In 2020, Epic Games (EG) video & software development giant, famous for Fortnite, filed a lawsuit against Apple for claims of unfair trading and anticompetitive actions that lead to Apple maintaining a monopoly.
This came off the back of Epic Games giving Fortnite gamers, of which there were 500 million players in March 2023, a choice on how they would like to pay for in-app purchases. In the App store it was $9.99 for the app through the Apple App Store and the alternative was $7.99 for buying direct from Epic Games. Apple believed that this was a breach of the agreement that all apps/businesses have with Apple and they banned Epic Games from sale on their app store. The terms for tech businesses are clear, if you are accessing Apple’s marketing and distribution engine and you are successful, then you will pay somewhere between 15 – 30% sales commission to Apple.
Epic Games Declares War On Apple! | Joseph Carlson Ep. 108
Epic Games also created a social media campaign mimicking previous Apple marketing material, namely a 1984 Superbowl ad, which was released soon after (about 10 mins) Apple banned Epic Games from the app store. EG claim that they defied Apple’s terms and conditions and in retaliation Apple blocked their ‘golden child’ game from 1 billion devices. The social media campaign came with the hashtag #freefortnite. According to The Joseph Carlson Show, a podcast that was published in August 2020, Epic Games was antagonising Apple. They did not want to play by the terms and conditions set out by Apple so literally tried to game the system. Apple retaliated by banning them and they unleashed, see above video, that was pre-made to gain traction. Carlson went through the original documents submitted to the court to sue Apple to try and gain an understanding of EG’s perspective. He summarised the complaint with the following points:
Apple is a $2 trillion business, giving them ultimate power and control over any business that seeks to use their platform. Software developers speak of feeling like a statistic and that focussing on profit has led to a glut in innovation and experimentation. The app store gives content makers access to over a billion devices, however, there is only one for Apple, that directs customers through one entrance and sets didactic terms and conditions. EG describes the fees taken from every sale, “an oppressive 30% tax”. There’s a lot to be said about the emotive language used to describe fees if you a claiming that there is a big giant stealing your money.
Carlson points out that Apple is not alone here, Microsoft charges the same, as does Google, Samsung and Playstation. Services like Amazon (Twitch/Audible), Patreon & YouTube are taking even higher cuts off content makers through advertising dollars.
After 3 years in American courts where Epic Games sued not only Apple but also Google and lost on almost every charge, at which they appealed repeatedly until the matter was overseen by the Supreme Court. The Supreme Court recently ruled that this matter is now closed. There will be no more appeals from either company. However, in Australia, this court case is happening in real time.
Following the fight in US, European and UK courts, Australia is the last bastion of hope for not only Epic Games, which is worth about $32 billion but also the consumer who might want to subvert their purchasing power by using other platforms to get their apps or other market stores to pay for in-app purchases. On the back of the EU case, Apple were ordered to change some of their policies around in-app purchases and developer marketplace. Apple has restored EG’s developer account as a result.
There is also a simultaneous class action from Australian software developers that are fighting for lower commissions, lower fees, lower app prices for audiences and more flexibility to massage market innovation and growth and therefore increase competition. The class suit will only go ahead if Epic Games wins their case. Justice Beach has given this a 6 to 12 month timeline for hearing all the evidence from EG CEO, Tim Sweeney and executives at Google and Apple before submitting his judgement.
