Fortnite, the popular online game has been banned from the app stores of both Apple and Google after its maker, Epic Games, violated their policies. Epic Games has reacted by releasing a social media campaign and suing both tech companies.
Google’s and Apple’s quarrel with the game developers over their percentage cut of revenues blew up into a high stakes clash on Thursday when both tech companies removed the popular online game Fortnite from their app stores and the game’s maker hit back with a lawsuit.
The Gloves Come Off
These series of events began on Thursday morning with a clear provocation from the game’s maker. Epic Games began encouraging all mobile-app users to make their in-app purchases by paying it directly, instead of through Apple or Google.
Both tech companies require that they handle all such payments, so as to collect a 30 percent commission. This policy has made them be at the center of a lot of antitrust complaints in the last few years.
Hours after Epic Games’ new in-app purchase feature, Apple responded by removing the Fortnite app from its stores.
Apple also released a statement saying, “Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines. We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store’.
Inside of an hour of this release, Epic Games opened a war on all fronts against the tech giant that appeared months in the making. First, it filed a lawsuit against Apple in federal court, accusing the tech company of violating antitrust laws by compelling developers to use its system of payment.
In the 62-page lawsuit, Epic Games stated, “Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its monopoly over the market for in-app payments on iPhones”.
Epic Games did not stop at the lawsuit, they later rolled out a sophisticated public relations campaign that depicted Apple, one of the most image-conscious companies in the industry, as a stodgy old guard that tries to stifle the upstart.
The Battle Intensifies
In order to do this, Epic Games used Apple’s own imagery against it, mirroring Apple’s iconic “1984” ad from 36 years ago, which it used in its own fight against IBM back then. This time, in the ad Fortnite characters, are seen defying Apple’s totalitarian regime.
Sometime later on Thursday, Google also kicked the Fortnite app out of its official Android app store, The Google Play Store, also saying that the app violated its policies. Within hours, Epic replied by filing a similar lawsuit against the tech company.
This confrontation with Epic Games has much higher stakes for Apple than it does for Google. This is because Fortnite remains available for download on the internet for Android devices. This is because the Android software by Google allows anyone to download apps outside the Google app store, which is unlike Apple’s approach with its iPhones.
It also does not impact revenue on the Android side because Epic Games had only added the game to the Play Store in April and Android users of the game had been getting the game and its updates from the Epic websites.
The game is also still available on the Samsung Galaxy stores.
Apple has arguably met its toughest adversary in recent times. Epic Games has calculated exactly where to hit Apple to do the most damage; by causing its iPhones to look less attractive and Apple’s image.
This fight which sees Epic poised to sacrifice millions of dollars in a bid to keep Fortnite off iPhones will make the Apple flagship device less attractive to millions of people around the globe. And all this just ahead of the most prominent iPhone introduction by Apple in years.
The move to ban Fortnite will invariably push some users towards online gaming alternatives and other gaming apps (and Apple has, predictably, started pushing visitors to the Store app towards other featured games), but given Fortnite‘s popularity that’s not going to be enough.
Reaction Across The Internet
Epic Games has been applauded for this bold move. It has also found support from its hosts of gamers, Tinder-owner Match Group, and also Spotify. Gamers with hundreds of thousands of YouTube followers took to the platform and other social platforms to share their opinions and show support.
A YouTuber with the handle “thatdenverguy”, who has more than a million subscribers, said, “This is insane, we are watching actual history take place because we just don’t see this anymore, Tim Sweeney and everybody at Epic, we stand with you and thank you for standing up for something bigger than Fortnite here that helps us out”.
Antitrust regulators have been investigating Apple over the past year as its policies have on the App Store have drawn intense examination. App developers have complained that Apple takes an unfair cut out of their revenue while, in a lot of cases, also offering competing products to the public.
House lawmakers in a hearing interrogated the company’s chief executive, Tim Cook, on the issue just last month and other antitrust watchdogs like the Justice Department, state attorney generals, and European regulators have been investigating the company for a while now.
Apple’s second-largest source of revenue, just after the sale of iPhones, is its service business. And this revenue stream is mostly built on the percentage it takes on other apps’ sales. This also means that enforcing its commission of 30 percent is crucial for its business operations.
For Apple, prolonging this fight might shrink its iPhone sales because new users will not be able to download the app. While old users who have the app installed might still enjoy it for a while, but due to Epic being unable to update the iOS versions will lead to them becoming outdated.
With the game having over 350 million registered players, this could also cause a large shift to Android devices as the app and future updates will be available via the Epic website.
Fortnite has become a large enterprise that has brought in revenue of roughly $1.2 billion and Apple has taken for its commission $360 million.
This commission has been the reason for a few quarrels with other app makers, chief among them being Spotify. An email app developer, Blix, who’s app competes with Apple’s service sued the company last year.
Facebook, who has also been at odds with Apple over privacy issues, on Friday seized on the backlash Apple has been getting to take a swing at the commissions too. It reported that Apple had declined its request to put aside the fees for its new online events product, putting Apple’s decision as a refusal to assist small businesses.
Companies like Spotify and the owner of Hinge and other dating apps, Match Group Inc, have all issued statements supporting Epic. In its statement, Match Group Inc, accused Apple of using its “unfair policies to hurt consumers, app developers, and entrepreneurs”.
What Happens Next?
It is not all grim news for Apple as they also found some support in Gene Muster, a managing partner at Loup Ventures, who said that the developer benefits have aided the App Store to be a trusted source of content and software for nearly 1.4 billion active Apple devices.
He also added, “Lowering or eliminating the fee would jeopardize the integrity of the App Store”.
Apple has replied to all these by saying that the commission being fair has been applied to all app developers. Apple also argues that it spends a huge chunk of the commission on the App Store and iPhone technology, thereby creating business opportunities.
Although Apple in past quarrels tweaked the rules for the app developers, Epic’s quarrel appears to be more than just about getting its app back into the App Store. CEO and founder of Epic, Tim Sweeney, has said that he feels obligated to “make this industry a better and fairer place”.
Back in 2018, Epic also released its own app store which charges developers only 12 percent in commission. While last month the company said it has processed more than a billion dollars in transactions, it makes a profit of 5 to 7 percent with the lower fee.
“It is critical to the future of humanity. Otherwise, you have these corporations who control all commerce and all speech”, Mr. Sweeney said in an interview.
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Last Updated on February 3, 2021.