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Apple CEO Tim Cook is photographed at the World Economic Forum in Davos in 2020.
Fortnite Fight: CEO Explains Why He Launched War Against Apple, Google
«Today’s ruling isn’t a win for developers or for consumers,» Epic Games CEO Tim Sweeney tweeted, adding that his company was fighting for «fair competition among in-app payment methods and app stores.»
In a statement, it seized on one part of Gonzalez Rogers’ 185-page ruling. She had declared the «relevant market» in the case to be digital mobile gaming transactions. And in that market, she concluded, Apple does not have monopoly power, given the many other competitors, noting that «success is not illegal.»
«Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world,» said an Apple spokesman.
An Epic spokesperson said the company is appealing the ruling. Apple says it is «considering all legal options.»
Apple made concessions to app developers ahead of ruling
Apple recently extended an olive branch to some developers, including Netflix and Spotify, by allowing them to direct customers to payment processers outside of the App Store, but in messaging customers, not directly in the apps. It did not apply the new rule to mobile games, the most lucrative segment of apps for Apple.
As Apple’s Tim Cook Testifies, The Judge Creates The Day’s Most Dramatic Moment
The decision Friday forces Apple to take its modest changes much further by allowing developers, directly within the apps, to steer customers to alternative payment methods. And that will be applied to its millions of apps available in the App Store.
The ruling comes after a three-week trial. At the end of it, Apple CEO Tim Cook took the witness stand to defend the company policy at the center of the legal fight: the 30% commission Apple usually charges app makers whenever someone purchases their app through Apple’s App Store, or when someone buys something in an app downloaded on an iPhone.
In the most dramatic moment of the trial, Gonzales Rogers drilled into Cook about Apple’s commission rate, opening a line of questioning that seem to track with Epic’s perspective that Apple’s closed system of downloading and processing payments in the App Store has cut out competition and led to higher prices and fewer choices for consumers.
«If there was real competition, that number would move. And it hasn’t,» Gonzales Rogers said of Apple’s 30% cut.
Apple says the revenue from that fee pays for safeguarding the privacy and security of apps. Google subjects developers to the same fee rate for app purchases on the company’s Android devices. In response to pressure, both Apple and Google lowered the commission to 15% for certain smaller developers, though the bulk of the money generated for the tech giants comes from fees levied on large app developers.
Apple v Everybody
The ruling, while it is expected to be appealed, is a significant rebuke to Apple, which has risen to become one of the most valuable companies in the world in an industry largely free of regulations.
Big Tech companies face multiple antitrust lawsuits
While Washington debates ways to police the tech sector, courts have emerged as a key battlefield between tech giants and their critics. The Justice Department and state attorneys general are reportedly investigating whether Apple’s App Store commission violates U.S. competition laws. And in Europe, regulators have launched a probe into whether the iPhone’s ironclad grip on the mobile economy violates European law.
Tim Sweeney, the maverick CEO of Fortnite maker Epic Games, had launched an all-out campaign against Apple after provoking the tech giant by offering Fortnite players a way to buy game items outside of the App Store.
In response to breaking its rules, Apple kicked Fortnite out of the App Store. That led Epic to sue and launch a public relations campaign aimed at drumming up support for its crusade against Apple. Sweeney has long claimed that he is not acting just for the benefit of his nearly $30 billion video game empire, but for developers everywhere who feel squeezed by Apple.
«Everybody doesn’t have a great incentive to challenge Apple and Google’s 30% because they want to be the next bastard to charge 30%,» Sweeney told NPR last year.
Editor’s note: Apple is among NPR’s financial supporters.
- app developers
- Epic Games
- Epic v Apple trial