Why Apple Banned Fortnite: Fortnite was booted out of the App Store by Apple, a $2 trillion corporation that has not only refused to consider altering its profitable business strategy, but has also refused to consider changing its business plan altogether. Apple reportedly wanted to deny Epic access to its developer tools programme, which would have had a negative impact on any applications that made use of Epic’s Unreal Engine technology. While a judge approved Epic’s request for a temporary restraining order, which stopped Apple from doing so until a hearing next month, the ruling did not compel Apple to return Fortnite to the App Store, as was expected.
As a result, the game continues to be prohibited, preventing iOS and macOS users from updating their applications to the recently released Season 4. In addition, that means players can only play against other Apple users who are still trapped in Season 3, while the rest of the Fortnite community is transitioning to the next season. Apple, on the other hand, has said that Fortnite will be permitted to re-enter the App Store if and when it adheres to the store’s rules and regulations.
In an article by Recode’s Peter Kafka, he stated that applications for Apple mobile devices must be purchased via the company’s App Store, which charges a 30 percent commission for app sales as well as any transactions made inside the app’s own interface. Fortnite, which is a “freemium” game, earns all of its money via in-app purchases of its virtual currency, and Apple receives a portion of that revenue. The effort by Epic to circumvent this by providing consumers with the option of buying Fortnite money directly from Epic at a discount resulted in Fortnite being booted off of the Apple App Store for breaching the company’s rules of service. Epic reacted with a lawsuit, joining an ever-growing chorus of developers and lawmakers who have accused Apple’s App Store of monopolistic tactics, given the company’s complete control over the applications that are made available for use on its products. And now Apple is retaliating with a class-action lawsuit of its own.
A European butterfly swarm begins with caterpillars 4,000 miles away, in the United States.
At a hearing set for September 28, a court will determine whether or not Epic will be granted a preliminary injunction, which would compel Apple to re-release Fortnite on its App Store. And this is very certainly just the beginning of a long and drawn-out court fight. The result of all of this may have a major impact on the app ecosystem that Apple helped to build, perhaps to the advantage of both developers and users. At the moment, though, everyone is on the losing end.
Apple and app developers may benefit from the App Store in a mutually beneficial relationship.
When the App Store was first introduced on iPhones in 2008, it was positioned as a win-win situation. Developers would have easy access to Apple customers, as well as tools to build and sell the applications they created — all of which was particularly beneficial for small developers who otherwise had the means to do so. Apple also announced a new developer programme in January. For its part, Apple would get a constantly growing roster of applications to offer its customers, as well as a continuous source of revenue from commissions it would deduct from the purchase price of premium apps and the proceeds of in-app purchases. This idea has, for the most part, been a success. Apple claims that the App Store now contains millions of applications and that it earned more than $500 billion in revenue in 2019. Apple claims that the majority of this revenue was not subject to the 30 percent commission it receives from in-app purchases and premium apps.
Because Apple’s App Store is the only place where customers can get applications for their iOS devices, the company has been allowed to establish whatever regulations it wants and charge whatever pricing it wants for any apps purchased via the App Store. Developers of mobile applications must, as a result, accept these terms or risk losing access to hundreds of millions of prospective consumers. Developers have been voicing their dissatisfaction with this for years, but they have had no recourse. As Epic just discovered, if you violate the rules, you will be banished from the game.
The developers’ community has also accused Apple of utilising inside information about which applications are successful to influence its own choices about which native apps to create. Several of those Apple-developed applications are preinstalled on iOS devices and cannot be uninstalled, and they are pushed out to consumers in a manner that third-party alternatives are not. Apple also grants its native applications access to some functionalities, such as Siri, that are not available to third-party apps, despite the fact that the firm has lately taken steps to give third-party apps access to these functions. These grievances, which have been simmering for years, are finally coming to the fore as a number of big developers demonstrate their dissatisfaction with the apparent monopoly.
What are the Developers Doing in Order to Oppose Apple?
Epic Games is far from the first business to express dissatisfaction with the App Store. Spotify has been very outspoken about this. It was in March 2019 that Spotify, a Swedish music streaming company, filed an antitrust complaint with the European Commission, claiming that it had been compelled to raise its subscription prices in order to make up for the cost of Apple’s charge. (Subscription services such as Spotify are subject to a 30 percent fee for the first year, after which the commission is reduced to 15 percent. Spotify has also alleged that Apple created its own competitor streaming music service, Apple Music, as a result of the popularity of the company’s platform on which it operates.
Due to a complaint filed by Spotify, the European Commission stated in June 2020 that it was conducting an investigation into Apple’s antitrust breaches. If Apple is found to have broken the European Commission’s antitrust laws, the repercussions for the business may be severe: a punishment of up to 10 percent of the company’s annual sales could be levied against it.
In the United States, there have also been legal problems to contend with. In June 2019, only a few months after Spotify filed its complaint, a group of American developers filed a lawsuit against Apple, claiming that the company’s regulations and the absence of an alternative app store gave it an unfair monopoly and caused prices to rise. This follows the Supreme Court’s approval of a class-action case filed by iPhone owners alleging Apple’s App Store of breaching antitrust rules, which was filed in May of this year. The business may be on the line for a large sum of money if the case is lost or if it chooses to settle, which would result in millions of dollars being paid out to App Store consumers. Apple may potentially opt to alter its App Store rules in order to prevent further litigation and payments.
Epic, on the other hand, has long been a vocal opponent of app store commissions in general. Even if the business has refused to sell Fortnite on Google’s Play store until April 2020, Android users may still be able to get the game due to the fact that the operating system does not need users to obtain programmes via Google’s Play store. This was not feasible for its Apple clients, despite the fact that Fortnite has been available in the App Store since 2018. In fact, according to the Wall Street Journal, the game has been downloaded on more than 130 million Apple devices and has produced $1.2 billion in App Store spending, which is a nice amount for Epic and Apple, but not nearly enough to cover the costs of the lawsuit.
Epic Games essentially challenged Apple and Google to remove Fortnite from their respective app stores on August 13 by providing players with the opportunity to buy virtual money from Epic inside the game, which violated the terms of service of both companies. Fortnite was banned by both businesses as a result of their responses. Epic reacted by filing lawsuits against both businesses. As part of its social media campaign, it has released a humorous video and encouraged players to use the hashtag #FreeFortnite on their social media accounts.
Other Social Media platforms on this issue
Facebook, which is dealing with its own antitrust problems, has joined on the bandwagon in the wake of the Epic lawsuit, alleging that the Apple tax would hurt the pages and companies who are using Facebook’s new sponsored events tool. Since Facebook is suspending its own commission on the new feature for a year and distributing all paid event profits to the pages that host them, Facebook is appealing to Apple to temporarily forgo its fee as well, as reported by CNBC. Because the social media behemoth presented this as a method to assist companies who were suffering during the Covid-19 epidemic, Apple’s reluctance to waive the charge may be seen as being detrimental to such firms.
The benefit of using the App Store
Apple says that the 30 percent App Store fee helps to offset the expenses associated with hosting the applications on its servers. Peace of mind comes from the fact that forcing customers to download applications directly from the App Store helps the business verify that they fulfill certain criteria and are safe — which is particularly essential when it comes to things like credit card data.
What do Apple Claims against Fortnite?
The roots of the 30 percent cut may be traced back to the cut that Apple collected from iTunes purchases — which varied between 30 and 40% each tune. In 2007, when the App Store was first launched, Apple’s then-CEO Steve Jobs said that the 30 percent commission was necessary to “pay for operating the store,” and that the company did not “plan to earn any money” from it. Even while this may have been accurate in 2008, when the App Store was established with just a few hundred applications, Apple today earns billions of dollars in commissions from the App Store every year.
Apple also claims that the overwhelming majority of App Store applications are free, implying that the vast majority of apps profit from the App Store ecosystem while providing Apple with no compensation in exchange. Free applications often earn money via advertisements and the sale of user data to other parties, both of which Apple does not profit from. A recent research commissioned by Apple revealed that the company’s commission is on level with the rest of the industry, which was welcomed by the company. However, this overlooks the reality that Apple was the one who started the business in the first place, and that other app shops followed Apple’s example when it came to establishing their own commissions.
What will the customers do Now?
So, what does all of this imply for you, as a client of the Apple App Store? For the time being, it prevents you from downloading Fortnite or, if you already have it, from downloading updates – which means you can’t play the upcoming Season 4 of the game. Season 3 will continue to be available, however, your opponents will be restricted to other Apple players only. All non-iOS devices running the latest version of the software will be promoted to Season 4, and inter-season fights are no longer an option. It will have an impact on players who use other platforms as well since they will be unable to play their pals who use Apple devices. The length of time this will continue will be determined by whether the business blinks first and concedes to the other’s demands — or which company wins if the dispute goes on long enough to reach the judicial level.
Additionally, Apple customers may be paying inflated rates for premium applications and in-app purchases, which may have been adjusted in order for developers to cover for the 30 percent commission charged by Fortnite. It is possible that you have taken the additional step of paying for app subscriptions via developers’ websites rather than through the applications themselves since some companies have chosen to completely abandon in-app sales in order to avoid paying Apple a fee.