Epic Sues After Apple Removes Fortnite from App Store

Posted on August 13, 2020 by Paul Thurrott in Apple, Games, iOS, iPadOS, Mobile, Mobile gaming with 120 Comments

UPDATE: Google also later removed Fortnite from its Google Play Store so Epic launched a similar lawsuit against the search giant as well. –Paul

Apple removed Fortnite from its app store after Epic implemented its own in-app payment system, bypassing Apple’s unfair 30 percent vig. Clearly prepared for this eventuality, Epic quickly sued Apple for abusing its monopoly power.

“Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users,” an Apple statement reads. “As a result[,] their Fortnite app has been removed from the store. 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 regarding in-app payments that apply to every developer who sells digital goods or services.”

Epic’s response is, well, epic.

“This case concerns Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets for the distribution of software applications (‘apps’) to users of mobile computing devices like smartphones and tablets, and the processing of consumers’ payments for digital content used within iOS mobile apps (‘in-app content’),” the Epic lawsuit explains. “Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30 percent tax on the sale of every app. Apple also requires software developers who wish to sell digital in-app content to those consumers to use a single payment processing option offered by Apple, In-App Purchase, which likewise carries a 30 percent tax.”

Epic compares the situation on iOS to that on the Mac, where users are free to download apps from any source and, at most, incur a 3 percent charge for credit card processing fees. “[That’s] a full ten times lower than the exorbitant 30 percent fees Apple applies to its mobile device in-app purchases,” Epic adds.

Epic says it brought the suit to end Apple’s “unfair and anti-competitive” business practices, which Apple uses to “unlawfully maintain its monopoly in two distinct, multibillion-dollar markets: The iOS App Distribution Market, and the iOS In-App Payment Processing Market.”

Epic is not seeking any monetary compensation for the injuries it says it has suffered, nor is it seeking favorable treatment, as Apple gives certain large companies like Amazon that complained about its practices in the past. It simply wants fair competition in “two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.”

Bravo, Epic. Bravo.

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Comments (129)

129 responses to “Epic Sues After Apple Removes Fortnite from App Store”

  1. ronh

    "Bravo, Epic. Bravo."

  2. Truffles

    Waiting for Epic's Playstation and XBox court cases regarding not allowing 3rd party payment processors...

    • wright_is

      In reply to Truffles:

      Epic explicitly states that they don't find this so egregious, because the consoles are sold below cost and the money recouped partly on the game sales. Maybe if Apple started selling the iPhones at cost, Epic would move on?

      • BrianEricFord

        In reply to wright_is:


        epic has made over a billion dollars on iOS alone, selling items through a single game in just over two years. At some point, we should probably stop letting them pretend to be the little guy.

        • Paul Thurrott

          Microsoft's not a little guy and Apple's policies are unfair to them too. Kudos to Epic for doing the right thing, even though it will cost them. Microsoft should have this level of respect for doing the right thing.
    • dftf

      In reply to Truffles:

      Apple's lawyers would bring-up such comparisons in court and ask for them to be considered, so changes may occur far-wider.


      Apple is simply the target here as it is the largest app marketplace and the most-profitable, similar to now Microsoft had antitrust investigations in the 90s and 2000s as it was the biggest OS, browser and office-suite by use.

  3. redstar92

    Hate Epic but installing epic game store on my pc after this :) Sweeney FTW :)

  4. curtisspendlove

    In reply to Hawaiianteg:

    Google made no deal with Epic. What did happen is Epic realized even though they could bypass the store they publicly stated that google disadvantages any app not in the App Store so Epic caved and went to the play store.


    And, let’s not forget that little security snafu with Epic’s original Fortnite installer:


    9to5google.com/2018/08/24/google-found-security-flaw-fortnite-play-store/amp/


    To be fair, I think 30% is probably a bit too high. But to call it draconian and demonize Apple or Google and ask for the government to set these prices is unlikely to be beneficial in the long-term.


    There are clear benefits for having the platform vendors handle this sort of security. Their reputation is on the line, after all.

    • dftf

      In reply to curtisspendlove:

      30% is only in the first year, then it drops to 15%. An easy move would be to simply make it 15% in the first year also. They could implement that immediately.


      But there is still the issue of the inconsistency on which apps they apply fees to. Spotify they do take a 15% cut, but Netflix and Amazon Prime, no. I'm surprised they don't just enforce 15% on everything

  5. jwpear

    What's the solution to this? Is the end goal to simply allow side-loading of apps or alternate app stores? Or is it to get Apple to lower their cut?


    As a user, I have no desire to side load apps on my phone. It's too important and I don't trust them. I envision the wild west mess that is Windows. That may be overblown, but it's my perception. I guess that's why I'm an iPhone user rather than Android.


    Putting aside the hardware, how does Apple make money to support iOS development? How do they support their store, if they were to continue to provide their own app store?


    Do they charge more for hardware? Feels like we're already at extreme prices unless we truly reach the utopia of a single device that can be used for both mobile and desktop activities. I have the sense Apple may very well be able to pull this off; whereas, Microsoft failed. This is also bound to make dev support more costly as it means more devices and features to support.


    Do they start charging for iOS versions? I doubt many people will be willing to pay to upgrade their OS on a device that they're keeping maybe 3-4 years. As a dev, now I will need to target more versions for longer periods of time. That's not free.


    Do they take a larger percentage of the initial app sales? App prices go up or devs take less on the initial purchase. I suspect most would simply make their app free and then charge for features to work around this.


    Do they raise the price of the developer program? As a dev, I've never been found of this method of monetizing on any platform.


    Do they add advertising to iOS or within apps? Please no. I'd rather pay more for the device, OS, or app than see that.


    Not trying to defend Apple's current practices. I do agree they need to be changed. I'm just wondering out loud how this is resolved without some reasonable method to offset cost of the OS development.

    • retcable

      In reply to jwpear:

      The solution the pundits want is to let people install anything they want onto their phones, any time/anywhere, from any source, reputable and curated or not, preferably not, and Apple & Google having no say in the matter at all. NO say as to the safety or security of their customers or their data, the wild west if you will, just like it has always been in the Windows world. All those asking for this never seem to mention the resulting situation we have endured for ages with malware, adware, viruses, worms, identity theft, personal data and info harvesting, etc etc etc are all a result of this wide-open free for all. I am perfectly happy with both Google and Apple doing what they can to help keep their customers' data safe from harm, I do not think that is a bad thing at all.

      • Paul Thurrott

        The dictators thank you for your blindly trusting support.
      • red.radar

        In reply to retcable:

        It’s not like malware doesn’t exist in the App Stores ... so I am not certain the problem statement changes by allowing side loading. You can still prevent malware through user education. It’s not like the Windows situation is that bad . I don’t run aftermarket antivirus software and I haven’t been victim to a virus or malware in 15 years

    • Paul Thurrott

      Here's the reasonable outcome, since side-loading isn't happening. Lower Apple fees, with no fees on subscriptions, for those that wish to use Apple billing. No more preventing app developers from communicating with their own customers. No more blocking of third party payment methods. Even writing that seems ridiculous since it's all so obvious.
    • madthinus

      In reply to jwpear:

      The goal is two fold. Allow App developers to process their own payments, and secondly, to lower the processing fee to align the percentage to that of all goods and services for comparable services.

    • wright_is

      In reply to jwpear:

      If you already have your own payment system that takes 2-3%, why would you agree to pay Apple 30%? This about the freedom to choose. Either Apple and Google should bring their rates down to an acceptable level or they should allow alternative payment methods.

      For the initial sale, fine. For in-app purchases, which don't even touch Apple's servers? (apart from the payment, obviously)

  6. tallguyse

    And Epic sues Google too!


    I‘m going to set up a table in my local Best Buy and sell games I bought off eBay. If they try to kick me out, I’ll sue!

  7. jgraebner

    In reply to Hawaiianteg:

    You are correct and I did misremember the circumstances by which they brought the game to the Play Store. In fact, Google did pull the app today for the same reason Apple did and Epic has sued them as well.


    I stand corrected.

  8. jedwards87

    I guess Google just fell for it too right Paul ? Oh, and Google is being sued too.

    • Paul Thurrott

      Guys. I can't control the passage of time. I wrote this article hours before the Google thing happened. So I've updated this and written more. Yes, Google fell for it too. That happened later.
  9. red.radar

    The subtle nuance that makes this interesting is that IOS customers cannot be served by any other platform but the App Store. Their devices can only run applications that are delivered from the App store. So it makes the customer Captive. The comparisons to general retail are not valid because Walmart doesn't capture a customer and prevent them from shopping at other stores.


    When mobile devices were a luxury non necessary good this was ok. However, now that mobile devices are commoditized and somewhat necessary in this modern era, Apple is going to be subjected to some common sense fair market regulations. And its because the digital platform causes a capturing effect that opens things up for abuse.


    Sure... you can say the consumer can go to android. But that means the developer has to give access to an android device at a cost. The customer is still captive. Not to mention the Sunk Costs an iOS user may have. Platform switching because of already purchased Apps, Content and Accessories that do not work on any other device make it very cost prohibitive to leave.


    The change is simple. Apple can create a paradigm to allow sideloading harmonizing iOS to function like a Mac. Then Apple doesn't have to change a thing about its store. Furthermore this means these developers can carry the distribution and marketing costs themselves to reach iOS customers...which is what that 30% supposedly gets you....supposedly.

  10. sandy

    Some of the comments here saying Company XYZ does similar things are assuming that it's legal in those other cases; maybe it isn't either (I'm not a lawyer, but the abuses large retailers have inflicted on smaller suppliers shouldn't be legal).


    Abusing dominance in a market has got many companies in trouble with competition regulators, Microsoft in the '90s, and hopefully Apple now.


    Like other previously struggling companies who are now huge, Apple has failed to relax their restrictions and if they don't do so now, they'll be forced to.

  11. prifici

    I'm not a huge fan of Epic but, well played. This was definitely executed to draw attention and there's nothing groups like the EU like more than punishing US companies.

    • wright_is

      In reply to prifici:

      I agree with the first part of your statement, but the EU doesn't like punishing US companies, in particular, they enjoying punishing companies that restrict customer choice or disadvantage customers, regardless of where they come from. Just look at Philips (a Dutch company) that got slapped with large fines for a CRT cartel a couple of years back.

  12. BrianEricFord

    I have a serious question: Epic claims that — but for Apple and Google’s 30% fee for all transactions on their respective stores — they would pass on a 30% savings to their customers.


    In other words, if there were no fee on a $10 purchase, Epic would sell that $10 item for $7 rather than keeping the price at $10 and pocketing the $3.


    If that’s true, on all of the platforms where they are able to distribute Fortnite unhindered by fees, have they historically sold items for 30% cheaper? If not, why not?


    I suspect claims of altruism are likely made because they sound good, rather than because they’re true.


    Also, both Apple and Google should ban apps from selling in-game currency for real-world money. It’s scammy as hell.

    • wright_is

      In reply to BrianEricFord:

      I believe that Apple's rules also state they can't charge less outside the App Store for an item. So either the companies are taking a 30% bath on every App Store transaction or those buying outside the store are forced to pay 30% more than they should for the item.

      The interesting thing will be to see what happens to transaction prices, if Apple are brought to task.

  13. JH_Radio

    Hey Paul, a typo...Apple removed Fortnite form... You meant from I'm sure.  

  14. wright_is

    In reply to lvthunder:

    No, no one is talking about the Apple App Store (and Google's) should be a charity, but on the other hand 30% for doing "nothing" (i.e. in-app purchases and subscriptions) is excessive.

    An in-app purchase is creating something on the device using code that is already there. It doesn't cost Apple anything to transfer the in-app purchase from their servers to the device, it is simply a transaction token.

  15. bkkcanuck

    What I cannot get past is that in the beginning the iPhone came out and it did not have any facility for third party development - and they could have kept it that way and that would not have been violating the law. Many companies make things that are closed environments (a long history). Then they allowed 3rd party developers to make apps and sell them on the app store with a 70%/30% split and that somehow violates the law according to Epic. Apple is in no way a monopoly by the definitions of current US law so I think this suit will have any chance in the courts. I suspect though that Epic already knows that they are playing to a different audience, hoping to have things forced to change for them.

  16. dftf

    In reply to pecosbob04:

    According to the Wikipedia article titled "List of wealthiest organizations", Saudi Aramco has a market-cap of $2.1 trillion, then Microsoft at $1.47 trillion, then Apple at $1.44 trillion

  17. wright_is

    In reply to lvthunder:

    Who is taking about making it a charity?

    People just want a fair deal and 30% is by no stretch of the imagination fair.

  18. dftf

    Okay, so reading the comments on here some thoughts:


    APPLE ISN'T THE UNDERDOG NOW: many people seem to react passionately to criticism of Apple like we're still in the 90s where they were doing badly. Perspective: Apple currently has the third-largest market-cap (behind only an oil-giant and Microsoft) and is the 11th biggest company by-revenue (or 3rd, counting only US-owned companies, behind Walmart and ExxonMobil); the iPod was the biggest-seller in that product-category (didn't see many with a Creative Zen or Sony Walkman; Microsoft Zune was DOA); they make more-profit on their iPhones that most-other phone makers on their models (i.e. Apple have a larger-margin); the App Store makes more-money than any rival (Google Play or a games-console store; as-in compared, not combined) and its online-services continue to grow.


    APPLE IS THE "FALL-GUY" HERE, BUT THAT'S THE WAY IT GOES: sure, Google Play, and the stores on the Xbox, PlayStation and Nintendo consoles, all also charge a 30% cut, but Apple will be the focus as it's the most-profitable, so that's always where the focus goes. In the 90s and 2000s, anti-trusts looked at how Microsoft unfairly-bundled Windows on PCs, and how Windows came with preinstalled apps like Outlook Express, Internet Explorer, Windows Media Player and Microsoft Works. You didn't hear similar-complaints of how mac computers only came with macOS, or how macOS came bundled with Mail.app, Safari, QuickTime or Apple Works (later iWork) respectively. Same thing now.


    BYPASSABILITY: the only way to bypass the Apple App Store is to be an enterprise customer and enrol iPhones or iPads into a MDM solution, such as VMWare Airwatch or Microsoft InTune, then you can self-sign apps and do sideloading. For everyday users, there is no option, other than to use a "web-app" version, which often offer a poorer-experience, or can't run offline. Android allows manual-download and install of .APK files, and video-game consoles (at-least currently) let users buy optical-disc versions from a variety of stores, or second-hand. Windows, macOS and Linux all allow manual installs of apps, or even "portable versions" which need no install. So again, more-focus will be on Apple as its clearly the most-restrictive. (The only thing I can think of that would be as-restrictive as Apple would be apps you can download onto Smart TVs, where again there is one store).


    CHANGES APPLE COULD EASILY MAKE: stop asking for 30% in the first year, and just charge 15%. Makes no-sense to me why it needs to be 30% in year one, if it is then 15% every year after that. Also, fix some of the inconsistencies: I can't see why for apps like Spotify they take a 30%/15% cut, when similar streaming-apps, like Netflix, they don't. Or if you buy a personal Office365 subscription via the App Store, Apple take the 30%/15% cut, yet enterprise customers never pay a cut. If they charged the same-cut for every purchase or subscription, at-least this would reduce grounds for arguments.

  19. dftf

    To answer the often-cited claim: "Apple was the first App Store"


    "Handango" launched in 2003 for Symbian, 2004 for Pocket PC and Palm OS, 2005 for BlackBerry and 2006 for S60. "Nokia Download!", launched in 2006, was an app store for S40 and S60 devices (later rebranded "Ovi Store" then later "Nokia Store"). Many Linux distros also had an "app store" since the 90s or 2000s. The Apple App Store launched July 2008, so all these examples predate it. (Didn't the original Sony PSP, released in 2005, also have a built-in store?)


    Apple may have popularised the idea, or were the first to "do it right", but that's not the same as being the literal first.

  20. wright_is

    Epic's 1984-esque video parodying the original Apple 1984 advert is very well done and absolute genius. Regardless of which side you fall in this argument, it is a brilliant piece of work.

    https://twitter.com/FNBR_DE/status/1294154395077287936

  21. avidfan451

    Thoughts now that Google also removed Fortnite from the Play Store, and Epic has filed suit against them, as well? Starting to look like this isn’t just about Apple...

  22. Calibr21

    Good to see all that Fortnite money being put to good use.

  23. irfaanwahid

    I don't understand something here.. Epic and others are complaining how Apple is unfair and charging 30% Apple tax for distribution. What do they expect, so Apple built this giant platform, through its smart marketing and great platform gained 1+ billion userbase, were first in mobile space to to create an App Store back then which most dev today leverage and make money, all that hard work and ecosystem they built over a decade should now be given to developers for free?


    Everything Apple does has premium element to it, whether good or bad is subjective, but their devices are all considered premium hence even for App Store 30% is a premium.


    Apple is now in a position that it has built over several years where Dev wants them more than ever.


    I am not an Apple fanboy but Apple is a business, I believe they are allowed to make money just like anyone. Every other big/small dev company is allowed to go out there and create an ecosystem as Apple/Google has done, they stop none.

    • wright_is

      In reply to irfaanwahid:

      Apple was the power behind Handigo, the Nokia Store and other platforms in the late 90s and early 2000s? I never knew that.

      What exactly is the 30% transaction cost to Apple for an app turning on access to additional in-game currency? The currency is stored on Apple's servers and transferred down the pipe to the user. They receive a transaction token to say the transaction was successful and the item/currency/whatever is created in the app locally. Yes, those tokens are so big and heavy, I'm sure it costs Apple $30 to download a transaction token for a $99 box of money in a game from their servers to the user. I bet they employ real wheelbarrows, gold plated mind, to carry the virtual currency from their virtual safe to the server and it is transferred with a Securicor armed escort... Oh, wait.

    • codymesh

      In reply to irfaanwahid:

      why should Apple get 30% of a purchase inside of someone else's service?

      • irfaanwahid

        In reply to codymesh:

        Put simply, it's their business, that's how they want to make money. They built it over the years. It's not even about right wrong, they maybe wrong.. my point is, they are a company and want to make money from all ends.

        • jim_vernon

          In reply to irfaanwahid:

          "That's how they want to make money" is not a particularly convincing argument to excuse bad behavior.

          • Greg Green

            In reply to Jim_Vernon:

            If a restaurant wants to charge $30 for a small salad and won’t let you bring in a sack lunch to eat, will you sue them for ‘bad’ behavior?

            • Paul Thurrott

              Guys. No. We collectively need to get past this complete lack of understand of the situation. Apple is a dominant tech giant that is behaving anti-competitively to give its own products and services an unfair advantage in an ecosystem of 1 billion people that it controls. It's not like "a restaurant" in any way... and that I have to even mention that is, I mean, duh. The rules are different for Apple and for any other company that controls a market that large.
    • Calibr21

      In reply to irfaanwahid:


      Apple and Google should allow users to install Apps outside of the store and not disadvantage them in anyway beyond an initial warning popup.


      Apple should also not charge 30% for App store purchases if they have a competing service. So Spotify / Netflix should not get charged 30 or even 15%.

  24. shmuelie

    The fact that Epic isn't suing Google who also removed them from the store says a lot. Honestly, Epic has always hated app stores that aren't theirs (see there hate of the Microsoft/Windows App store when it was NEVER a threat to their profits). They saw a good PR move and took it. If Epic actually cared about this there are more ways they could hurt Apple without needing to go to court (stop supporting Unreal on iOS for example).

    • retcable

      In reply to Shmuelie:

      Ah, but Epic has now filed suit against Google as well. This is not just all about Apple any more. Epic pulled the exact same stunt on Google that they did on Apple, was banned from the Play Store and Epic has now filed suit against Google.

  25. lvthunder

    The iOS App Distribution Market and iOS In-App Payment Processing Market aren't legally definable markets. They are going to be really pissed when they lose this case. This is like saying you have to go through WalMart to get access to WalMart's customers.

    • Paul Thurrott

      In reply to lvthunder:

      No it isn't.


      Walmart doesn't charge an additional 27 percent on credit card purchases at its stores.

      • lvthunder

        In reply to paul-thurrott:

        No they just charge 50% to carry your product in the store.

      • skolvikings

        In reply to paul-thurrott:

        But Walmart has a profit markup. In fact, I suspect it’s much higher than 30% in some product categories.


        A manufacturer can’t sell their products in Walmart or Target or any other store and expect to get the full price paid by the customer. That’s absurd.

        • jgraebner

          In reply to Skolvikings:

          That's true, but the key difference is that the manufacturer can choose to reject those terms and instead sell their products through other retailers or even direct-to-consumer. The App Store is the only way to reach iOS users, which gives Apple an unreasonable amount of control over the way that other companies, some of whom are directly competing with Apple, are able to run their businesses.


          If iOS had a much smaller market share, this situation might be fine. The problem is that it is essentially impossible for most software or service companies to survive in the mobile marketplace without supporting iOS. Walmart actually does come close to having the same market power and their business practices have been pretty closely scrutinized as well.


      • david_romero_hernand

        In reply to paul-thurrott: Hi Paul. I am not sure how Walmart works in USA, but in Mexico it is not just the 3% of purchases by plastic. You need to pay based in the place in the store. You need to price the product like Walmart says, you can not choose how much your product cost. To mention some rules. A question, if you invest money to make a platform, how much control do you deserve of that platform?


      • anoldamigauser

        In reply to paul-thurrott:

        No, Walmart squeezes manufacturers on the wholesale price they will pay to place the item in their stores. Which is also a crappy business model which benefits one side over the other.

  26. jedwards87

    Google has the same unfair 30% and Epic will be battling them too as they added the same means to get around using Google Pay unless Google decides to fold. But of course you make this about Apple only. I am not surprised. Oh and it wasn't a trap that Apple fell for...lol. Apple had to choice but to remove the app.

    • dftf

      In reply to jedwards87:

      I imagine that every store does the same 30%: Google Play, Nintendo, Xbox, Sony. Apple is by-far though the most-profitable of them all, hence why it is the subject of the current focus, exactly the same as how people would focus on Microsoft for bundling Internet Explorer, Works (or a trial version of Microsoft Office) on Windows, but the same-focus never applied to Apple with either Safari or Apple Works (later iWork) preinstalled.


      You go-after the biggest target.

    • jgraebner

      In reply to jedwards87:

      Android also allows installation of applications from sources other than the Play Store. For a long time, the most prominent app that bypassed the Play Store was, in fact, Fortnite. Google did make a deal with them a while back to finally bring it to their store.


      I would imagine that Epic wouldn't be fighting Apple on this at all if it were possible for them to just distribute the game on iOS themselves.

      • curtisspendlove

        In reply to jgraebner:

        I would imagine that Epic wouldn't be fighting Apple on this at all if it were possible for them to just distribute the game on iOS themselves.


        Correct me if I’m wrong, but I’m reasonably confident that Epic have their own game store available on Android. Or maybe they are still working on it. I can’t remember the details behind their side-load fiasco.


        I wonder how many people use it though. I actively tell anyone I know who uses Android not to use 3rd party app stores without telling me because the security risk is too high.


        I still feel like this is phase one of a multi-phase initiative to launch their own app stores on more platforms.


        After all...they have a bunch of exclusive deals with game developers to be the only store offering their games for various timeframes.


        Seems...a bit...ironic. No?

    • navarac

      In reply to jedwards87:

      It is only about Apple. Android allows developers to point users to other payment options.

  27. wdc2

    In replay to

    Paul:

    "No it isn't.

    Walmart doesn't charge an additional 27 percent on credit card purchases at its stores."

    Walmart as any other store does charge for the stuff you bought, on top of their base price for which they've bought it from the supplier.

    They can charge 3% or 30% because it's their store, they've built it, don't like it go shop somewhere else, don't tell us in our house that we cannot charge 30%

    • bart

      In reply to wdc2:

      "...go shop somewhere else..." You hit the nail on the head. You can't get iOS apps anywhere else, but in the App Store. Walmart products are also available in other supermarkets.

      • lbj

        In reply to Bart:

        But you can get Fortnite on everything from Nintendo Switch to PC to Android. It is not iOS exclusive. So it is like a Walmart product and you can get it elsewhere.


        Again if you want to sell the product in Wholefoods, Walmart and Publix then you need to agree with the terms of each retailer.

        • bart

          In reply to LBJ:

          I see your point, but you are not comparing it right.

          Lets say I buy a cereal (an app) I can purchase at different shops (platforms). Once I bought it, I have paid the shop (Apple in this instance). Now I can maybe win a prize (in app purchase), that is written on the back of the cereal. Can the shop turn around and say, you bought that cereal at my shop, I need a 30% cut of the prize? No. It is a direct transaction between me and the producer of the cereal (game developer)


          Gets a bit complicated, but you see my point? :)

          • lbj

            In reply to Bart:

            I grasp your analogy but I am not sure that is right either. The cereal with the prize competition is present in advance at the time of sale and winning the prize is like accessing a closed level of the game, ie no charge.


            Another analogy is DRM laden printer cartridges, you buy the app (printer) but due to DRM you have to buy an official ink cartridge at an inflated price (the IAP). But this is allowed in the US because of DRM protections. You can get a third party cartridge and that may or may not work, this is like jail breaking the OS to side load what you want. If you don’t want to use the DRM laden printer of the initial

            choice you may switch printer brand but that means getting the new printer (app again on another platform).



          • curtisspendlove

            In reply to Bart:

            Can the shop turn around and say, you bought that cereal at my shop, I need a 30% cut of the prize? No. It is a direct transaction between me and the producer of the cereal (game developer)


            Except...in this case you entered into a deal with the shop to use their infrastructure to provide the prize to the end winner of the prize. So as a shop I would definitely ask for something in return. Otherwise I’m using my assets to serve your relationship with your customer and getting nothing in return.


            If I do this a lot, I lose money, and my uncle (who loaned me the money to start my shop) isn’t going to be very happy wi the my business sense.


            As an aside, Apple’s insistence on comparing a digital goods store to a physical goods store is one of the main problems I have with their defensive explanation of their actions. It is very loosely comparable.


            A more apt comparison would be to compare to the model countless conpanies use to sell and distribute Mac or Windows software. It skips entirely the “middle ground” we went through when the internet was starting to come to age. Shareware distribution, etc.

            • bart

              In reply to curtisspendlove:

              "Except...in this case you entered into a deal with the shop to use their infrastructure to provide the prize to the end winner of the prize. So as a shop I would definitely ask for something in return. Otherwise I’m using my assets to serve your relationship with your customer and getting nothing in return."

              Yes, you are right, and you gave the shop the fair share when you purchased the app from the Store.

      • skolvikings

        In reply to Bart:

        So you can buy a hammer at Walmart or Home Depot right? Last I checked, nearly every app I use is on both the iOS App Store as well as the Google Play Store. A good majority are also on the Amazon App Store. You do have choices. Don’t like Apple’s policies or prices, switch to a different platform.

      • shameer_mulji

        In reply to Bart:

        They're called iOS apps for a reason => they can only be run on iOS. Epic still has the option of distributing their service on Android, Mac, Windows, Linux. Just like cereal companies can distribute their products at a multitude of big box stores.

      • lvthunder

        In reply to Bart:

        Sure you can. Build a web app. Convince iOS users to switch.

    • SvenJ

      In reply to wdc2: What if you bought a generator at Walmart. From that day forward you could only get gas for it at Walmart, and Walmart got 30% of every gallon you bought? That's how in app purchases work. You buy a game, Apple gets 30%. You buy an outfit for your character in the game, Apple gets 30%. With a real generator you could get you gas anywhere. Not so with in app purchases. Don't know if Apple is hosting the outfits, guns, golf clubs, you can buy or not, but you can't get them outside the game/store/process.
      Subscriptions are a bit different. Lets say you buy an Apple TV at Walmart. Then you subscribe to Netflix for $10/month to watch on that Apple TV. Should Walmart get $3 of that every month? Apple does, when you subscribe to Netflix, YouTube Premium, Hulu, buy a book from Amazon, etc. from the app on an iPhone*. Every month. In this case you can subscribe to those service outside Apple and make use of them on your iPhone, but Apple does not allow that to be advertised, in the app.

      *some of those subscriptions aren't possible because the services don't allow purchase/subscription in the app to avoid the fee, like Kindle. Others just charge you the 30% Apple is going to skim, like Google. Check the price of YouTube premium from within the YouTube app and via Safari. about 30% different.


      • lbj

        In reply to SvenJ:

        Again I am not sure that the generator and fuel analogy works either. This is assuming the app is an open platform that can move between OSes, like a generator can source fuel from anywhere this is not the case and the app requires the OS infrastructure to run.


        This is more like buying a car and the adding specifications to the vehicle after the fact. So for example buying a Telsa and adding autopilot later, you cannot side load autopilot, you have to buy it from Tesla and Tesla take the money. Or you have a BMW and you want to add an eFunction to the BMW ConnectedDrive platform, you cannot add that yourself but you have to buy it in a BMW store or dealership. In either case you can modify the car but you’d need to either go official or crack the car’s secure platform. Again like jail breaking.

      • curtisspendlove

        In reply to SvenJ:

        What if you bought a generator at Walmart. From that day forward you could only get gas for it at Walmart, and Walmart got 30% of every gallon you bought?


        Walmart could very well come up with their own brand of generator and fuel.


        If they could convince me that their generator and fuel are worth the extra cost to me, it’s my choice, no?


        Maybe it is more secure. Or their generator is easier to use. Maybe it is more efficient at higher or lower temperatures or altitudes. Or maybe it just has a fancy color and lightning icon on it that I like. Or maybe I just like walking around with a Walmart t-shirt and baseball cap on. Flaunting my fancy Walmart generator to my neighbors.


        Should the government be able to come in and tell Walmart they can’t build their own brand and charge for it?


        BTW, you do realize that the price you pay for every gallon of gas you pump into your car (at least in the US) gets split up into portions. A (very small) portion goes as overhead to the store, the rest goes as taxes to local and regional government. The store is taking a percentage for being the middle-man so that the fuel company doesn’t have to setup gas stations everywhere and so the end-customer doesn’t have to order fuel by the semi-truck-full direct from the refiner.


        The only reason a gas station doesn’t do a 30% markup is because the store across the street would do 29%, which would lead them to do 28%. And this cycle continues until we get to the current, very minuscule, markups customers will pay. And this is why gas stations try to get you into the store so they can sell you a king size Kit Kat and a 2 for $3 bottles of Coke (which has a much higher markup). You should see the markup on a soda fountain. ;)

      • skolvikings

        In reply to SvenJ:

        If Walmart sold a generator where I could only buy the fuel from them at a high mark up, and assuming that bothered me, I wouldn’t expect the government to go after Walmart, I’d just buy a different generator from a different store. ?‍♂️

      • bart

        In reply to SvenJ:

        I like your analogy better. Mine sucks :)

    • lbj

      In reply to wdc2:

      I agree with wdc2.


      An App store purchase of the App itself is like buying merchandise from a physical store. The retailer marks up the item markedly compared to the supplier's cost, this is how they pay for their infrastructure and overheads (store, staff, energy, taxes, etc.). Now the mark up varies based on the retailer type and is probably lowest for groceries and highest for clothing and beauty. 30% is the chosen mark up for Apple and Google to cover the costs of the store, security, development, etc.


      An In-App purchase (IAP) is closer to the credit card 3% fee analogy if we regard IAP as merely a fiscal transaction and a mere payment method. However, creating a new third party sale within the retailers infrastructure is more like a opening a dedicated concession stand within a department store or shopping mall rather than a transaction fee. The concession holder has to come to an additional agreement with the department store/mall owner. The concession stand sales have to cover this cost. I have no idea what the charges for that are but I am sure that the charges levied for the concession stand sales will be higher than a simple MasterCard 3% fee.


      What EPIC did here is set up a concession store without permission. This would be like having products sold in Best Buy but then creating concession within Best Buy where you sell those same products at a lower price and without reference to Best Buy and then being surprised when asked to leave the store and having all prior arrangements terminated.


      I cannot see how this can generate a successful legal case against Apple/Google.

  28. cavalier_eternal

    The outcome of this one will be interesting and not just for the legal outcome. Epic could have sued Apple without going through the process of getting their game removed from the store. By making a public spectacle out of they are appear to be going for trial by public opinion as well.

  29. travishill

    Perhaps Apple's cut should be lower- but honestly this whole thing doesn't seem much different than the ~25-30% that you have to give up to be on Playstation / Xbox console stores - you have to certify with them (and give them their cut) to sell on disc as well...

    • IanYates82

      In reply to travishill:

      It's similar, although Epic's own CEO (Tim Sweeney) says he sees the difference between phone vs console due to consoles being sold at a loss - the crazy powerful hardware is sold cheap and is deliberately subsidised with game sales. Thus the whole ecosystem is in on the gig - consoles are sold to users where the cost is borne by the console maker *and* the game sales.


      Phones are more general purpose devices which are most certainly sold at a profit before any of the software from app stores gets involved.


      The whole reason (at least the one stated publicly) Sweeney did the Epic game store on the PC was to avoid Steam getting their 30% cut since Epic made it a 12% cut instead. He says both Steam and Epic really just make a launcher and happen to provide a convenient way to buy the games which doesn't warrant 30% - the PC users have already paid the PC manufacturer, who has paid Microsoft - those other companies are making a profit.

      That's quite similar to Google and the phone makers where there's a hardware party and an OS party. Apple being in tighter control - owning both the hardware AND the *only* means of distribution - makes it more egregious, where they want the cut available to consoles without the deliberate loss leading. Having it both ways isn't consumer friendly.

  30. colin79666

    Now they are playing 1980-fortnite. Great play on the Apple 1984 ad the distopian world Orwell depicted. This was well planned and executed. Apple are sadly becoming Microsoft of the 90s in their behaviour.


    Apple's arrogance looks to be catching up with them.


    Nineteen eighty-fortnite:

    https://youtu.be/euiSHuaw6Q4


    Odd. Nothing about this story in the Apple News app...

  31. navarac

    This made my day after the vitriol from some people on a previous post.

    I shall just sit quietly and read any Apple users' comment and see if any of them defend Apple. I don't hold my breath :)

    EDIT: Interestingly this made the General Media (BBC News)

  32. davidblouin

    Google just remove Fortnite from it’s app store.


    Waiting for that lawsuit and a 1984-esque video...

  33. curtisspendlove

    If Apple is required to change how the App Store works, I’m willing to bet they’ll make the following change.


    You can choose to either:


    • Use the App Store, including Apple handling payment processing and distribution of your app (and accept Apple’s cut, though they’ll probably have to prove the cost is fair or lower it)
    • Use the App Store as a stub, essentially listing your app in the store but they shell out to your payment gateway and you also have to distribute yourself (provide a download link for the bits)


    I’ve been incredibly curious to know what the download transfer cost of a popular free app is to Apple.


    Currently, the paid apps in the store are subsidizing all the other ones. Seems like this would be a far more fair way to handle it.

    • dftf

      In reply to curtisspendlove:

      If I were Apple I'd say that developers can choose to host an app themselves, but it has to be done on a mac (so get a sale in) and you have to install software made by Apple that will make the hosting secure (it will handle the encryption and certificate-signing to ensure it's not been tampered with).


      Then when a user downloads an app, Apple simply requests the download from your server, and for payments, they can all be done directly with the vendor, either via credit or debit-card, or a method like PayPal, but Apple inform the user that all support for refunds or cancelling subscriptions has to be done with the vendor directly.


      (Though that last part might be tricky as certainly in UK law when you buy something from a shop they are legally responsible for things like warranty, refunds and replacements, and cannot ask you to go to the vendor directly. So this would be region-specific).

    • MikeCerm

      In reply to curtisspendlove:

      My understanding is that the cost is negligible. Apple has peering agreements with ISPs, so they don't pay for bandwidth.

      • lvthunder

        In reply to MikeCerm:

        You're kidding right. Facebook sending out updates every other week costs nothing. I don't believe that for a second. Apple is not an ISP so I don't know how they could make a peering agreement.


        Also I'm sure all the servers in the data center that host the app store is all free as well.

        • Paul Thurrott

          It's sad and tragic to me that any thinking person, when confronted by the facts of this situation, would repeatedly rush to the defense of the most successful company on earth that is clearly abusing its market dominance as it races to a $2 trillion valuation.
      • curtisspendlove

        In reply to MikeCerm:

        All the more reason it would hurt to have to implement your own payment and distribution system.


        For the average Joe, bandwidth isn’t exactly cheap.


        However, I expect the ultimate goal here for Epic is to try to crack iOS open to 3rd party App Stores so they can get their horse in the race.


        Beneficial for Epic, sure. For most everyone else, not so much.

  34. olditpro2000

    Apple's main problem with the App Store is consistency.


    Some apps aren't subject to rule XYZ because they are "reader" apps. Of course the definition of "reader" has amounted to "whatever Apple wants to classify" as such.


    Some developers aren't subject to the 30% cut because they negotiated a deal with Apple. Of course not ALL developers can do so, only chosen ones.


    Apple is certainly allowed to decide what to sell on their store, based on a set of rules they define. Apple can certainly choose to take a cut of the sales at an amount they see fit, regardless of if we think it's too much. However, those rules and the cut taken should apply to ALL developers.


    When Apple started changing the rules for a select few within (I believe) the past 5 years is when their App Store policy problems began. Things are starting to unravel as more of these stories of inconsistency have come to light. If I were an Apple developer, I'd be beyond tired of reading their boilerplate "App Store guidelines that are applied equally to every developer" when I KNOW this is patently false.

  35. tripleplayed

    I like it. I like it a lot.

  36. bart

    See, this is the level of consistency we are craving on Windows 10. Apple being complete *ssholes in this instance.


    Just sayin.

  37. dftf

    In reply to pecosbob04:

    You could update it if you fancy... Wikipedia is there for everyone to edit :)

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