Epic Games has announced that they have filed an antitrust complaint against Apple in the European Union – bringing their fight for ‘fairer’ digital platform practice to a wider scale.
While the world battles a pandemic, Epic and Apple battle to keep their coffers full – and this stem from the Cupertino-based tech giants removing the Epic Games Store as well as Fortnite from the Apple App Store. What ensued was a legal war, fought on and off, Apple’s monopoly on digital stores in the iOS ecosystem.
To make sense of all of this – Epic Games explains in their blog post that this decision comes from their want to address the ‘harm’ caused by Apple’s long-standing policy that removes competing products on the store that distributes apps, and carries out its own payment processes.
Apple requires all third-party app publishers pay up to 30% in an Apple tax to list their products on the Apple App Store; and this tax also applies to in-app purchases, whereby Apple receives a cut of however much a publisher earns from the transaction.
To circumvent this, Epic Games tried introducing their own app store, which was to be distributed on the Apple App Store, whereby users can download games like Fortnite onto their devices; it was promptly removed. Epic found a way to bypass Apple’s tax for in-app purchases like Fortnite’s V-Bucks, which also then prompted Apple to ban the game from the App Store.
Why the fight matters?
Image credit: Coalition for App Fairness
Because Apple takes a cut of all transactions, publishers need to up their prices in order for them to maintain a healthy profit – this increase in price is directly borne by the end users. Should publishers be allowed to push their own app stores, and payment systems without needing to share a cut, they can keep product prices low, which is what consumers want.
In fact, Apple’s in-house apps don’t need to pay the dreaded tax rates, and therefore can afford to offer their products at a lower price, leading users to choose Apple’s apps over its third-party counterparts – that’s basically a monopoly.
The Coalition
Image credit: Coalition for App Fairness
Realizing that to overthrow a mammoth that is Apple requires a joint effort, the likes of Apple, Spotify, Deezer, and more formed the Coalition for App Fairness; and proposed a solution in a form of an improved code of conduct that it wants Apple to follow.
From here, we can see the Apple tax and the company’s practices don’t just affect Epic Games, but other publishers as well – especially if Apple has a competing in-house app; we’ll now have to see what comes of the antitrust hearing, and how the results will affect users like us.
