This would be an interesting MPU episode given David’s legal background (unless he doesn’t want to go there, which is understandable).
I have to say, I see what Epic is doing but Apple built the platform and risked a lot to do so. They have every right to charge fees for developers to hook up to their user base. I can’t see how it is a monopoly given you can go Android.
Not to mention they already pay every other platform - Xbox, PS, etc. Seems like a big risk to take to gain more revenue.
It’s a cost they decided they can afford, but less of a risk, since Fortnite sales are maybe 6% of the company’s revenue, over the years it already has built up most of the customers (so it’s just collecting current subscription $$), and it’s a private company which makes $1-3bn/year in revenue. It’s a risk if they need to update their Mac/iOS apps.
What actually is putting their feet to the fire is Apple’s latest salvo, in which they told Epic that if Epic does not comply with Developer Program License Agreement Epic’s dev account will be terminated at the end of the month. Apple says this would result in Epic Games losing access to all of Apple’s software, SDKs, APIs, and developer tools.
Without that access, Epic Games says it cannot develop future versions of its Unreal Engine game engine for use on iOS or macOS, which could potentially affect any of the dozens(?) of games which license the Unreal Engine for their own games. But that’s actually an open question: certain features of Unreal Engine might require a certificate that requires a dev account to for release builds through Xcode; if that’s true it would halt updates to Unreal Engine.
But there’s a lot of leeway time between necessary bugfixes and continued developments. It may not be a disastrous situation… for a while anyway.
Apple’s response to this revelation is no surprise:
The problem Epic has created for itself is one that can easily be remedied if they submit an update of their app that reverts it to comply with the guidelines they agreed to and which apply to all developers. We won’t make an exception for Epic because we don’t think it’s right to put their business interests ahead of the guidelines that protect our customers.
The US Supreme Court has been pretty consistent in holding that companies do not have a “duty to deal” so Epic’s legal attempt (and its recently reported attempt to get other businesses to join it in an anti-Apple coalition) may well fall flat. They’ve got about two weeks before they get kicked out of the dev program, and if they don’t get an injunction keeping them in that’s when the clock starts and they have to hope they don’t need to update or bugfix their app or the Unreal Engine.
Yes, and this potentially could backfire on Epic big time. Countless developers now find themselves dragged into a dispute they never asked to take part in (… and are probably now regretting they didn’t choose Unity). If this trial is also a PR contest, Epic might lose some good faith here.
Interesting analysis, maybe a bit too long 
Just a gut feeling, but I don’t see how iOS can be the right battlefield to get an alternative App Store… I mean if there’s something that Apple will defend with all it’s energy and money is the uniqueness of the App Store… but still just a gut feeling
Apple responded in court (pdf) to Epic. In an attached declaration Phil Schiller said
“Over the last several months, Epic has demanded that Apple make various changes to Epic’s rights and obligations under its contracts that would be destructive to Apple’s basic business model.”
“When Apple refused to fundamentally alter the way it does business to appease Epic, Epic resorted to sudden, unilateral action that blatantly breached its contracts with Apple, and simultaneously filed this lawsuit, which seeks to justify its deliberate breaches after the fact.”
Apple says its policies are similar not only to those used by Google, Amazon and Microsoft for their platforms, but also to other game marketplaces such as Xbox, PlayStation, and Nintendo (with whom Epic notably has chosen not to sue, despite requiring the same 30% cut).
An Axios article says “Between the lines: Apple says Epic has no antitrust case against it because it can’t possibly monopolize the mobile app market, given competition from Google. (Epic maintains that Apple’s App Store and Google’s Play Store are in fact discrete markets, each a monopoly in its own right.)” This is fascinating, not only because it posits an eccentric definition of the term, but because in that case Nintendo, XBox and Playstation would similarly be a ‘monopoly’ in their own respective rights. (And yet they’re getting a pass from Epic, while having close ties with the company.)
I see Epic’s point, though I’m not sure I agree with it.
The difference between a monopoly, a duopoly, and a truly free market is clearly a bit of a spectrum. Power increases exponentially the less alternatives there are. (I guess the difference in the gaming world is that you can technically create and sell your own games for computers generically, but in the case of mobile apps you effectively have to go through an app store? Again, there’s clearly a spectrum, and the gaming console companies are obviously on the powerful side of it, so I agree that it’s odd that Epic’s left them out of the conversation.)
The real question is to what degree should a company retain that power if it begins to stifle the success of others dependent on it, and how to determine what “stifling” looks like.
The sad thing, to me, is that this conflict is kind of pretentious. Two giant companies (in the case of Apple vs Epic) are arguing about who gets to get richer faster.
I hope the policy conversation that follows somehow manages to consider those developers who aren’t making north of billions.
Epic wants to push its own app store (in which it takes a 12% cut) into Apple’s App stores (and build it own app store, which is currently pretty puny). When Apple of course said no Epic deliberately changed their code to effectuate it anyway. What’s pretentious is that nothing required them to do this in order to sue, nobody required them to make that 1984-style video (did you know it’s the start screen when you launch Fortnite now?), and hardly anyone is noting that they’re not doing the same thing with console makers (who either license their software or own a percentage of the company). It seems clear that this is a loser of a legal argument meant to engender consumer support and then to push their agenda via legislation (especially in the EU).
It’s not just about their own revenues, though. Apple believes their view of the app store is good for developers (safe, trustworthy downloads and payments, high payouts through subscriptions.) Epic believes theirs is good for developers (~25% more revenue for every developer [88% payout vs 70%].)
And that’s true even if Epic is keeping console makers at bay right now, before I get the same reply again. It’s not a gotcha.
Rene Ritchie has released a successor to his previous video on the situation.
The console makers are unsurprisingly supporting Epic Games.
I hope that this ultimately loosens Apple’s ability to block game streaming services and apps that mention you can buy/subscribe outside of the App Store.
On Gruber’s podcast last week, he had R. Ritchie as guest and they discussed that ‘console’ is mistakenly equated with ‘game console’ but it can be argued that iOS hardware is a console product and that Apple has as much a right as Microsoft and Nintendo and Sony and Steam to require products and payments to go through the system. It is an interesting argument (for years I’ve argued that Apple was uniquely a consumer ‘Systems’ company) in which they didn’t take sides in the fight.
I’ll check that podcast out. Thanks for sharing.
I think cellphones fall into a different category than video game systems, given their role in our lives. It seems strange for two companies to have that much control over designings devices now vital to how we live modern lives with so little regulation. Apple and Google’s choices can change our lives. We use phones to navigate, contact emergency services, apply to a job, buy products/services, order food, access education, etc.
Speaking of monopolies, I hope the government goes after ISPs! Maybe Epic can help with that one next? Or Apple? We all care about equity now, right? (remember the tweets for social justice?!)
iOS isn’t merely “cellphones” but if you want more flexibility with a choice of app stores, Android is there, with a few hundred app stores around the world. (Of course the tradeoff is that Android is also significantly less secure, and has significantly more privacy issues, from handset makers, crooks, and governments. Opening up iOS opens up the platform to the same ills as Android.)
Steve Jobs for decades prior to introducing the iPhone wanted to make his computers sealed appliances. This is just an extension of that, one might argue. For years in the early 80s Minitel was ubiquitous in French homes (the government provided them for free) with complete control over what appeared through the service into the hardware boxes - there was never any legal basis to open it to whatever services or apps wanted to appear on it. XBox offers games but also music and movies and becomes ever-closer to a home PC, and yet it’s totally locked down - nobody especially Epic suggests opening it up.
And just because mobile computing devices have become intrinsic to our lives doesn’t mean that Apple, which has 23% worldwide marketshare, needs to allow multiple app stores, any more than Nintendo, which has a majority of consoles sold, needs to open its hardware. The argument that the device is important to people is not a legal argument to open it to competing stores - nobody was demanding that Microsoft open the WindowsPhone store, any more than anyone has a right to demand online alt-XBox stores.
iOS was designed for reasons of security, privacy - and yes profit - to be controlled as it has been for over a decade. Epic has stated they want to create their own competing app store inside iOS - this suit really is not them standing up for consumers.
Hi, just as an aside, I’m French and this is completely untrue. First of all, the Minitel was provided by the Post office, which was then public, but it’s already very different than the government.
Second, the Minitel was a very light terminal with the most basic rendering capabilities. You would connect through a very primitive form of dial-up to paid numbers with varying prices (3615 being the most common and one of the cheapest). The services provided whatever they wanted because there was no control whatsoever over whatever appeared on your terminal – case in point: there was a thriving dating and porn industry on the platform (with online chat with sex workers). Whole French industries built themselves on that because it was hugely profitable – Free, one of our main Internet and cell providers, was born out of that. It was called the “Minitel rose” (Pink Minitel) and the expression remains to this day in the language (although, of course, it’s fading by now).
Third… the Minitel stayed in homes until much later than the early 80’s. Many older people had adopted it and had a very hard time switching to anything else that was more “computer” (the Minitel was very basic, but it also was a huge strength as anybody could use one).
Microsoft is but one “console maker” and it’s not making consoles only. And it’s actually supporting Epic regarding the Unreal Engine, not Fortnite. Console makers will never support Epic because they would shoot themselves in the foot. This is a much better on take:
First of all, I agree 100% that Epic is not standing up for consumers. Epic is trying to get Apple to allow Epic what is best for Epic. And they might think that it is the perfect timing to do that right now.
Then again, I see Apple being at a crossroads.
It is not only Epic raising “concerns”, it is a huge bunch of the developer community that is speaking up or suffering silently. And I think that it won’t take long until regulators will chime in.
https://sixcolors.com/offsite/2020/08/time-for-apple-to-reevaluate-how-the-app-store-does-business/
All this in combination with the exposure notification API, which already has brought lawmakers’ attention in Europe to the fact that Apple and Google are basically 100% able to determine how any game is being played in combination with smartphones, might lead to more lawsuits and legal initiatives to regulate those big tech companies…
And Epic knows that and seems to try getting some kind of special treatment from Apple in this climate which might hurt everybody in the long run - potentially also us consumers…
The plot thickens!
Public owned means government run.
And I mentioned the 80s because it debuted in 1980 and was most popular in the 80s.
It was a proprietary service, like Bloomberg terminals today, which dominate that market and have full control over what users can access on - and there too, with its monopoly no one can demand Bloomberg open its service to additional software or services.