA the market share for iOS is about high 40s% Almost tied with Android. Since this case pertains to the US, we should look at that instead. Android and iOS controller over 98% Of Mobile operating system market (Duopoly), they need to be regulated. Consumers need to have choices if they want to download/install apps from the iOS App Store or from outside the App Store. Apple is intentionally disabling this function to control the app distribution market and take a share of revenue from all app makers. MS would never had gotten away with this in Windows OS. Why should Apple?

Why does this case pertain to the US? The AppStore is a worldwide storefront. Any changes made certainly do not just affect the US.

Look the point is Apple and Google have been running monopolies on the phone industry for a long time. Samsung and Amazon barely even have a stake in that game. Apple doing a knee jerk reaction in threatening the removal of unreal and their dev tools was their "oh sht we do kinda have a monopoly here" reaction. Tbh not ALL of the industry is charging 30% cut. In fact Epic has shown that companies dont need to be taking a 30% cut to be successful. Sure most of all industry companies are taking 30%, but its ridiculous. Even for people who make free mobile games and sometimes charge as little as $1.99 for ad unlock. So they charge 2 bucks and end up with $1.40 giving the store 0.60 per sale. Well if they get a million bucks worth of sales the "store" gets 30% of that. That ends up being $300k out of that milion bucks. Well if you look at a game like Fortnite or a company like Epic they do something like 30million in sales these stores take 10mill put of that. Yet, if you order food, a scarf, a table, or even furniture they take in the range of 0-10% max of that sale. Because its a physical object it deserves to be store taxed lightly, if at all, but a digital product deserves to be store taxed to hell? Its not to upkeep the products and keep them running fine. Its not to upkeep the "advanced servers and related fees" bull they're just greedy. Its just like how Sony and Nintendo went down the multiplayer rabbit hole that Microsoft did, and charging for multiplayer to "cover the vost of the advanced servers." Sure the millions of dollar you're getting is JUST going to that cost. They're both the same thing. Epic has proven with its Epic Games Store 10-15% store tax works just fine to keep a company profitable. This whole 30% thing is so old school reminiscent of when things were starting out. Nowadays these companies just love the big fat paycheck and will fight to keep it because its going to "hurt" the company. Bull if anything it will bring in more devs into creating mobile apps. Also, the 30% cut is not ensuring only high quality games get on the store. There are some crappy crappy games on the App store as well as Play Store, and some of those grab ad revenue only. Does Apple or Google take 30% of each of those too? Kinda hard to split change by 30% isnt it? Yet, those games are allowed to stay on the store. Even the ones that are outright scams. At the end of the day Epic called out the entire industry on its sht and the industry doesn't like it cuz they want to get richer and richer. It has nothing to do about the in game purchasing. It has everything to do with Apple flexing its muscles saying, "Look you give us money and revert your ways, or we will no longer do business with you." Well Apple I'm sorry hate to break it to you, but that would massively hurt you too you idiots. Ok I get banning the game because of a ToS violation, but you also have super inconsistent ToS for things. Either make everything cut at 30% or change the cut of games down to everything else. Its so stupid because its all over some stupid fckn money. Big fckn deal when u die it can't go with you. So Apple either bite the bullet and lower the game percentages or everything else bite the bullet and pay the fckn 30%. Its not that dam hard.

Paragraphs enable the reader to read what you have written.

This will continue long after Wuhan Virus is corralled.

It’s called Coronavirus.

 

[Wildkraut]

Watching the proceedings today over Zoom, the hearing seemed to veer wildly in both parties’ favors. Judge Yvonne Gonzalez Rogers said that there “appears to be some level of anti-competition” in Apple’s practices, and that Apple has “overreach[ed]” in going after Unreal Engine.

Judge In Epic Case Rules Unreal Engine Protected, But Not Fortnite

We’re still waiting on a written decision from today’s court hearing between Apple and Epic, which was to determine whether to grant Epic’s temporary restraining order restoring Fortnite to the App Store and stopping Apple from removing developers’ access to Unreal Engine tools. [Update: we’ve...

kotaku.com

Sadly I can’t Like! my own post... 🤣

 

[needsomecoffee]

This. Have no idea why the focus is on 30%. Apple needs to allow iPad/Phone loading directly from the developer (as they do with MacOS). They also should allow developers to offer an alternative to in-app purchases. Apple store then needs to compete with its value-adds (privacy, security, etc.). Currently - by fiat - Apple owns the environment in which no market competition can exist. The very definition of a monopoly. Arguing the consumers who want choice MUST go to Android to access a freer market ignores many situations in which consumers are harmed by this.

I’ve been waiting for this day for the past 5 years. I feel Apple is much worse than MS was back in the 90s.

imagine if Microsoft Windows required all the apps to pay 30% and must be distributed via the Microsoft store(and disabled installing apps Outside their App Store).
Would Apple Pay Ms 30% of every song or app they sell on iTunes?

gov needs to regulate the OS market. iOS , macs, Android, windows. Consumers should not be forced to only install apps through 1 source - like the App Store. It’s anticompetitive and since there is a duopoly for mobile OS I think the case is strong.

If apple allowed users to download and install apps outside iOS App Store this would be a mute point.

BTW - u can install apps on android outside the play store.

 

[nylonsteel]

this part sound good -
"... but that she was inclined to grant relief with respect to the Unreal Engine used by third-party developers..."

 

[wowotoe]

I’ve always wondered this, but apparently the 30% doesn’t get charged when selling physical items.

Amazon sells digital items too. Like Playstation coupon code

 

[BuffaloTF]

This. Have no idea why the focus is on 30%. Apple needs to allow iPad/Phone loading directly from the developer (as they do with MacOS). They also should allow developers to offer an alternative to in-app purchases. Apple store then needs to compete with its value-adds (privacy, security, etc.). Currently - by fiat - Apple owns the environment in which no market competition can exist. The very definition of a monopoly. Arguing the consumers who want choice MUST go to Android to access a freer market ignores many situations in which consumers are harmed by this.

It's not even close to the very definition of a monopoly...

A manufacturer’s own products do not themselves comprise a relevant market.

A company does not violate the Sherman Act by virtue of the natural monopoly it holds over its own products.

These are direct quotes from case law... the precedent has been set and upheld by:

-Parsons v Ford 1982.
-Spectrofuge v Beckman Instruments 1978.
-TV Communications Network v Turner Network 1992.
-Belfore v New York Times Co 1986.
-Carlock v Pillsbury Co. 1989.
-Elliott v United Center 1996.

Among others.

This is actually demonstrated quite directly by the TRO decision. Allowing the removal of Fortnite on iOS is an only "on its own products" impact. Disallowing development of Unreal Engine with the SDKs and APIs afforded them stretches outside of its own products. For that second part, how? Because it's required, in part, to develop cross-play with other platforms.

 

[mguzzi]

Without the Apple App Store iOS would be as bad as Android with malicious and vulnerable apps. Part of keeping that crap off our devices is that Apple is supposed to vet every app and that costs money and takes resources from Apple which is why the 30% fee to developers. I personally think the 30% fee is a little high but I understand Apple's point. Without the App Store and Apple's Vetting process iOS would be as bad and as hackable as Android.

 

[wowotoe]

It's not 30% on everything.
It's 30% on the price of the app
It's 30% on in-app purchases about digital services, such as the one Epic sells
It's 15% on subscriptions, after the first year, for example with Spotify music service
It's 0% on services (no digital) and on real products

So, to answer your question, Amazon doesn't pay the 30%, because they sell real products. It would be 30% if they sold digital books, but Amazon doesn't sell digital books on the iPhone.

The 30% on digital service is a fee that has to be paid, cause if it wasn't there every developer would put its app for free on the store (so that they don't have to pay Apple), then they would force the user to pay through in-app purchase. This way Apple would not take any money at all.

In Amazon's iPhone app, search 'Playstation digital game', and you can see they sell lots of digital items, including Playstation Now subscription. Amazon doesn't sell digital books on iPhone because they want you to use their Kindle to purchase & read.

 

[ravenstar]

The way I see it is yes during the pandemic that is going on fortnite is a valuable game that people do use to talk to their friends that they cannot see. But at the same time I do understand my apple was angry and why they're doing what they're doing. But at the same time like Apple is a really wealthy company and all this is showing me and that I am perfectly fine owning my Android because here's the thing Google Play to kick it out of there app store 2 but you can still download it through epicgames itself onto your phone and onto Android devices that's one thing that I don't like about Apple products is you have to either get it through their store or you won't get it on certain things and send me if each side is really wanting to be about the customers than what they need to do is Apple needs to make it where they can still download it onto their phone without using their app store so then people that have a iPad or whatever can still download fortnite but fortnite won't be in there app store which won't be going against their code and everybody it's a win-win but that would be way easier than going through a trial because I mean it's 2020 compromising is not a thing

So you can choose another device, download and play the game without any interference from or paying royalties to Apple? So explain to me again why Apple should be obligated to make this possible on their devices?

I just don't understand why other developers aren't terrified of the implications of forcing Apple to relinquish control of their creation. If it happens to them, it could happen to you.

 

[leman]

Every Apple fanboy stands blindingly in line, hating on Epic. Yet you guys fail to realise that if Epic succeeds, consumers and developers will be the ones who'll benefit from it. A lower apple purchase tax means more great apps from more talented people and less IAP.

Not how I see it. Sure, a lower App Store tax would be great for everyone. But that is not what Epic fights for. They are fighting for the “freedom” not to pay anything. Which ultimately will benefit big corporations like Epic and put more burden on a small-time developer. The beauty of the App Store is that it is funded by success and it provides equal opportunities. Everyone has access to the same platform and services, and everyone shares part of their revenue, which essentially means that more successful developers are paying for others opportunity to become successful. It’s an almost solidary system. Epic wants to break this system, they don’t want to pay for infrastructure that less successful developers are using.

Epic's lawyer's argued that asking Epic to capitulate and go back to the status quo is akin to "asking us to require consumers to pay more than they should in a competitive environment" and that it had antitrust implications.

The above quote is such a huge lie from Epic. When a new console game is released, the price in the digital store on the console is going to be the same as buying a physical copy at a store. That's despite the fact that developers/publishers get a 70% cut on digital and a much lower 45% cut in a brick/mortar store. If what Epic was claiming about the App Store were true, and that developer/publishers would lower the price without Apple's 30% cut, why aren't they already doing that with console games? Shouldn't they already be 25% cheaper to buy on the console's digital store?

To add to this, Epic does some weird tax manipulations that border on fraud. A game on the German and Swiss Epic store costs the same, even though Switzerland has significantly lower VAT. Epic also does not show a VAT on the purchase receipt (which is illegal as far as I know).

 

[Abazigal]

This. Have no idea why the focus is on 30%. Apple needs to allow iPad/Phone loading directly from the developer (as they do with MacOS). They also should allow developers to offer an alternative to in-app purchases. Apple store then needs to compete with its value-adds (privacy, security, etc.). Currently - by fiat - Apple owns the environment in which no market competition can exist. The very definition of a monopoly. Arguing the consumers who want choice MUST go to Android to access a freer market ignores many situations in which consumers are harmed by this.

Apple isn't a monopoly just because they refuse to allow unregulated app stores on their platform, so I wish people would just stop slinging the term around willy-nilly.

Maybe it does suck that Apple doesn't give out a bigger cut when they are making so much money, but developers are not entitled to that. They chose to put their app there because they know it will sell better than anywhere else. That's not a monopoly.

 

[ravenstar]

....
Umm... no. Fifteen million people side-loaded Fortnite on Android in the first month. So that's simply not true. I mean yes, that's only a little less than half as many as downloaded it on iOS, give or take, but the Android version also ran on only the most recent phones from... I think only a single Android manufacturer (Samsung) at the time, versus every iOS device built in the past five years, so it's not exactly a level playing field.

Another way of looking at this is that Apple invests in supporting its devices for a longer period of time and thus creates a larger market for iOS apps.

 

[Rogifan]

Interesting comments on TheVerge.

‘Developers are fleeing the Unreal Engine,’ Epic tells court

The latest from Monday’s virtual court proceeding

www.theverge.com

Especially this one by an app developer who has decided to switch from unreal to unity engine.

Playing devils advocate, it will be interesting if it was subsequently decided that the value brought by the iOS App Store was actually worth more than the current 30% cut.

Who would decide that? I don’t expect any judge or government regulator to say what the percentage should be. If they decide anything it will be allowing alternate payment options in-app and/or allowing alternate ways/places to get & download apps.

Apple isn't a monopoly just because they refuse to allow unregulated app stores on their platform, so I wish people would just stop slinging the term around willy-nilly.

Maybe it does suck that Apple doesn't give out a bigger cut when they are making so much money, but developers are not entitled to that. They chose to put their app there because they know it will sell better than anywhere else. That's not a monopoly.

But the point about competing still stands. Apple doesn’t have to justify the 30% because they’re not really competing with anyone else. It‘s highly unlikely someone is leaving iOS for Android because of IAP. Listen to some of the recent ATP podcasts and Marco Arment brings up some things Apple could be doing better with regards to payment processing services they provide. He thinks if Apple had to compete with Stripe and other 3rd parties they’d improve their service. I’d also argue IAP services should be separate from App Store services (hosting, review, downloads etc). They shouldn’t be bundled together as one thing. Allow 3rd party payment options in-app and separate the fees charged for IAP vs those for app development and hosting.

 

[MauiPa]

Totally not seeing Epic's point. Comply, offer cheaper alternatives on their web site (just can't point specifically to the cheaper options, but could incentivize customers to go to the web site). Done. Kind of the Spotify model without the whining. Almost everyone knows you can download Spotify free and use your paid subscription from outside the App Store, without paying fees. So really, is the false indignation worth it?

Seeing Apple charges what Google charges, it can't by definition be too much (it is the market after all). And don't go with false equivalencies that you can use alternative app stores on Google bypassing the fees, because you can set your own payment system outside the Apple App store, also bypassing the fees

 

[chrixxa]

i actually 100% agree with the judge so far

 

[Reindeer_Legal]

Comparing a computer operating system to a mobile phone operating system is ridiculous at the best of times so this most definitely is not a moot point.

Why does this case pertain to the US? The AppStore is a worldwide storefront. Any changes made certainly do not just affect the US.

Paragraphs enable the reader to read what you have written.

It’s called Coronavirus.

Explain why supporting touch gestures allows an OS to somehow legitimize monopoly?

 

[Wildkraut]

I see EPIC winning, and Apple paying huge damages to EPIC and it’s customers, for the time Fortnite wasn’t playable on iOS.

I would like to see a class action of sole iOS fortnite users, too.

The prophet!

 

[Rafael Freitas]

Explain why supporting touch gestures allows an OS to somehow legitimize monopoly?

iPhone and iOS is not a monopoly, Android is what 85-90% market share, come on now.

 

[Ethosik]

Umm... no. Fifteen million people side-loaded Fortnite on Android in the first month. So that's simply not true. I mean yes, that's only a little less than half as many as downloaded it on iOS, give or take, but the Android version also ran on only the most recent phones from... I think only a single Android manufacturer (Samsung) at the time, versus every iOS device built in the past five years, so it's not exactly a level playing field.

If it was so profitable, why was Fortnite brought back to the Play Store? Even if you say its a calculated move for where we are now, that doesn't make Epic look good.

Fact is, Epic complained how difficult it was for users to side load. They must have felt not enough users would side load. Therefore, it was brought back to the store even though they hate the 30% cut.

 

[I7guy]

I see EPIC winning, and Apple paying huge damages to EPIC and customers, for the time Fortnite wasn’t playable on iOS.

The prophet!

You "see" Epic winning? It already seems like it's a split decision, where this will be tied up in the court system for years.

 

[McKodiak]

Other companies that have negotiated with Apple for a different % have offered and given Apple something else in value that either equates or is greater than the original percentage. This makes the comparisons everyone is making to the likes of Amazon impractical. Does Epic have anything of value to offer Apple? Free in game advertising maybe?

 

[Reindeer_Legal]

You "see" Epic winning? It already seems like it's a split decision, where this will be tied up in the court system for years.

Nah. Apple's gonna settle. Apple won't win.

 

[I7guy]

Nah. Apple's gonna settle. Apple won't win.

Nope. Apple will fight it out and prevail. Shall we place on-line bets since we're both spitballing?