Epic Games released an updated version of the iPhone app for Fortnite in August, with a series of arcane but significant updates. There are two ways to purchase V-Bucks, the game’s in-game currency: purchasing through the Apple App Store at the regular price of $9.99 or via a new “Epic direct payment” at a discount of $7.99.As a result of this change, Epic deliberately violated Apple’s App Store regulations. Every so-called in-app purchase must be done through Apple, which typically charges thirty percent flat.
The provocation Epic made worked, though. As soon as Apple recognized the infringement, it removed the Fortnite app from its marketplace, allowing the game developer to sue for antitrust and anticompetitive behavior. This act of legal trolling paid off last week when the lawsuit concluded and Judge Yvonne Gonzalez Rogers issued a landmark decision against Apple. (Epic did the same with Google, who removed Fortnite from its Google Play marketplace for the same reasons.).Rather than banning developers from using their payment systems through iPhone apps, Apple would allow them to use other “purchasing mechanisms”, she said. When the ruling takes effect in three months, Apple will no longer have full control over how iPhone users pay for products.
There are significant implications for users and developers alike despite what may seem like a petty administrative issue. After Apple introduced its App Store in 2008, any money spent on or through apps, such as Tinder subscriptions or extra lives in Candy Crush, was subject to a thirty-percent fee.
Companies have made subscriptions unavailable through their apps to avoid giving Apple this cut – for instance, you can access Netflix through a separate Web browser to avoid giving Apple this cut. As soon as the court order goes into effect, Apple’s tightly sealed ecosystem will lose some of its impermeable feels. As the digital economy continues to grow, the lack of competition will be a global concern-the Epic suit in the United States took place at the same time as similar App Store battles that Apple is facing in Japan, India, and the European Union.. (Apple now offers a 15% App Store fee for developers earning less than one million dollars annually, but those developers make up a small percentage of total App Store revenue.)
There is a need for this regulation because many technology companies are practicing more like App Store-style marketplaces instead, as they strive to develop “the metaverse,” a multi-platform virtual space that is interactive and cross-platform. Metaverses are, by definition, economies in which users can purchase, buy and access digital products on various digital platforms. You can already buy all sorts of digital experiences through Apple’s App Store, which follows you from phone to phone. As far as we know, it is the closest thing to a metaverse we’ve got so far.
However, a centralized payment system like Apple’s, which benefits the platform rather than creators or users, disincentivizes the kind of openness and portability that is the basis of the metaverse idea. Tim Sweeney, the founder of Epic Games, had already agitated against App Store restrictions before the lawsuit. Apple has outlawed the metaverse by impeding third-party transactions, he tweeted last August.
The Verdict Highlight
This case involved Apple vs Epic Lawsuit, and neither side expected the outcome. Apple has claimed that Epic Games’ Fortnite game is a monopoly and that it charges exorbitant fees on its App Store. In many ways, the decision of the federal court in Oakland, California will set the tone for how big tech works in coming years, even though it’s a compromise of sorts.
Following the Apple vs Epic Lawsuit, Apple CEO Tim Cook told employees that the company was “looking forward to moving forward.” Apple’s CEO, Tim Cook, spoke out on the case in an all-hands meeting, highlighting its legal wins and downplaying the loss on a claim alleging unfair competition.
“If you recall the purpose of App Store, that is for users to explore and discover apps.”. Developers would benefit from it,” Cook told employees. ‘Epic’ wants to be treated differently.. Everyone is treated the same according to our rules. We have repeatedly refused to treat them differently, and they have sued us on ten different counts. Apple won nine of those arguments and Epic won one. The court ruled that Apple is not a monopoly as we have known for years.The Apple market is fiercely competitive.”
Highlights of Apple vs Epic Lawsuit
What the ruling means for iPhones and iPads users
With an iPhone or iPad, you may be able to pay through the developer’s systems for a streaming app. Some apps are introducing new buttons that allow you to purchase content (like Roblox) through their payment system. You can also complete your payment online through a web browser. Does that mean in-app purchases will be cheaper? As of yet, we don’t know. Now that Apple has given developers the option to use their payment system – either they lower their prices or they keep the savings.
Epic Games filed antitrust claims that went too far
Despite the verdict, Apple still intends to keep its 30% commission on its payment processor. Fortnite developer Epic Games “overreached” in its antitrust lawsuit against Apple, according to Judge Rogers. Fortnite wasn’t called a game from the very beginning, but debate raged on whether it was. As there is no legal definition of a game, the judge found Epic’s methods of defining the product market to be flawed. It was never about the method of distribution of video games, but about how payments are handled. The ruling is Epic Games’ only victory since it clearly states that Apple cannot prevent app developers from directing their users to third-party payment options.
Due to Epic’s breach of contract with Apple, it avoided paying Apple the App Store cut for months. In 2016, Fortnite’s makers violated App Store policies, resulting in an Apple fine of $3.6 million. This prompted Apple to ban Fortnite from its App Store last year after Epic introduced its payment system. It marked the beginning of Apple’s legal battle with Epic Games.
Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. https://t.co/cGTBxThnsP— Tim Sweeney (@TimSweeneyEpic) September 10, 2021
As expected, Epic Games, the company’s chief executive, said the ruling was “not a win for developers or consumers”. He added that the company was fighting for fair competition between in-app payment methods and app stores.