Epic has filed lawsuits against Apple and Google after its Fortnite app was jettisoned from the App Store and Google Play. The issue: The 30% fee that Apple and Google get on each purchase.
Epic Games is probably best known for the virtual battles players have in its hit game Fortnite, but the company is gearing up for a real-life battle against two of the tech industry’s biggest guns.
This week, Epic filed lawsuits against both Apple and Google after its Fortnite app was booted from their respective app stores for violating specific guidelines. A multi-player, shoot-em-up, survival game, Fortnite is free but offers in-app purchases. And therein lies the issue.
Apple and Google each get a 30% cut of every purchase in their app stores, whether apps or in-app features. Arguing that this cut results in higher costs for users, Epic tried to circumvent the app stores by selling V-Bucks for in-app purchases for Fortnite directly to customers.
Apple said that move was a violation of the App Store guidelines, so it removed Fortnite from the store, prompting a lawsuit from Epic. Google also pulled the game from Google Play for similar reasons, triggering a suit against the Android giant.
So now Epic finds itself in a legal battle with two of the most powerful players in the tech world.
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Revealing its initial intention on its website before the app store removals and lawsuits, Epic said it was introducing a new way to pay for V-Bucks for the latest Fortnite update via iOS and Android: Epic direct payment. Touting the direct payment route as a cost savings, Epic said that customers would save 20% going this route, pricing the V-Bucks at $9.99 through Apple and at $7.99 through direct payment.
“Currently, when using Apple and Google payment options, Apple and Google collect a 30% fee, and the up to 20% price drop does not apply,” Epic said. “If Apple or Google lower their fees on payments in the future, Epic will pass along the savings to you.”
But this move to offer direct payment is what got Epic into trouble first with Apple, which on Thursday removed Fortnite from its App Store.
“Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users,” Apple said in a statement shared on TechRepublic sister site ZDNet. “As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.”
In response, Epic quickly filed a lawsuit against Apple. In its suit, Epic said it’s not looking for monetary compensation or special treatment for itself but rather is seeking relief to allow fair competition in key markets that directly affect hundreds of millions of consumers and tens of thousands of third-party app developers.
“Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app,” Epic charged in its suit.
Shortly afterwards, Google stepped in to remove Fortnite from its Google Play store, also for violating its guidelines after Epic offered Android users a direct payment option for its V-Bucks.
“The open Android ecosystem lets developers distribute apps through multiple app stores,” Google said in a statement shared with TechRepublic. “For game developers who choose to use the Play Store, we have consistent policies that are fair to developers and keep the store safe for users. While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies. However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play.”
And just as quickly, Epic filed its suit against Google, arguing that the company is engaging in monopolistic and anti-competitive actions through its Google Play store restrictions. In its suit against Google, Epic again said it was not looking for financial compensation or a special side deal or favorable treatment from the company. Instead, Epic said that it wants an open and competitive Android ecosystem for users and industry participants.
“Google has eliminated competition in the distribution of Android apps using myriad contractual and technical barriers,” Epic charged in its suit. “Google’s actions force app developers and consumers into Google’s own monopolized app store—the Google Play Store. Google uses this monopoly power to impose a tax that siphons monopoly profits for itself every time an app developer transacts with a consumer for the sale of an app or in-app digital content.”
In its battle, Epic has also tried to rally the troops in the form of customers and users who now have no way of downloading Fortnite on their iOS and Android devices unless they had downloaded it previously. On its website, the game maker has created a page with the hashtag #FreeFortnite and an FAQ criticizing Apple for its actions. Epic has also cooked up a quick video called Nineteen-Eighty Fortnite, a parody of Apple’s famous 1984 commercial, but this time with the iPhone maker as the bad guy.
Though Fortnite’s efforts seem like a case of one David against two Goliaths, this is far from the first time Apple and Google have been accused of monopolizing their markets.
In late July 2020, Apple CEO Tim Cook was called before Congress to answer questions about the company’s alleged monopoly with smartphones and mobile apps. Claiming that Apple doesn’t have a dominant share in any market, Cook defended the fees charged by Apple for App Store purchases, calling them lower than those from most of its competitors.
Apple also has always promoted its App Store as a safe and secure place where apps are vetted before becoming available to users. And it has continually pointed to the profits that app developers earn, even after the 30% commission.
But other app developers have criticized Apple for its commission costs and store policies, complaining that the App Store is the only viable method for the distribution of iPhone and iPad apps. And many of those developers will be more than happy to join Epic’s fight, at least in spirit.
Google’s app store isn’t as strict. Google allows other app stores on Android devices, such as Samsung’s Galaxy Store and Amazon’s Appstore. But developers who go through the official Google Play store are subject to the fees and policies handed down by Google, which many consider restrictive.
Some type of compromise would be in the best interests of all parties, placating app developers and making Apple and Google look kinder, especially to regulators eager to clamp down on the companies. But the two companies have deep pockets and high-priced lawyers and are used to combat in the legal arena. Changing their store policies and commissions could set a dangerous precedent, so Apple and Google are likely to fight this one out if necessary.