Epic Games Files EU Antitrust Complaint Against Apple

[btarunr]

Epic Games today announced it has filed an antitrust complaint against Apple in the European Union (EU), expanding the company's fight to advance fairer digital platform practices for developers and consumers. 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. 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." Epic Games founder and CEO Tim Sweeney said today. "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."



Epic has faced and been harmed by Apple's anti-competitive restrictions across payments and app distribution. When Epic gave Fortnite players on iOS a choice between Apple payment and Epic direct payment, passing on savings to direct purchasers, Apple retaliated by blocking Fortnite updates. When Epic sought to bring the Epic Games Store to iOS, Apple declined. And while Apple has launched its own gaming distribution service, Apple Arcade, it has barred competitors including Epic from doing the same.

This is much bigger than Epic versus Apple - it goes to the heart of whether consumers and developers can do business together directly on mobile platforms or are forced to use monopoly channels against their wishes and interests. Epic has asked the Commission to address Apple's anti-competitive conduct by imposing timely and effective remedies. Epic is not seeking damages from Apple, as is the case in the US, Australia and the UK. It is simply seeking fair access and competition that will benefit consumers and developers.

Following complaints from other app developers, the European Commission is already investigating Apple's abusive conduct.

View at TechPowerUp Main Site

 

[Sunny and 75]

Epic versus Apple

So it begins.

 

[kapone32]

It will be interesting to watch this unfold. The space is really turning into a pool of whale sharks. Epic is like a tidal wave though as first Steam had to bend the knee and now Apple is getting their butt slapped too. It is not that Apple doesn't deserve it for their indignant and authoratative way of doing business.

 

[Chrispy_]

This is tiresome, and still old news from last August just being hammered again because Epic aren't making progress in their lawsuits.

The appstore rules are black and white.
Epic violated them, plain and simple.

Apple does not have a monopoly on mobile gaming ecosystems, and their rules for the app store are similar to many rules set by Nintendo for their consoles. If Epic want to tap Apple's ecosystem, they need to abide by the rules set up by the ecosystem owners. That tappable market of customers didn't just spring into existence for the benefit of Epic Games, it was crafted over two decades and billions of USD of investment and reinvestment. Just because Tim Sweeney doesn't want to pay for that doesn't mean he's legally entitled to a slice of it. Competition law grants him the freedom to make his own phones or consoles and entice customers to use them instead of Apple or Nintendo, should he choose to do so.

Tim sweeny is just a spoilt billionaire who thinks he's above the law because he's a multi-billionaire. Screw him, and in a more general sense, screw Epic board members for some very consumer-unfriendly moves in the last half decade. Apple may be the bad guys but that doesn't mean that everyone fighting Apple is doing it for philanthropic reasons.

 

[bug]

Consumers have the right to install apps from sources of their choosing and developers have the right to compete in a fair marketplace

I expect this will be the crux of the matter. With Android, you pretty much own the phone and you can do with it whatever you please*. With Apple, you don't really own anything Apple doesn't say you do. Eagerly awaiting to see what the courts have to say about this.

*You still need a Google account, of course.

 

[Vya Domus]

If Epic want to tap Apple's ecosystem, they need to abide by the rules set up by the ecosystem owners.

That's just not true, Apple's rules can still infringe upon legal restrictions. You can't just come up with any sort of rule and claim that people just have to accept them if they want to use your platform.

Apple does have a monopoly on mobile software distribution, most developers target iOS first and then usually software is ported to Android sometimes with missing features or is just simply of lower quality/support.

 

[bug]

Apple does have a monopoly on mobile software distribution, most developers target iOS first and then usually software is ported to Android sometimes with missing features or is just simply of lower quality/support.

Don't worry, because of Apple's restrictions, it happens the other way around just the same. I.e. you can't always port all the features to iOS.

 

[Chrispy_]

That's just not true, Apple's rules can still infringe upon legal restrictions. You can't just come up with any sort of rule and claim that people just have to accept them if they want to use your platform.

Apple does have a monopoly on mobile software distribution, most developers target iOS first and then usually software is ported to Android sometimes with missing features or is just simply of lower quality/support.

I don't think you understand what a monopoly is, especially in legal terms. You're confusing monopoly and market leadership.

Apple's ecosystem rules are contractual agreements between Apple and the app developers. Contractual agreements are the very definition of unrestricted legality; The agreement between them is, assuming general laws are not breached, legal only insfar as what it explicitly definied in the agreement. If either party breaches those terms, the agreement is nullified and the interaction ceases, legally, unless a new modified contract is agreed upon by both parties.

You're insinuating that Apple's rules infringe on general trade/commerce law, which would be the hope that Epic are aiming for but as demonstrated in all of the lawsuit progress so far, they cannot make that stick - because (unsurprisingly) Apple could afford decent lawyers to draft their contracts in the first place that do not breach such laws.

The only thing Epic may achieve from all of this (at their own expense) is changing software distribution laws in general enough to require Apple to change the terms of their ecosystem. At present, Apple are not in the wrong and any future changes will not be applied backwards to historical disagreements between parties; That's simply not how the rule of law works in the EU or the US. Let's assume that Epic do win this particular angle - Apple will not just roll over and let third parties take Apple's cut, no - they'll simply re-term the agreements to be more specific and it'll likely end up making no difference whatsoever to the bottom line of any app developer whilst simultaneously creating a lot of new admin work for every app developer making an iOS app.

It is Apple's system. They are the IP holders, they make the rules, and every app developer on iOS is invited, not mandated, to use Apple's ecosystem and its terms. If Apple was the only ecosystem, or the dominant ecosystem with anticompetitive exclusion rules against other ecosystems, then they would be targettable under anti-competitive and monopoly law. They are clearly neither the only ecosystem nor the dominant one, so it's a moot point.

Once more, it's Sweeney being greedy and throwing a billionaire's tantrum. Nobody likes Valve/Google/Apple/Facebook/Microsoft/Nintendo/Sony's cuts when using their platform but use of those platforms is not mandatory and the cut of profits are some of the most clearly-defined and transparent fees you're ever likely to see. As a trade contract those terms are legally watertight.

 

[jrocket]

Apple is incredibly developer unfriendly. I hope they lose. You can't even make software for OSX without paying Apple nowadays. Could you image if Microsoft pulled this off?

 

[Chrispy_]

Apple is incredibly developer unfriendly. I hope they lose. You can't even make software for OSX without paying Apple nowadays. Could you image if Microsoft pulled this off?

I hope OSX dies off for this exact reason. Apple are a terrible company in so many ways - their exploitation of developers is only a tiny fraction of what's wrong with Apple.

However, as much as I dislike Apple, my limited understanding of international law makes me think that even if Epic win any points again Apple whatsoever, it won't change much at all, it'll simply force apple to reword their terms.

The reason Apple's defense is so strong here is because their terms are so transparent and simple. Apple are breaking no laws and you'd need to be an actual idiot to try and make a case based on obfuscation of terms. As far as trade laws go, that's as iron-clad and watertight as they come.

What this might do is trigger independent investigations by various commissions/regulators into the wider aspect of cuts for ecosystem creator/owners. If that has any consumer/developer-friendly outcome then that is the only route likely to work and it will be a long time coming because such cases are large and slow to process. That is what you should hope for, and that may be Tim Sweeney's long-term goal in making all of this frivolous, pointless series of failing lawsuits about Fortnight's removal from the iOS appstore.

 

[reksveks]

At present, Apple are not in the wrong and any future changes will not be applied backwards to historical disagreements between parties; That's simply not how the rule of law works in the EU or the US. Let's assume that Epic do win this particular angle - Apple will not just roll over and let third parties take Apple's cut, no - they'll simply re-term the agreements to be more specific and it'll likely end up making no difference whatsoever to the bottom line of any app developer whilst simultaneously creating a lot of new admin work for every app developer making an iOS app.

Epic aren't really arguing that Apple doesn't have the right to do what they are doing now under current law and regulations, they are arguing that these current set of laws and regulations doesn't lead to outcomes where the consumer isn't harmed by large companies. The EU could very easily force Apple to ensure that their phones have a browser ballot option on new versions of their phones if Apple wants to sell it within the EU, we saw that for Microsoft and saw Google proactively try and get ahead of that in the EU. I also can see the argument that a Duopoly isn't much better than an Monopoly especially since Google also has some very questionable contracts.

All of the fuss caused by the likes of Telegram, Spotify and Epic (less so) has resulted in some small shifts in Apple's policies in my opinion, you can now set Spotify as Siri's default music service.

I wonder if Apple/Google are forced to spin out their services so they can't be preferentially favoured by the OS. I am okay with that honestly.

 

[Chrispy_]

Epic aren't really arguing that Apple doesn't have the right to do what they are doing now under current law and regulations, they are arguing that these current set of laws and regulations doesn't lead to outcomes where the consumer isn't harmed by large companies. The EU could very easily force Apple to ensure that their phones have a browser ballot option on new versions of their phones if Apple wants to sell it within the EU, we saw that for Microsoft and saw Google proactively try and get ahead of that in the EU. I also can see the argument that a Duopoly isn't much better than an Monopoly especially since Google also has some very questionable contracts.

All of the fuss caused by the likes of Telegram, Spotify and Epic (less so) has resulted in some small shifts in Apple's policies in my opinion, you can now set Spotify as Siri's default music service.

I wonder if Apple/Google are forced to spin out their services so they can't be preferentially favoured by the OS. I am okay with that honestly.

That would be the preferred outcome for everyone I think. This is slowly the direction that Sweeney's case is mutating into, but it's not the case he started with and he's still not barking up the right trees to get the desirable result by targeting a level playing field. For a start, paying developers to have timed exclusives on the EGS is 100% not "a level playing field" - so firing off lawsuits from a position of hypocracy is not a good starting point.

Chances are good Sweeny's just banging the drum at this point because it's good marketing to make noise.

 

[Vya Domus]

You're insinuating that Apple's rules infringe on general trade/commerce law

I am not insinuating anything, just pointing out the fact that no, they can't make up arbitrary rules that people have to follow in order to use their platform.

The rules that they make have to be within the law.

 

[Chrispy_]

I am not insinuating anything, just pointing out the fact that no, they can't make up arbitrary rules that people have to follow in order to use their platform.

The rules that they make have to be within the law.

And I pointed out that yes, they can make up arbitrary rules that people have to follow in order to use their platform.

You don't seem to understand the basic premise that it is a CLOSED, PROPRIETARY, PRIVATELY-OWNED platform.

As long as the rules are within the law, then the whole thing is a simple contractual agreement. I think that's the one point you do agree with. I agree that the present rules are unfavourable for consumers and developers alike, but that doesn't mean they're illegal, which seems to be what you're suggesting?

 

[Vya Domus]

I don't know what you understand by "arbitrary" but here is the definition found in a dictionary :

"based on random choice or personal whim, rather than any reason or system."

In other words rules imposed by companies are clearly not arbitrary since they have to function within the boundaries of the legal system.

 

[Anvirol]

This is tiresome, and still old news from last August just being hammered again because Epic aren't making progress in their lawsuits.

The appstore rules are black and white.
Epic violated them, plain and simple.

Apple does not have a monopoly on mobile gaming ecosystems, and their rules for the app store are similar to many rules set by Nintendo for their consoles. If Epic want to tap Apple's ecosystem, they need to abide by the rules set up by the ecosystem owners. That tappable market of customers didn't just spring into existence for the benefit of Epic Games, it was crafted over two decades and billions of USD of investment and reinvestment. Just because Tim Sweeney doesn't want to pay for that doesn't mean he's legally entitled to a slice of it. Competition law grants him the freedom to make his own phones or consoles and entice customers to use them instead of Apple or Nintendo, should he choose to do so.

Tim sweeny is just a spoilt billionaire who thinks he's above the law because he's a multi-billionaire. Screw him, and in a more general sense, screw Epic board members for some very consumer-unfriendly moves in the last half decade. Apple may be the bad guys but that doesn't mean that everyone fighting Apple is doing it for philanthropic reasons.

I disagree completely. Microsoft was forced to implement browser choice menu over 10 years ago in Windows operating systems and equivalent solution is definitely needed for AppStore solutions.
Even back then we could use IE to download other browser, but easy user choice was needed to bring competition back.

Now we have Apple and Google with completely locked Store practices.
Even if you can download a launcher app or competing store app from their store, these 2 companies take 30% cut of every purchase (even in-app) purchase. Smaller companies can struggle, but Apple and Google will always be the winners if this keeps going.

When using Apple Setup Assistant on your new device or Android Phone setup, it should offer several marketplace apps to be installed or such marketplaces should be available for install in App / PlayStore. Those should be exempt from 30% fees.

I suspect that EU will start doing something about this. Browser monopoly wasn't this bad, but EU still took action.

 

[SRB151]

Yeah, I can see it now if Apple gets this to stick....Imagine, other companies taking up Apple's stance. If I buy a Nespresso or some such thing that requires continuing purchases to operate, I have to purchase the pods from the original retailer, not the company, not the third party. Buy an alarm from Best Buy? The payments for the monitoring have to go through them, even though they're provided by someone else. All recurring revenue for anything is attached to the retailer, not the manufacture or service provider. How long before Apple decides updates and bug fixes should be paid for? After all, the spelled it out that you have to and you agreed when you bought the device. If you don't shell out for the updates, your device will fail to work. Software as a service is one thing, but software as a service by retailers who don't do anything but provide the sale is a whole new thing.
Believe it or not, not every software license or agreement is legal, so it will be interesting to see where this shakes out.

 

[Chrispy_]

I don't know what you understand by "arbitrary" but here is the definition found in a dictionary :

"based on random choice or personal whim, rather than any reason or system."

In other words rules imposed by companies are clearly not arbitrary since they have to function within the boundaries of the legal system.

Arbitrary in this context obviously implies "within the bounds of the legal system". It shouldn't even be necessary to explicitly state something so obvious and if you are even entertaining the possibility that Apple didn't run everything past a large team of very expensive lawyers before going live with things, then you are more naiive than my lowest expectations.

 

[SRB151]

Arbitrary in this context obviously implies "within the bounds of the legal system". It shouldn't even be necessary to explicitly state something so obvious and if you are even entertaining the possibility that Apple didn't run everything past a large team of very expensive lawyers before going live with things, then you are more naiive than my lowest expectations.

Keep in mind, legal is in the eye of the beholder (judge). In addition, a great many contracts are illegal and enforced, since the only way to prove something is illegal is to challenge it in court. Until it is challenged, is doesn't matter if it's legal or not, it's considered so. On another point, your kidding when you say since Apple must have had their lawyers approve it, it must be legal??? In case you haven't been following the news, armies of lawyers line up between one side of an argument, with an equal number on the other. All of them right. They DON'T always have it right on either side...that's why we have courts.

 

[Chrispy_]

I disagree completely. Microsoft was forced to implement browser choice menu over 10 years ago in Windows operating systems and equivalent solution is definitely needed for AppStore solutions.
Even back then we could use IE to download other browser, but easy user choice was needed to bring competition back.

Now we have Apple and Google with completely locked Store practices.
Even if you can download a launcher app or competing store app from their store, these 2 companies take 30% cut of every purchase (even in-app) purchase. Smaller companies can struggle, but Apple and Google will always be the winners if this keeps going.

When using Apple Setup Assistant on your new device or Android Phone setup, it should offer several marketplace apps to be installed or such marketplaces should be available for install in App / PlayStore. Those should be exempt from 30% fees.

I suspect that EU will start doing something about this. Browser monopoly wasn't this bad, but EU still took action.

The browser choice thing wasn't quite the same though. Microsoft did have an actual monopoly, and was manipulating that position in an anticompetitive way.

Apple and Google are a bit different. Apple doesn't have a monopoly and their system is not an open system in the first place - it's subject to different regulation that an open system like Android is. Google don't enforce the play store and there are millions of Android handsets out there running apps that were obtained from outside the Play store. Plenty of Asian brands and Asia-only phones are completely devoid of almost all Google integration entirely.

Like everyone arguing here, we're all unanimously against the greedy practices of big companies like Apple/Google/Microsoft/Valve etc, but the there's a lot of confusion over what we're arguing about here; What would be better for a free market and what is currently legal are not the same thing. Yes, legislation needs to change to make the closed ecosystems more open, but you can bet that the companies who put the effort into building and reinvesting in those ecosystems will fight in the courts to get their returns and no fair court is going to deny that the existence of those ecosystems are almost 100% because of the financial investment of those original, controlling/owning companies.

If the end result of all of this is that software distribution ecosystems are opened up to a variety of competitors, then what we'll see is huge market fragmentation followed by a number of key players in each market who will inevitably just find other ways to reclaim their fees. In the case of Apple, what I expcet we'll have is a bunch of non-apple stores that "work" but don't have any integration with a much of the Apple ecosystem stuff because Apple aren't going to open up their source code to third-parties just for the sake of consumer convenience - they'll leverage their own vertical integration to make using the non-Apple stores as painful as legally possible and entice developers and consumers alike to pay extra for the convenience and ease - And that's convenience and ease that Apple have invested billions of dollars building and improving, not a free feature that competitors should just be handed on a plate for free by some commission or industry regulator.

 

[bug]

I don't think you understand what a monopoly is, especially in legal terms. You're confusing monopoly and market leadership.

Apple's ecosystem rules are contractual agreements between Apple and the app developers. Contractual agreements are the very definition of unrestricted legality; The agreement between them is, assuming general laws are not breached, legal only insfar as what it explicitly definied in the agreement. If either party breaches those terms, the agreement is nullified and the interaction ceases, legally, unless a new modified contract is agreed upon by both parties.

You're insinuating that Apple's rules infringe on general trade/commerce law, which would be the hope that Epic are aiming for but as demonstrated in all of the lawsuit progress so far, they cannot make that stick - because (unsurprisingly) Apple could afford decent lawyers to draft their contracts in the first place that do not breach such laws.

The only thing Epic may achieve from all of this (at their own expense) is changing software distribution laws in general enough to require Apple to change the terms of their ecosystem. At present, Apple are not in the wrong and any future changes will not be applied backwards to historical disagreements between parties; That's simply not how the rule of law works in the EU or the US. Let's assume that Epic do win this particular angle - Apple will not just roll over and let third parties take Apple's cut, no - they'll simply re-term the agreements to be more specific and it'll likely end up making no difference whatsoever to the bottom line of any app developer whilst simultaneously creating a lot of new admin work for every app developer making an iOS app.

It is Apple's system. They are the IP holders, they make the rules, and every app developer on iOS is invited, not mandated, to use Apple's ecosystem and its terms. If Apple was the only ecosystem, or the dominant ecosystem with anticompetitive exclusion rules against other ecosystems, then they would be targettable under anti-competitive and monopoly law. They are clearly neither the only ecosystem nor the dominant one, so it's a moot point.

Once more, it's Sweeney being greedy and throwing a billionaire's tantrum. Nobody likes Valve/Google/Apple/Facebook/Microsoft/Nintendo/Sony's cuts when using their platform but use of those platforms is not mandatory and the cut of profits are some of the most clearly-defined and transparent fees you're ever likely to see. As a trade contract those terms are legally watertight.

That's Apple's point of view.
Mine is Apple doesn't get to dictate what I run on iOS any more than Microsoft gets to dictate what I install on my local Windows machine.

 

[Chrispy_]

Keep in mind, legal is in the eye of the beholder (judge). In addition, a great many contracts are illegal and enforced, since the only way to prove something is illegal is to challenge it in court. Until it is challenged, is doesn't matter if it's legal or not, it's considered so. On another point, your kidding when you say since Apple must have had their lawyers approve it, it must be legal??? In case you haven't been following the news, armies of lawyers line up between one side of an argument, with an equal number on the other. All of them right. They DON'T always have it right on either side...that's why we have courts.

It has been challenged continuously and all atempts to prove it illegal thus far have failed.

There are two sides to any legal battle and on one side you have Tim Sweeney saying that Apple's cut is too much, and on the other side you have Apple saying that they're providing a market of customers and various supporting services to Sweeney for a flat fee of 30%.

Yes, it's a steep fee, but the Apple ecosystem isn't ever going to be free to use for competitors because Apple are constantly investing into it simply to keep it operating and to compete with other ecosystems entirely. In order for it to be opened up "free" like Sweeney wants, Apple would be required to spin off the software-distribution ecosystem into a seperate company and then charge Apple and its competitors equally. My guess is that if such a thing happened, the new distribution company would likely charge exactly the same (if not more, out of spite) than Apple currently does. All legal, all abiding by the best-case, long-term potential outcome of these lawsuits. A whole bunch of lawyers getting paid for no significant outcome.

That's Apple's point of view.
Mine is Apple doesn't get to dictate what I run on iOS any more than Microsoft gets to dictate what I install on my local Windows machine.

Welcome to jailbreaking and sideloading, AKA PCMR

 

[SRB151]

It has been challenged continuously and all atempts to prove it illegal thus far have failed.

There are two sides to any legal battle and on one side you have Tim Sweeney saying that Apple's cut is too much, and on the other side you have Apple saying that they're providing a market of customers and various supporting services to Sweeney for a flat fee of 30%.

Yes, it's a steep fee, but the Apple ecosystem isn't ever going to be free to use for competitors because Apple are constantly investing into it simply to keep it operating and to compete with other ecosystems entirely. In order for it to be opened up "free" like Sweeney wants, Apple would be required to spin off the software-distribution ecosystem into a seperate company and then charge Apple and its competitors equally. My guess is that if such a thing happened, the new distribution company would likely charge exactly the same (if not more, out of spite) than Apple currently does. All legal, all abiding by the best-case, long-term potential outcome of these lawsuits. A whole bunch of lawyers getting paid for no significant outcome.


Welcome to jailbreaking and sideloading, AKA PCMR

There's a difference between complaining, pulling or not pulling your apps, and Apple taking action in their ecosystem. Yes, it's been argued to death in various places, but to my knowledge, this is the first, honest to goodness solid legal challenge presented to Apple that's not going to just go away under the table or settled. Unless you can provide the documentation of a specific court judgement in their favor that is strong enough for precedent.

 

[Renald]

I am not insinuating anything, just pointing out the fact that no, they can't make up arbitrary rules that people have to follow in order to use their platform.

The rules that they make have to be within the law.

You're not pointing any fact. You're just taking position.

I don't have an Iphone, so I don't follow Apple rules. That's it. You use a platform, you respect the terms. You don't want it, you build/chose your own. You're not force to have a phone at all, nor a computer.
It's like the case for nearly every software / platform that exists.

Monopoly are quite few nowadays, and they are mainly on high-level products. Intel had a monopoly, not anymore.
After seeing a dozen of people telling you what a monopoly isn't, I hope you'll understand that Epic request is total non-sense.

 

[Vya Domus]

Looks like the lack of comprehension is quite rampant today.

If you want to have arbitrary rules go on the moon because only there platforms can be unregulated.