Why is Epic Games taking on Apple and Google?
Epic Games is taking on the two biggest companies in tech – Apple and Google – after both platforms removed Fortnite from the App Store and Play Store. The popular video game maker launched a legal fight and a #FreeFortnite campaign in response. But what’s behind Epic Games’ move?
There are many reasons why Epic Games are pushing back against Apple and Google, including some that may surprise you. The dispute is complex, but understanding its essential elements can help one better appreciate this major clash between two huge companies.
At its core, Epic’s battle is about money and player rights. Both sides want to maximise their profits in this rapidly growing sector and ensure their users have the best experience possible. But how do these two interests clash? In this article, we’ll examine some key factors driving this conflict between Epic Games and Apple/Google, from the economics of app stores to antitrust law to online privacy concerns. We’ll also examine how non-gaming interests such as tech giants Amazon, Facebook, and Microsoft play a role in the dispute.
Can Epic Games actually take on Apple and Google? Experts weigh in
The dispute between Epic Games, Apple and Google is long and ongoing. Epic Games has been an American video game and software development company in the gaming industry for a long time. On the other hand, Apple and Google are leading the mobile device and app market. Epic Games has accused Apple and Google for imposing unfair policies, which is why the company is challenging them in court.
To understand this dispute better, let’s briefly examine its background.
Epic Games’ Complaint
At its core, Epic Games’ complaint alleges that Apple has created a “closed and unregulated platform” that furthers its monopoly in the two related markets — the iOS app distribution market and the iOS in-app payment processing market. Epic’s lawsuit claims that Apple’s power over both markets is unchecked, allowing it to charge high commission fees, lock down competition from other app stores and download services, control prices for digital goods, and make agreements with developers that don’t benefit consumers.
Epic Games also alleges that Google’s subsidiary Android operates its closed platform for mobile apps with similar anti-competitive practices. Google is accused of maintaining a stranglehold on delivery of apps on Android devices by controlling Android’s official app marketplace, blocking alternative app stores via a “hidden system setting” known as SafetyNet, and overcharging developers who choose to use third-party app stores instead.
Epic Games asserts that these arrangements harm consumers and developers alike by thwarting innovation, raising consumer prices through artificially inflated transaction fees, and preventing competition from other payment providers. In addition, epic contends this conduct amounts to an illegal monopolisation of each respective market violating applicable antitrust laws.
Apple and Google’s Response
Apple and Google responded to Epic Game’s claims about their app store fees. Apple said in a blog post that the App Store is the best way for developers to get their apps safely and securely to customers worldwide, and that their fees and guidelines ensure a consistent experience for all. They also argued that developers can reach a wide range of customers through their platforms and only pay a commission when users make an in-app purchase.
Google similarly defended its policies, saying that Android gives users choice and “sends developers more than four times as much traffic as any other platform”. In addition, it said its app store policies provide entrepreneurs great opportunity and fair, simple, transparent rules. It also pointed out that Android phones outnumber iPhones worldwide.
Experts Weigh In
With the legal battle between Epic Games and Apple/Google in full swing, it’s become significantly more important to question what is at stake. As the tech giants duke it out in court, experts are weighing in on if Epic Games has a chance.
This section will discuss what experts have to say on the issue.
From a legal perspective, Epic Games is challenging the 30% fees that Apple and Google charge for hosting their app on the App Store and Play Store, respectively. These costs are widely seen as excessive and anti-competitive across multiple industries. Although many app developers have received financial incentives to offset this fee, some have argued that the high costs can still impose an unfair burden on their businesses.
Epic Games’ lawsuit essentially argues that these two tech giants are abusing their market power by utilising these fees to dominate the mobile gaming markets worldwide. If proven in court, Apple and Google’s market position could be significantly weakened, likely leading to a more competitive environment for app developers everywhere.
Furthermore, Epic Games has brought attention to various policies regarding customer data privacy which Apple and Google appear to violate with impunity. Therefore, if a judge rules in favour of Epic Games, it could not only mean reduced fees for app developers on App Store and Play Store platforms but also increase privacy protections for customers worldwide who use both platforms.
It remains unclear whether Epic Game’s lawsuits will be successful; however they will certainly have major implications if they are determined in favour of Epic Games’ lawsuit.
The clash between Epic Games and Apple has been making headlines of late, with questions around why the video game developer and publisher is taking on these two tech giants. From a business perspective, the move makes sense for Epic – as Tim Sweeney, co-founder and chief executive of the company states “We aim to bring a more competitive environment to the App Store so consumers may have access to better products at lower costs.”
At stake is Epic’s ability to develop and grow its Fortnite game on platforms owned by Apple, who has aggressively pushed developers into its app store as a marketplace for their apps: taking 30% of any revenue generated through that store in exchange for hosting it. This means that if someone plays Fortnite using an Apple device – say an iPhone or iPad – Epic Games needs to pay Apple 30% of those proceeds to maintain its presence there. This issue is compounded since Epic’s games are also heavily reliant on micro-transactions within games which cost players real-world money; thereby amplifying the level of revenue at stake for both companies significantly.
Epic Games’ lawsuit against both Apple and Google goes back to 2018 when it first took on the iOS App Store’s strict payment policies which dictate that all digital transactions must be done via the App Store itself. By effectively lobbing a grenade at these tech giants, they bring increased external scrutiny over their practices while promoting competition in an increasingly consolidated market.
From a technology perspective, Epic Games’ dispute with Apple and Google revolves around the app store model they use to monetize their respective mobile gaming platforms. Apple and Google require developers to use their app stores and payment systems, which charge up to 30% commissions on all in-app purchases.
In addition, Epic also argues that these large companies are using their market power to stifle competition by preventing developers from using alternative stores or payment systems on their devices.
Epic Games argues that these practices are anti-competitive, limiting consumer choice, reducing innovation and increasing consumer prices. Further, they maintain that these practices harm small businesses that rely on the App Stores to launch their products and big developers like Epic who have juggernaut franchises such as Fortnite.
In addition, Epic Games is arguing that the lack of competition between Apple’s iOS and Android has led to locked-in customers where consumers are forced into a platform by device choice rather than competitive features or fair pricing models. If a monopoly ruling is taken up against either Apple or Google, it could lead to more competitive pricing models for gamers on mobile devices, which would benefit customers in the end.
Epic Games has taken action against Apple and Google, filing a lawsuit that could affect the entire tech industry. Their argument centres around the idea that Apple and Google have created an unfair monopoly by limiting app developers’ access to the App Store and Play Store.
As people weigh the potential outcomes of Epic Games’ lawsuit, some experts are speaking up to offer insight into what this could mean for the industry.
Apple and Google’s Perspective
Apple and Google have long followed their decision to enforce the App Store policies, which require developers to use the stores’ in-app purchasing systems and pay a 30% fee on all sales. As a result, Apple’s App Store adds significant costs to Epic Games’ revenue. In addition, Apple and Google both stand by their decision to keep Fortnite off their platforms because it bypasses the policies.
From Apple and Google’s perspective, upholding the App Store policies is essential for operating an effective app marketplace. Having these rules in place allows them to vet developers more thoroughly and offer more protection against malicious programs or unethical behaviours within their stores. Additionally, requiring developers to adhere to the policy helps protect consumers from accidentally purchasing something they cannot use or refunds they may struggle to obtain while allowing Apple and Google to collect revenue from sales within their online marketplaces.
Epic Games’ Perspective
Epic Games’ primary dissatisfaction is with Apple and Google’s practice of taking a 30% revenue share from apps downloaded from their stores. It is estimated that this policy has cost the company $600 million in 2020 alone, and Epic seeks a more equitable payment structure for developers. The litigation could have far-reaching implications not just for Epic, but for app developers in general.
The outcome of Epic’s suit against Apple may depend on whether the court views the Cupertino-based tech giant as a legitimate monopoly. If so, strong antitrust laws will apply, and Epic may succeed in forcing Apple to remunerate its app developers more fairly. But if Apple manages to defend itself against such allegations, then it will be able to retain its stringent fee structure. In that event, many other companies may be dissuaded from taking legal action against Silicon Valley giants due to the cost and risk involved.
In the case of its suit against Google however, Epic faces an uphill struggle as Android mobile devices are open platforms and accessible to third party stores such as Amazon or Samsung without competition from Google Play Store (which does not operate on iOS). This freedom puts any potential antitrust claims by Epic in jeopardy since Android users have a choice between using third party stores or sideloading apps without ever having to utilise Google Play services thus nullifying any claims of exclusive access through a monopoly.
Despite facing potentially unfavourable outcomes in both suits, Epic is adamant that it must pursue them to protect the rights of game developers everywhere and help level the playing field between software engineers and corporate giants like Apple and Google who are leveraging their positions of power to pad their bottom lines at everyone else’s expense.