Fortnite vs. Apple: what you need to know about this battle royale that is being played out in court and in your phone

Epic Games, which developed Fortnite, accuses the Californian giant of abusing its power by taking a large commission on the gains made by the game. The trial opened Monday in the United States.


 

After months of media back and forth, the lawsuit filed by Epic Games, the publisher of the very popular game Fortnite, at Apple, opened on Monday, May 3, in Oakland (California), in the United States. This trial, which is to last three weeks, is closely watched by the entire tech economy and online platforms. Franceinfo explains why.

What is the origin of the quarrel between Epic Games and Apple?

Epic Games, at the origin of the complaint, is attacking the business model of the App Store, the application store found on Apple devices. He denounces the conditions set by the giant. All application developers can indeed sell additional content (subscriptions, virtual currency, etc.), but for this they must go through Apple, which acts as an intermediary and charges a commission of 30% on all transactions. Since December, this commission has risen to 15% for the smallest independent publishers.

The offensive began on August 13, 2020, when Epic Games initiated a communication campaign called #FreeFortnite on social networks, to accompany the launch of an alternative store within the video game application on iOS, the operating system developed by Apple for its iPhone-type devices. Epic Games thus offered its players to buy Fortnite’s virtual currency cheaper if they went directly through its payment system, and not through Apple’s.

In response, the California firm immediately removed the popular game, which has more than 116 million users on iOS, from the App Store. Consequence: Epic Games filed a complaint against Apple for “abuse of dominant position”. The video game publisher claims to fight “in principle“, In the name of the freedom of developers and gamers.

What does this change for Fortnite players on iOS?

The apple firm blocked updates and new installs of Fortnite on the App Store. She also indicated to put an end to the means of development of Fortnite on the devices dependent on its operating system iOs. Therefore, the 14.00 update dubbed “Chapter 2 – Fortnite Season 4” was not released on iOS and macOS (operating system for computers developed by Apple) on August 27, explains Epic Games on its site. It is still possible to play Fortnite version 13.4, but access to new content is not possible at this time.

Virtual in-game items already purchased by customers will continue to work on all platforms, but new Fortnite items added after Update 13.4 will not be available on iOS if purchased on a different platform.

What are the main issues of the trial?

This judicial pass raises the question of Apple’s monopoly in the tech world. Does the firm abuse its dominant position? How to define an online monopoly? These are the sensitive questions that Judge Yvonne Gonzalez Rogers will have to decide. It will also have to decide whether the 30% commission that Apple collects for each purchase is disproportionate, as its detractors estimate.

In 2017, the boss of Epic Games already said that this commission allowed Apple to make a colossal margin. “There are the servers, customer service and other costs, but it is very painful to see that these App Stores spend 5-6% of their income on their operations. [Les distributeurs] therefore pocket a high proportion of this turnover, and they do not do much to help us“, Affirmed Tim Sweeney, as reported then the media iGeneration. Apple has already been attacked on this point, in particular by Spotify. On April 30, the European Union, seized of a complaint from the streaming giant, estimated that the iPhone manufacturer had “Distorted competition” to oust rivals, especially thanks to commissions “Very high” from which its own applications are de facto exempt.

According to what Bloomberg reported on Saturday (article in English), an Epic Games expert estimates that Apple achieved a 78% margin in 2019 on the App Store. Tim Cook’s company considers this calculation to be false, because the App Store does not represent “not a separate activity“. According to her, it is impossible to gauge the profits of the brand in this way.

Apple insists that its practices do not impede competition and that the commission is only used to finance the operation of the App Store. During the first day of the trial, Apple’s lawyer thus affirmed that her client does not exercise more of a monopoly than a “grocery“, While recalling that players can find Fortnite on other platforms, including consoles or computers made by competitors. The company also asked the judge to prohibit Epic Games from revealing financial information about it.

What consequences can the trial have on the digital economy?

Epic Games is presented as the flagship of applications victims of commissions charged by the giants of the tech. Another trial should besides oppose this year the company of Tim Sweeney to Google, underlines the New York Times (article in English). A first win against Apple could have major implications. By setting a precedent, the application market, which weighs nearly 100 billion dollars, would be upset. A success of the Fortnite team would also give more weight to the attacks against the main digital players, who face various allegations of their anti-competitive practices, in the United States and in Europe.

Conversely, if Apple wins, it will strengthen its grip on mobile applications and stifle growing criticism of its business model. According to New York Times, a victory will only further consolidate the power of the world’s most profitable company, which has exceeded $ 200 billion in sales revenue in the past six months.





 

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