The pressure mounts on Apple over its app store policies

Fortnite developer Epic is not letting up in its crusade against the ‘Apple tax’, opening a new front in Europe with a European Commission antitrust complaint.

“Who do you call when you want to speak to Europe?” is a quote possibly misattributed to legendary US diplomat Henry Kissinger. While the accurate answer these days is the German Chancellor, the European Commission is definitely the best place to go if you want 27 lawsuits for the price of one.

The dispute between games developer Epic, the company behind the massive hit Fortnite, exploded last summer, with Epic accusing Apple and Google of monopolistic behaviour regarding their policy of taking a chunk of every bit of revenue developers receive from users of their mobile platforms. Since Apple and Google have absolute control over access to their user base, they are monopolies in that context and thus are free to impose whatever terms and fees they want.

Of the two Apple was more forceful in its escalation of the dispute, daring to risk a PR disaster by completely cutting Epic off. That provoked Microsoft to come out in support of Epic and, by the end of August, Apple appeared to have its back against the wall and was in danger of losing a lot of friends in the developer ecosystem.

Then everything went quiet. Japan indicated it was taking a regulatory interest in the app store monopoly issue in early September but we haven’t heard a peep since. But it seems Epic has merely been gathering its forces for the next major offensive, this time in the well-trodden battlegrounds of continental Europe.

“The complaint, filed with the European Commission’s Directorate-General for Competition, alleges that through a series of carefully designed anti-competitive restrictions, Apple has not just harmed but completely eliminated competition in app distribution and payment processes,” says the Epic announcement.  “Apple uses its control of the iOS ecosystem to benefit itself while blocking competitors and its conduct is an abuse of a dominant position and in breach of EU competition law. The complaint complements legal processes already underway in both the US and Australia, as well as Epic’s recent filing before the UK’s Competition Appeal Tribunal.”

“What’s at stake here is the very future of mobile platforms.” Said Epic Games founder and CEO Tim Sweeney. “Consumers have the right to install apps from sources of their choosing and developers have the right to compete in a fair marketplace. We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field. It’s bad for consumers, who are paying inflated prices due to the complete lack of competition among stores and in-app payment processing. And it’s bad for developers, whose very livelihoods often hinge on Apple’s complete discretion as to who to allow on the iOS platform, and on which terms.”

You’d think this is right up the European Commission’s street, especially when you consider its humiliation by Apple in its bid to get the gadget giant to pay more tax. There’s nothing the EC likes more than hassling US tech giants on behalf of the bloc’s consumers and businesses and it’s hard to argue with the claim that Apple restricts access to its platform and thus distorts the market for mobile apps.

Apple seems to have offered only the most generic of initial responses, perhaps indicating that the seriousness of the situation precludes superficial grandstanding. Epic has some serious support for its complaint among the developer community too. Another initiative developed since last Summer is the Coalition for App Fairness, which seems to define itself in opposition to Apple and includes European giants such as Spotify and Proton.

Yet another front in this battle recently suffered a setback when a bill proposed in the US state of North Dakota failed to pass, but this issue seems unlikely to be resolved without the intervention of the highest courts. There can surely be no doubting the fact that Apple has monopolistic control over the iOS environment, but it has arrived at that point through fair competition. The historical solution to dilemmas such as this has been regulation, but that would need to be implemented on a global basis. Tricky.

One comment

  1. Avatar Keith Gould 18/02/2021 @ 7:48 am

    It’s not a tax – it’s fair reward for the significant effort that Apple puts into the running of the stores and and the provision of developer tool sets. These things have a cost and the revenue earned from the App stores is a return for Apple on that investment.

    The App stores (not just Apple) have gone a long way to helping smaller developers gain traction in a crowded market. The fees paid would no doubt have gone on direct marketing in an effort to reach customers. Instead users are presented with a well managed, consistent, trustworthy place to find, evaluate and purchase apps from developers they might never have encountered.

    Epic are crying crocodile tears. They have no interest in the smaller developer, they’ve just annoyed that all of the revenue doesn’t go to their bottom line.

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