Spotify Sides With Epic Games in Battle Against Apple's App Store Fees

[jonblatho]

Epic could stop producing games for iOS and macOS right now and Apple wouldn’t even notice. Epic apparently needs Apple more because they wouldn’t be doing this if they didn’t

Epic did this knowing that Fortnite would be removed from the App Store; anyone who believes otherwise is kidding themselves. Why? So that they'd have standing to sue.

And this is what they’ll probably end up doing. They knew there was a right way to do what they’re trying to do and likely have that build of the app already ready to be reviewed and posted.

Apple doesn't allow that. Under current App Store Review Guidelines, games aren't considered "reader" apps, which are exempted from the requirement to use IAP and only IAP. Apple would refuse to approve Fortnite app updates other than bug fixes, and perhaps threaten removal from the App Store, unless and until Epic added IAP as their only payment option.

Like I said elsewhere, if they'd be breaking the rules anyway, they might as well go all-out.

 

[eoblaed]

The fact is, there are ways around the App Store requirement without actively and explicitly breaking the rules. For example, Epic Games can set it up so that the only way to buy V-Bucks is on the desktop, but the VBucks is tied to your account so you have access to it on any device.

And this is what they’ll probably end up doing. They knew there was a right way to do what they’re trying to do and likely have that build of the app already ready to be reviewed and posted.

This also avoids the two huge problems I posted above with letting apps circumvent the current in-app payment model. By users going out to a website with their browser it's obvious that: this is outside of the normal payment stream, so caveat emptor is implicitly invoked -- and if something does go wrong, it's clearly not on Apple; and, kids can't just rack up hundreds/thousands of dollars per month directly through the device without having access to mom and dad's payment information.

 

[switch9]

What is a reason why Apple should allow third-party app store on their devices?

Apple is the one that makes the device as well as OS and ecosystem.
So they can decide how their device, OS and ecosystem should look like.
People are those who purchase Apple devices. If someone does not like the "closeness" of the system or something else they can simply avoid buying it. I am not sure why some people act like these things should be "open" by the definition.

Its not Apple to blame that people buy their devices despite their app policies or whatever. And that they form a huge market for the games like Fortnite. If you know how app store works and still buy the device then you accept companies policies. You buy the device, but also OS and App Store services among other things. This would be a problem if Apple overtook some market that used to be open and "fair" and suddenly changed the rules -- in other words if that was something that customers did not buy in the first place.

 

[jonblatho]

Short, mid, or long: there’s not a term where Apple needs Epic Games.

Yeah, tell that to young people who want to play Fortnite on their phone or tablet and pick up, say, a Galaxy device in order to continue doing so if this drags on for too long. And then, in a couple years, they buy another Galaxy device, even after Apple possibly changes its App Store policies (or has it done for them). They go on to buy Galaxy devices for their kids, who may well continue to use Galaxy devices.

Remember how in the House antitrust committee hearing Tim Cook characterized gaining/losing mobile market share as a "street fight"? This is why. Losing even one customer can have significant ripple effects, and alienating customers (especially young ones) of one of the most popular games on one's platform is an objectively terrible business move, brand equity consequences aside. Besides, according to estimates, Fortnite's entire existence doesn't even make up a majority of Epic's revenue; they can downsize pretty easily if they need to.

The iPhone, however, is consistently a majority or near-majority of Apple's revenue, by far their largest business unit, and other significant parts of their business depend on its success. A protracted developer revolt — especially if Epic can find a fellow huge player or two to join them, which I wouldn't discount — will eventually make the iPhone business struggle and damage Apple's brand, causing the vaunted "Apple ecosystem" to fall apart pretty quickly.

Epic appears to be in this for the long haul if they need to be, knowing exactly how much they make from the App Store and Google Play and the significance of those revenues to their business. All we have are estimates. If they were truly worried, though, I suspect they wouldn't have gone this far.

 

[ArPe]

With Apple Silicon Mac, that will come in due time.

It won’t. App install policies on macOS aren’t changing because the CPU is changing. Helps to have a basic look at all the security features in Sys Prefs. The only thing Apple is changing on the desktop side is tighter security against malware, ransomware and spyware, because these days that’s a life and death matter for individuals and companies.

 

[ArPe]

Sure. I wonder if they would also have to reveal that both companies (Epic Games, Spotify) have strong interests held by Tencent? Tencent owns 40% of Epic Games and nearly 10% of Spotify.

It's essentially the same thing as an aggrieved person filing a complaint, leaving the room, putting on a wig and glasses, and going back into the room to file a 'yeah, me too!' complaint.

Tencent

Is

An

Actual

Payment and gaming

Monopoly

 

[farewelwilliams]

This is the state of online game stores on PC. You have:

1. Steam
2. Epic
3. UbiPlay
4. Microsoft Store
5. xBox game pass
6. EA Origin
7. GOG
8. And probably some others I'm forgetting!

It sucked at first because we all liked having one place to play our games (Steam) but it's really not that big of a deal to load another app. There's no performance degradation if you close the 3rd party store app, and "extreme complexity?" Please. It's tapping another icon and entering your credit card—the exact same pattern as the Apple App Store.

Personally I would prefer Apple just drop their draconian measures of requiring all subscriptions go through Apple. They haven't worked for it, they're just taking advantage of the fact that there are services that require subscriptions and there is no other way to access them through an app than Apple's store. Unless you count a web browser…and Apple has been woefully behind on supporting Progressive Web App features (though they have tossed a bone here at there).

Apple is being anticompetitive, period.

1. Now do a list on the Playstation platform. Or Switch.

2.
- https://answers.ea.com/t5/Origin-Client-Web-Technical/Origin-takes-up-90-of-my-CPU/td-p/7113523
- https://community.adobe.com/t5/down...oud-high-cpu-usage-on-windows-10/td-p/8931314
- https://steamcommunity.com/discussions/forum/1/1651043320656601686/
- https://forums.ubisoft.com/showthread.php/2085191-uplay-high-cpu-usage-Forums
- https://answers.microsoft.com/en-us...high-cpu/c0c2cb8b-6868-4690-b540-177a22b2e50d

Some of these apps have background services even if you force quit the main client app (adobe especially).

Hope you selected the higher CPU tier, 16GB of RAM, and the larger battery options on your iPhone. Oh wait...

3. I have 10 credit cards. I want to choose a CC depending on the month since I get different rewards depending on what I'm spending my money on. I have to add a new CC every time. Not to mention when the CC expires or when you lose the CC, you have to type it back in. And the app would have its own UI. Want to set the default CC? Going to have to navigate to the App's preferences to figure it out. Do I dare trust how this app is saving my CC into its own database? I don't know. Now multiply these issues for EVERY. SINGLE. APP.

And that's just credit card complexity. What do you do with backups? When you backup and restore on iPhone, everything gets restored and the backups take a fraction of the size since the app binaries aren't backed up too. If you want full restoration from multiple app stores on Android, you'd have to backup the entire storage, otherwise you'll have to manually re-download the apps from various stores again.

What policies do these third party app stores have? I have an Android device, but I have absolutely no idea if I should trust apps from the Amazon app store. Do they review each app? What about F-droid? Aptoid? Do those have auto-update capabilities? Which apps did I download from which stores?

Extremely complex.

Apple's way is one store, one way to update, one background service, one set of policies, and one way to pay. Completely streamlined and very simple to understand.

4. They haven't worked for it?
- They provide fresh developer APIs and new features for developer tools and services every single year.
- They hired a team of a few hundred reviewers for $30/hr. Thousands of apps are now reviewed within 24-48 hours.
- Their data centers create optimized binaries for every single Apple device automatically. A 2GB Fortnite game could easily multiply to 30 GB of binaries replicated across 30-40 servers served to a billion devices. That's about 1TB total for a single update. Now imagine if a company updated the app every week.
- They setup data centers in China which had to go through special government regulations and somehow funneled through the great firewall (Google doesn't even exist in China, Android developers have to re-implement push notifications and submit against Baidu's rules for every single update).
- They have Apple Maps free to use by all developers (Google Maps cost up to thousands of dollars per month for high volume usage).
- They have CloudKit where developers can store up to 2 petabytes of data.
- The list goes on and on...

30% is well deserved.

 

[carrrrrlos]

Apple w/ bite and worm coming out of its head would be an epic character skin!

 

[sdz]

Mrs Margrethe Vestager,

please take over!

0,5% fee for devs at max!

 

[Unregistered 4U]

Yeah, tell that to young people who want to play Fortnite on their phone or tablet and pick up, say, a Galaxy device in order to continue doing so if this drags on for too long. And then, in a couple years, they buy another Galaxy device, even after Apple possibly changes its App Store policies (or has it done for them). They go on to buy Galaxy devices for their kids, who may well continue to use Galaxy devices.

You mean the same young people that will drop Android in a hot minute just to not have “green bubbles” when texting? They already understand having multiple devices for different activities. They’ll keep that iPhone for their social needs and buy a Samsung for gaming and that... wait, WHAT AM I SAYING? LOL They’ll buy the same PC’s everyone else buys for WAY less than any high quality iPhone.

A protracted developer revolt — especially if Epic can find a fellow huge player or two to join them, which I wouldn't discount — will eventually make the iPhone business struggle and damage Apple's brand, causing the vaunted "Apple ecosystem" to fall apart pretty quickly.

That’s a big IF. Even Spotify has said “We agree with Epic, but, umm, yeah, we’re keeping our app on the store.“ I’m trying to think of who they could even get to join them. Not any of the top Free apps currently on the store. Looking at the Top Paid Apps, nope, not any of those, either.

Epic needs Apple more than Apple needs Epic. Epic is one app among millions, Apple will survive, and Epic will publish their games on iOS devices in a way that fits Apple’s requirements.

 

[lazyrighteye]

Yeah, tell that to young people who want to play Fortnite on their phone or tablet and pick up, say, a Galaxy device in order to continue doing so if this drags on for too long. And then, in a couple years, they buy another Galaxy device, even after Apple possibly changes its App Store policies (or has it done for them). They go on to buy Galaxy devices for their kids, who may well continue to use Galaxy devices.

Remember how in the House antitrust committee hearing Tim Cook characterized gaining/losing mobile market share as a "street fight"? This is why. Losing even one customer can have significant ripple effects, and alienating customers (especially young ones) of one of the most popular games on one's platform is an objectively terrible business move, brand equity consequences aside. Besides, according to estimates, Fortnite's entire existence doesn't even make up a majority of Epic's revenue; they can downsize pretty easily if they need to.

The iPhone, however, is consistently a majority or near-majority of Apple's revenue, by far their largest business unit, and other significant parts of their business depend on its success. A protracted developer revolt — especially if Epic can find a fellow huge player or two to join them, which I wouldn't discount — will eventually make the iPhone business struggle and damage Apple's brand, causing the vaunted "Apple ecosystem" to fall apart pretty quickly.

Epic appears to be in this for the long haul if they need to be, knowing exactly how much they make from the App Store and Google Play and the significance of those revenues to their business. All we have are estimates. If they were truly worried, though, I suspect they wouldn't have gone this far.

I hear your. Just not convinced Fortnite (as popular as it is - both of my kids play it on iPad) - or any single game - is what motivates a $1000 handheld purchase. And while Epic may not need Apple, Apple does not at all need Epic.
As always, time will tell.
Cheers.

 

[Waragainstsleep]

Congratulations, you just found out what a monopoly is, very smart.

Not exactly. If you are the only seller of something, then you have a monopoly because you have no competition. There are other phones, tablets and computers. so there is no monopoly. This market belongs to Apple. They built every aspect of it and there are other markets that people are free to choose. What Epic and co are doing is complaining that they can't sell their street food at the food court in a high end, luxury, secure, air-conditioned Beverly Hills mall because they refuse to pay the rent that every other vendor is paying. 70% of a lucrative market is better than 100% of nothing.
The only thing Apple should even conceivably be pulled up on is the price match policy. That said we restrict monopolies to protect consumers and Apple is protecting them with this policy. Just so happens they are also protecting their own profits, but they invested billions into this ecosystem, why should they give it to the likes of Epic for nothing?

Spotify/Epic didn't become popular because of being on App Store. They are popular because they offer good services across different operating systems (unlike Apple). They could have distributed their apps without App Store (and made more profits) if not for Apple's restrictions. Remind me why they should be grateful to App Store?

Fortnite certainly owes a hefty chunk of its popularity to the Apple ecosystem. If you want to sell a product, you need shops or you sell it yourself direct or both. Shops take a cut of the retail price and if you sell it cheaper direct they probably won't sell it for you for long. Epic have done very well from Fortnite on iOS, this behaviour is just unbridled greed.

 

[Waragainstsleep]

No, you can use Visa. If Apple allowed an alternate method of app distribution on iOS, there would not be any merit to this law suit.

Spotify does the right thing. And apple should be forced to allow other markets on their devices, and they should have to
unlock their devices for people that would like full access. It should be done the way google is doing it, all data is cleared when you do this. And if apple does not like that, they should of course have the opportunity to not let people use the app-store after such "opening".

Apple isn't just lying to get their way when they say the app store policies and review process help keep its users secure.The Google Play Store has had numerous instances of apps containing malware and Android in general is plagued with it, not to mention the other security bugs like their face recognition being fooled by a printed photo and the recent list of 400 discovered vulnerabilities in the Snapdragon chips.
Its not just security either, its quality. Apple has carefully maintained a secure, high-quality user experience. Android is ugly, clunky and unpleasant to use in comparison.
iOS users spend more than Android users. This is another factor in the value of the market Apple has carefully created. Its also another reason they need a secure system and not a hot mess of hackwork downloaded from random Russian and Chinese servers. As if Google wasn't already using those phones to chart the humidity in your underpants.

If you don't like the cost of doing business, don't pay it and don't do business.

 

[Norman Ying]

Tencent has around 40% ownership of Epic and 9.1% on Spotify... with Tencent's $330 million investment back in 2012 Epic popular Unreal Engine move from a monthly subscription to royalties on sales in the fight to dominate the market share from Unity...

 

[creamz]

This is precisely what I will do if somehow Spotify is removed from the App Store. I've tried Apple Music and I just can't stand losing some of the features I get from Spotify.

Apple's stance is the equivalent of "we are the only ones who sell toilet paper, and you can only use an Apple Card to buy toilet paper." The apologist stance is "that's the cost of having Apple carry your toilet paper" but the only other option is to buy a bidet because there's no other way to get toilet paper.

Apologies to Android enthusiasts if they don't like bidets. I like Android!

If Spotify were to do stupid stuff and forced Apple's hand I am just gonna pull out my subs from Spotify and sub to Apple music cause there is no way I would go back to owning any music anymore. Do I care enough about Spotify and make the switch to Android? No thanks. I will keep my iPhone.

 

[sideshowuniqueuser]

If this is your way of thinking about this, you have to use Linux* if you want to be satisfied. There's no controlling every aspect of an Apple product. I see you've got the headphone jack. So do I, and I won't buy another phone that doesn't have one.

* Please nobody lecture me on GNU/Linux. I know, I don't care.

I use different platforms where appropriate, including Linux. I have considered Android instead of iPhone, and did make the jump once, but got a mid range Samsung that was a piece of cr*p and lagged to high hell, so took it back and got my current iPhone 6. TBH, I actually very rarely use headphones with my phone, mostly just with my laptop, and I've seen how well AirPods work when my friends have used them, so am now considering a 2020 iPhone SE and AirPods. I also don't use much in the way of apps, as again, I mostly use my laptop, so all the useful apps I use are free and full functioning, like say, a banking app if I need to transfer money on the move, so Apple's tax on app devs doesn't really affect me too much, but it does annoy me that they are so greedy.

 

[mrcloaked]

I can find services.

 

[Tech198]

Apple should be proud of themselves, they'll suddenly getting all this attention...

 

[cicalinarrot]

If Spotify and Epic don’t want to pay the price of admission, then they can do without the Apple app store. They won’t do that, though. They want to come to Apple’s home and demand what Apple does and doesn’t do in their own home.

Apple’s home? What do you mean? You pay something $1500 and it belongs to Apple?? Since I’m forced to use Apple’s store, what Apple is controlling is me, not Spotify, not Epic.
I don’t think they’re victims but customers and small developers surely are. Apple, like Amazon and Microsoft, is using its position to take money that is actually produced by smaller businesses. A lot of money from a lot of small businesses. Capitalism evolved, laws to control are late to the party, way too late, because big company can buy politics. It’s over, countries can just charge them some fine once in a while so the collectivity can take back 0.1% of what they’ve been stolen.

 

[Waragainstsleep]

Apple should be proud of themselves, they'll suddenly getting all this attention...

Because Apple never usually gets any attention.

Apple’s home? What do you mean? You pay something $1500 and it belongs to Apple?? Since I’m forced to use Apple’s store, what Apple is controlling is me, not Spotify, not Epic.
I don’t think they’re victims but customers and small developers surely are. Apple, like Amazon and Microsoft, is using its position to take money that is actually produced by smaller businesses. A lot of money from a lot of small businesses. Capitalism evolved, laws to control are late to the party, way too late, because big company can buy politics. It’s over, countries can just charge them some fine once in a while so the collectivity can take back 0.1% of what they’ve been stolen.

Restricting monopolies is done in the name of consumers, not large multinational companies like Epic. Apple isn't stopping anyone from publishing to the platform they built, they merely have conditions that must be met. If you don't like them or they don't gel with the product or service you wish to provide, then don't use them. Its that simple. Apple isn't doing any harm to you by "controlling" you. What they are doing is protecting you from substandard garbage that clogs up your phone or runs malware or sells your data to the highest bidder, all of which are issues on Android. If Epic has an issue, they can release their own Android phone with only Epic apps running on it if they wish. I'm sure Google would happily license Android to the and any number of companies would build or rebrand a phone for them. You don't need to spend millions on R&D. Or Marketing. Apple have though. And they didn't do it so that multibillion dollar companies like Epic could reap the benefits for free.

 

[mrcloaked]

There are bad apps.

 

[MacBH928]

I'm sure Ma Bell tried that kind of argument before the breakup in the early 1980s. "If you don't like us, then start your own phone company, run your own phone lines, sell your own phones, and convince all your friends/family to use it."

It's ridiculous that Apple only allows users to install apps via their own app store. That's the definition of a monopoly. If a developer wants any shot of being profitable, especially in the US, they have to target iOS. They can't simply not target the platform or create their own.

Actually, I am with Bell. Individuals like Buffet($80B) and Bezos ($200B) can start their own telecom, so imagine what could a group of banks and investment funds come up with. If no one is going to do it, then let Bell reap the profit of the risk they took. This is exactly what I heard an Indian billionaire did when he didn't like local telecom offerings, he started his own company -Jio- which soon massed 280M customers.

 

[playtech1]

Actually, I am with Bell. Individuals like Buffet($80B) and Bezos ($200B) can start their own telecom, so imagine what could a group of banks and investment funds come up with. If no one is going to do it, then let Bell reap the profit of the risk they took. This is exactly what I heard an Indian billionaire did when he didn't like local telecom offerings, he started his own company -Jio- which soon massed 280M customers.

The thing with telcos is that it's deeply inefficient to have multiple phone lines run to every home in the country, same as sewage and power. I don't think Apple is a Bell - there's no natural monopoly in mobile phones in quite the same way. What Apple does have is a dominant position in the marketplace, so it doesn't get quite the Ma Bell treatment by regulators, but equally can expect to have its wings clipped where it has practices that harm consumers.

Remains to be seen whether the 30% cut is such a practice, but I can see the argument. It could have some very interesting repercussions for Amazon's eBook publishing, Steam and others.

 

[2979382]

I am on Apple's side here. If I am Apple, and I build a store, build all the coding and testing tools (though the latter does come at a $99 price-tag/year) and facilitate access to all my loyal customers, yes, I will want a cut, and if the tenant (the app's owner) prefers not to honour those terms, I will revoke access. There is also another benefit with Apple-based in-app purchases: less work for developers to implement, and more secure for users which results in more customer confidence. The moment I saw the second "discounted" option on Fortnite, my first thought was, "hang on, if I use that, how secure is that transaction, where does my data go, this all seems a bit suspicious". Maybe that's just me being paranoid, but I could see other people having similar thoughts. I also think we should stop punishing (or at least be less judgemental) large companies because they're large and successful. There has to be a better way to solving this problem.

Where Apple could make an interesting move is, introducing a tier-based system, just like taxes are in most countries. New apps up to a few thousand downloads would see no cut from Apple, thus encouraging new developers and small companies and startups to publish their apps, and the more popular they get the higher Apple's cut would be, which could go as high as 40 or even 45% cut for Apple when we're talking about apps being downloaded by tens of millions and having in-app purchases that generate huge amounts of monetary transactions.

 

[AppliedMicro]

What Epic and co are doing is complaining that they can't sell their street food at the food court in a high end, luxury, secure, air-conditioned Beverly Hills mall because they refuse to pay the rent that every other vendor is paying. 70% of a lucrative market is better than 100% of nothing

The analogy isn't that far off. But the devil is in the detail.


1. There's lots, lots of places where you can sell your street food. On the other hand, there's a very limited number of societally relevant "malls", i.e. places where you can sell mobile apps: The App Store, the Play Store, maybe two or three smartphone maker stores, like the Galaxy Store. And Apple is one of the biggest ones.


2. Mobile apps play an increasing role in people's everyday lives. Public, governmental and essential services are slowly but increasingly delivered in the form of mobile apps:
- public transport information, timetables and ticket sales, demand responsive transport, ride-sharing
- mandatory contract tracing (Singapore SafeEntry)
- online banking and banking authentication apps
- student ID solutions
- messenger apps: these have become essential tools for social communication for many, especially young people

Point being: A smartphone and apps running on it are increasingly becoming an essential part of people's lives. And there's only a small number of relevant platforms in the marketplace. That's why society might want to regulate that playing field - rather than indifferently proclaiming these platform operators should do as they please. Just as government does regulate other monopolies, duopolies or markets providing essential goods and services.


3. Who says EPIC hasn't paid the rent? Or what makes you sure they haven't? I am pretty sure they (just like other, smaller developers) have paid for their Apple developer program account and access to publish their apps on the App store - the equivalent of their place in the mall.

Keeping with this analogy: Sure, there are percentage rents that make some businesses in malls pay a share of their revenues. Does that amount to the 30% that Apple is asking? Doesn't seem so. I googled it, and percentage leases are typically around 7%.