Epic Games has ruled the world of video games since its launch. Now it wants to change the Apple App store too. Apple products have existed with the bond that all Apple-compatible apps are accessible only on App Store. Since there are billion of iPhone users, that’s why Apple attracted millions of App developers too. As Fortnite maker Epic games sued the tech giant alleging Apple for abuse of power. Apple is now in trouble for being monopolistic.
Apple has faced off against Epic games in California court for months and it will keep on doing so until the case end. As we know that Apple has removed Fortnite from its App store last year. Because Apple wants all the in-app purchases via its payment method. Though Fortnite is free to download game the developer has earned millions by selling digital items in the game. And for this purpose Epic games sued Apple and they are in the court.
Apple claims that their payment method is safe and fair. So if they charge up to 30% commission for sales via App store to run it. It is reasonable. However, Epic declareed these policies of Apple as a monopoly while its commission is extremely high.
Though this appears like a benign issue over who earns more profit on our purchases. Still the results will completely change the transaction methods of the Apple App Store and Google Play Store. Furthermore, it will encourage more scrutiny from lawmakers on companies like Apple and Google for holding too much power.
David Olson, an associate professor who teaches about antitrust at the Boston College Law School. Said:
“This is the frontier of antitrust law.”
Epic Games v/s Apple: Trial preview
According to Olson, this case is an attempt to confront the working method of modern tech companies. We know that Apple has a “walled garden” approach where every App is vetted and approved before it is offered in the App store. Apple promises its user, that they can trust every App they download from the App Store.
Besides charging a commission up to 30%, Apple has set more crucial policies against pornography, encouraging drug use, or realistic portrayals of death and violence. So if a developer’s App doesn’t fulfil the criteria it is not eligible to be on Apple App Store. Moreover, it also scans every App for security issues before publishing it.
Furthermore, Apple claimed; ” It makes every App undergo a strong human-assisted review. Reviewers, on the App Store, are representing 81 languages, critically check the App to make sure every App that appears on the App Store is trustworthy.” This system sounds critical for the developer. However, for consumers, it has ensured that the App Store is the most trustworthy platform to discover and download apps. According to “Michael Pachter, Wedbush Securities.
“It’s easy to say it’s David vs. Goliath, but this is like Goliath vs. Godzilla.
While we appreciate the Apple process of scrutiny, Epic games contradict the idea. Epic games think that this is an uncompetitive approach by Apple. So, the court should compel the company to permit alternative App Stores and payment procedures on Apple products. Epic games quoted on a legal filing in August that;
Apple is bigger, more powerful, more entrenched, and more pernicious than monopolies of yesteryear. Apple’s size and reach far exceed that of any technology monopolist in history.”
Music Streaming company Spotify vs Apple
It’s not only Epic games that have sued Apple. Music streaming service Spotify is on the list too. Spotify has also complained to European Union regulators about Apple breaching EU competition laws as it charges way too much.
According to the EU competition commission, the preliminary investigation found “consumers losing out” due to strict Apple policies. Moreover, Apple still has a chance to respond to this objection before the final judgment on the matter. But if Apple fails to justify it, the law will charge up to 10% of Apple’s annual revenues as a fine. With that law, Apple will have to change its policies of charges on streaming services at least within the EU. This will ultimately result in the decline of Apple revenue that apple generates via the App store.
Furthermore, the US is also examining Apple for the same cause. Last month there was a hearing held by lawmakers with representatives from all the App developers. Precisely, iPhone, Google, Spotify, dating app maker, Match and tracking device maker Tile representatives were part of the hearing. Tile also turned against Apple after the launch of AirTags. Tile thinks that the competition of Tile vs Airtags is unfair, since, Apple is bringing in its ecosystem and App store against the Tile. Apple launched Airtags on 20th April in the famous Spring event of 2021. During the case processions, Spotify and Tile both debated that iPhone’s approach is monopolistic. The App developers made the same statement about the Google play store too.
I’ll be really interested to see how much Apple argues, “This is our successful business model and this is what’s at stake. Judges are typically wary of completely upending a successful business on a theory that it could promote more competition and lower prices. But not always. “If you’re a certain judge, you might say, ‘Great! Let’s do it,”Olson associate professor who teaches about antitrust at the Boston College Law School
Until the case is in court no one can guess what’s going to happen. However, it seems like Apple will soon change its policies. Spotify and Epic games both came with very strong arguments in the court against Apple. So stay connected until we come with the update of the next hearing.