Epic Games, the developer of the popular game Fortnite, has sued Apple and Google after the two took down Fortnite from their respective app stores. The removals had come after Epic Games started allowing users to pay directly to them for in-app purchases, by essentially bypassing the official payment mechanisms that both Apple and Google mandate. The app was not present on the Indian app stores at the time of publication, MediaNama has verified.
What led to the removals: At the heart of the issue is Epic Games’ decision to provide Fortnite users a payment mechanism to pay directly to the developer, which the company already uses for Fortnite apps on PC, Mac and the Epic Games Store. On top of that, purchases made by the direct payment method were priced lower compared to the mechanism mandated by Apple and Google. While the company did not specify why it introduced this payment method, it is safe to assume that it bypassed the mandated in-app purchase mechanism to not share a cut of the revenue with Apple and Google. Both companies charge a commission on in-app purchases from anywhere between 18% to 30%.
The alternate payment method introduced by Epic in the Fortnite app
“The open Android ecosystem lets developers distribute apps through multiple app stores. For game developers who choose to use the Play Store, we have consistent policies that are fair to developers and keep the store safe for users”, Google said in an emailed statement to MediaNama. “While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies,” it added.
An Apple spokesperson directed us to a statement that the company gave to publications in the US: “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. 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 has had apps on the App Store for a decade, and have benefited from the App Store ecosystem – including its tools, testing, and distribution that Apple provides to all developers. Epic agreed to the App Store terms and guidelines freely and we’re glad they’ve built such a successful business on the App Store. The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users. We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store”.
‘Battle Royale’ between Epic, and Apple and Google
Against Apple: “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% tax on the sale of every app,” Epic Games submitted in its lawsuit against Apple, filed on August 13.
Epic said that its lawsuit aims to bring an “end” to Apple’s “unfair and anti-competitive actions” in two distinct, multibillion dollar markets: (i) the iOS App Distribution Market, and (ii) the iOS In-App Payment Processing Market.
Talking about third-party apps on the App Store, Epic said, “those apps contribute immense value to that ecosystem and are one of the primary marketing features for iPhones and iPads. But Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.
Epic started its lawsuit by alluding to the hit ad created by Apple in 1984 portraying IBM as a monopolist. Epic said, “Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear.” (Epic Games also made an ad inspired by Apple’s 1984 ad, mocking the company. Embedded below).
Against Google: “Epic brings claims under Sections 1 and 2 of the Sherman Act and under California law to end Google’s unlawful monopolization and anti-competitive restraints in two separate markets: (1) the market for the distribution of mobile apps to Android users and (2) the market for processing payments for digital content within Android mobile apps. Epic seeks to end Google’s unfair, monopolistic and anti-competitive actions in each of these markets, which harm device makers, app developers, app distributors, payment processors, and consumers,” the company’s lawsuit against Google said.
It also accused of Google eliminating competition in the distribution of Android apps using “myriad contractual and technical barriers. Google’s actions force app developers and consumers into Google’s own monopolized “app store”—the Google Play Store. Google has thus installed itself as an unavoidable middleman for app developers who wish to reach Android users and vice versa”.
“Google has relegated its motto to nearly an afterthought and is using its size to do evil upon competitors, innovators, customers, and users in a slew of markets it has grown to monopolize,” Epic Games said in its lawsuit, alluding to the company’s infamous ‘Don’t be Evil’ motto.
Bone of contention
Apple in particular has drawn ire from several app developers including Spotify, Microsoft, and more recently subscription email service Hey, for the 30% commission it charges on in-app purchases, and more importantly, for not allowing developers to link out to an alternate mode of payment. Google has drawn flak for it too, albeit not as much as Apple. Here’s what Apple and Google’s in-app purchase policy says:
Apple’s policy on in-app purchases: Apple mandates that developers must use Apple’s in-app purchase mechanism for selling any additional functionality in an app. “Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc.” the guidelines say. On top of that, iOS apps and even their metadata “may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase”.
Google’s policy on in-app purchases: While not as stern as Apple’s, Google too, mandates that any purchase made within an app downloaded from the Play Store should use Google Play’s billing system.
One can argue that Epic has a stronger case against Apple compared to Google due to Android’s comparatively open nature. Android users can still sideload Fortnite from Epic’s website, but Apple users can not. In fact, Fortnite was not available on Google Play for a long time and only joined the store in April this year after Google started telling users that the app downloaded from Epic’s website could have security issues.
