Apple is a $2 trillion-dollar tech goliath, and in no way a stranger to legal charges and embattlement. This year alone, the company was sued for breaking EU privacy laws, several antitrust trials, and trouble with the Right to Repair movement, which seeks to reveal Apple as a monopoly at the expense of competition. Last year, Apple kicked Fortnite out of its App Store, initiating a court battle between Apple and Epic Games, which started last Monday. Is Fortnite in trouble?
According to CNN Business, Epic Games and Apple started their high-profile legal battle that’s expected to last for at least two to three weeks, with a potential to change Apple’s app ecosystem, but also an entire app economy worth billions of dollars. At the very heart of the lawsuit lies Fortnite, Epic’s massively popular battle royal game, which was previously removed from the App Store, for breaking its rules on digital payments by establishing a proprietary payment system. And that’s where it all started.
Epic Games actually threw the first punch by granting discounts on in-game items to Fortnite players if they completed their purchases outside Apple’s payment system. This move violated Apple’s rules and cut the company from collecting any commissions on in-game app purchases within Fortnite. And since Apple gets a 30% cut from many in-app purchases on their iOS devices, it doesn’t allow any alternative payment systems. Epic Games’ move was a direct challenge to Apple’s power, caused Apple to remove Fortnite, one of the world’s most popular titles, from their Apple Store, prompting Epic to file a lawsuit in federal court.
And the trial opened last Monday, with Epic presenting its case and its first witness – the company’s CEO, Tim Sweeney. Epic Games is trying to establish that Apple’s refusal to allow other app stores on its platform constitutes anti-competitive behavior and monopoly. The developer of Fortnite also stated the Apple uses iOS to create a restrictive environment for users and app developers and charge them commissions for additional transactions. And whoever doesn’t play by Apple’s rules gets kicked out.
Apple argues that the introduction of third-party services on its devices and systems which aren’t subject to the company’s restriction potentially compromises the security and privacy of its ecosystem – which is one of the Apple system’s top selling-points. Additionally, the company argues that it’s competing in a massive video game market, over which it has no monopoly, and cannot abuse any position of power. Moreover, its iOS operating system competes with several other platforms on the market, meaning that the company isn’t breaking antitrust law.
The entire case can be narrowed into technicalities. Epic argues that Apple uses its control over the App Store to impose a monopoly on the Store’s market. And in that case, Epic is clearly correct. However, Apple centered its case around Fortnite, which includes several gaming platforms, where Apple has very little influence, let alone a monopoly. With everything said, Epic’s potential win over Apple would shake the entire foundations of a $200 billion app market economy, allowing companies and developers to avoid paying commissions to Apple – costing Apple a hefty sum of money.