Apple removes Fortnite from App Store after Epic attempts to bypass fees | Hacker News Reader

Apple removes Fortnite from App Store after Epic attempts to bypass fees

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595 pointsxoxoy489 comments

Discussion of Apple topics here on HN almost always gets reduced to the argument that Apple is not a monopoly, so what they are doing is OK. I want to present an alternative viewpoint. It's not a monopoly issue, it is an anti-competitive issue.

In Canada, we have three major cell carriers. None of them has a monopoly, or anything close to it. None of them has even 50% market share.

You can have a 10 GB smartphone plan with Rogers for $75. If you don't like that, you can switch to Bell's 10 GB plan for $75. If you don't like Bell, of course you can switch to Telus's 10 GB plan for, wait for it, $75.

The Big 3 operate smaller brands with fewer bells and whistles and lower costs. You can get a 4 GB cell plan from Koodo (Telus subsidiary) for $50, or from Fido (Rogers subsidiary) for $50, or from Virgin Mobile (Bell subsidiary) for $50.

Sometimes one of them has promotional pricing, like $45 instead of $50 for 4GB. The other two offer the same pricing for the same duration. Sometimes one of them increases their prices by $5 a month citing reasons such as infrastructure investments, lower Canadian dollar value, or inflation. The other two increase their prices by the same amount a couple of days later.

And none of this is collusion in the legal sense. They don't gather in smoke-filled rooms and decide how to screw over their customers. There is not back-channel communication whatsoever. And it is not because the competition is so perfect the prices have been commoditized. In fact, Canada has some of the highest cell plan prices in the world, even adjusting for factors such as population density and GDP.

It's just that the big companies have decided to stop competing. If you live in, say Alberta or Ontario or BC, you have three options and they are all the same overpriced crap. Cell carriers in Canada are not a monopoly, but you don't have to be a monopoly to harm customers with anti-competitive behaviour. Apple and Google, Android and iOS do not have a monopoly or a collusion agreement. But they are harming the customers all the same.

I think this is called tacit collusion.

You see something like this with gasoline pricing - major brands will have "competing" stations across the street from each other, but their prices moves in lock step without a race to the bottom.

Memory vendors have explicitly colluded in the past, but they really didn't need to - they just needed to copy their competitors' posted pricing. Presumably that is what they do now.

If there are high barriers to new competitors entering the market, then the situation is unlikely to change.

Actually, that’s not correct about gas stations.

Having worked at one, we would check the prices of the two others on the same road once every hour. These numbers were reported into HQ, and a price adjustment would be made to be lower.

It’s very competitive and people are willing to drive or wait until a different time of day to get a lower price.

EDIT: Maybe I should have said: that’s at least not the case everywhere.

The question is, would you also adjust the price when the others increased their prices?

If a store knows that the other store will raise their price in response, they can collude without an explicit agreement.

Some states in the United States limit the number of times a week a gas station can change their prices.

This isn't practical without an electronic sign.

Indeed price signaling [1] is a real thing when it comes to anti-competitive behavior among dominant market players - and government economists love analyzing these types of problems for antitrust cases, as they can be like solving forensic puzzles. [2]

[1] https://en.wikipedia.org/wiki/Price_signal#:~:text=A%20price....

[2] https://www.thesoulofenterprise.com/tsoe/antitrust

I don't think so; the situation of copying the posted price can easily trigger a price war. It is not stable, unless someone is designated as the price master, and the others are slaves. That's the only thing which can explain that the prices can go wildly up and down, yet in lock step.

Everyone acting in complete independence, simply copying everyone else, cannot lead to stability, let alone the durable, persistent lock-step stability that is seen.

I believe the correct term is Cartel and is just as illegal as monopoly just harder to prove.

A cartel, by my understanding, would require the act of collusion to take place.

The issue in the telecoms market, at least IMO, is the high entry price (spectrum access sometimes meaning there is no option aside from buying an existing operator), combined with scale of the operators (usually large and national-level) meaning there is little entrepreneurial spirit to drive costs down.

It can cost a large company 100x what it would cost a small company to do the same work, and that becomes a price everyone ends up paying for. But absent knocking down barriers to entry, it's a very hard market for a new entrant to get into, unless you are happy to just sell to the existing incumbents as clients.

> You tend to see it with gasoline pricing as well - all the major companies have nearly identical prices.

Yeah because otherwise you make no money on gas. If I undercut the store across the street by a penny, they will then immediately match me or undercut by a penny. Pretty soon, we are at the break-even point and can't go lower without losing money. That's not tacit collusion, that's just a race to the bottom.

There's a big difference between all major app stores taking 30% every time money changes hands, and a race-to-the-bottom industry like milk or gasoline. Try starting a dairy farm - I think you'll find you won't be able to price your milk lower than your competition, and as a result your milk will be the same price everyone else's has been for the past 50 years - ~$2-3/gallon.

I think I have a better analogy: Apple operates a market with a significant portion of economic activity in several industries / verticals, yet it sets its own rules and even is party to transactions. That's basically the definition of a black market.

Black markets are useful in some circumstances, but when they grow too big they have to be regulated and taxed. A lot.

Good for Epic.

You have changed the definition of "black markets" to something else.

A black market requires illegality. You are conflating "rules" of contracts and "rules" of law.

I agree that Apple "even is party to transactions". I think that's the common problem with Google (eg. Froogle / Google Shopping), Amazon (eg. Amazon Basics), and Apple (apps that compete and undercut 3rd party apps or which don't have to adhere to the same App Store contract clauses).

Elizabeth Warren discussed this frequently.

> Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival. But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition.

[1] https://www.warren.senate.gov/files/documents/2016-6-29_Warr...

Hm, fair point: the App Store isn't illegal, so "black market" is pushing the term too far. However, the laws in the App Store aren't controlled by a political/state entity: they are imposed by Apple themselves. The fact that they are legal under US law, doesn't make them legitimate: democratic control (via regulation) does.

So I guess my point was this: past a certain size / power concentration a market/platform has to have regulations that are answerable to a democratic/political authority, not to a private party. That's regulation, isn't?

"Grey market" is taken, so how about "brown market"? :)

Man. Warren would have been the perfect VP pick.

Bloomberg/Warren 2020!

Doesn’t that make Amazon and the supermarket down the street black markets, too?

The supermarket is very tightly regulated, so not at all... Amazon though... :)

Except for it to be a black market illegality needs to be established and it isn't clandestine - the rules are freely available and there are other markets (android) available for apps.

This is a poor analogy.

I am still waiting for a real argument on HN as to what Apple is doing that is anti-competitive or illegal. Still have not found one.

Apple and Google are both charging 30% fees and together, they own almost the entire smartphone market. It is harming consumers due to the higher costs this 30% is imposing on transactions. Whether it is illegal or not is up to the court to decide. But as a customer, I would like to complain about this and state my dissatisfaction. Perhaps if enough people do it, they will change their behaviour.

Also as a voter, I would hope that the legislature make these costs come down. In Canada, the government recently intervened to reduce credit card processing fees. I would hope next they direct their attention to app store fees.

https://globalnews.ca/news/4379884/canada-credit-card-fee-cu...

They are extracting rent from a market that's now too big and powerful and are enforcing rules that do not have political (as in citizens') legitimacy.

They have obviously won their market position fair-and-square and their rules aren't illegal. But extracting taxes ('rent' in economist-speak) from other companies just because they were successful at some point in the past is uncompetitive behavior now.

Same goes for Amazon/Google: extracting rent from a market-dominant position should be illegal (it isn't) regardless of how that position was won.

> I am still waiting for a real argument on HN as to what Apple is doing that is anti-competitive or illegal.

Apple and Google are engaging in obvious tacit collusion. QED.

It's a regulation issue. Things were similar in my country until the state decided to sell the fourth frequency range licence at a reduced cost (to offset the lead of the other three) and made routing cheaper. In exchange the new provider had to commit infrastructure investments. At about the same time, it was legally mandated that transferring phone numbers between providers be simple and cheap. The prices cratered pretty much instantly.

I think I'm on a 15€/100GB plan at the moment (plus a bunch a stuff like 25GB a month of international roaming).

There is a fourth carrier with Freedom Mobile but the population density makes it so hard for them to truly compete.

It's an argument that comes back often when talking about telco and it does make sense on the surface, but as far as I'm aware most the Canadian population lives in a pretty narrow range of the country's territory. There needs to be some compensation going into the dense areas paying for the infrastructure of the near-empty ones to a degree, but I have a hard time believing it justifies that level of pricing.

Just look at the prices in Australia or Russia. There's no good technical reason Canada should just be massively more expensive than the rest.

> reduced to the argument that Apple is not a monopoly, so what they are doing is OK.

Wait, how can what Apple does ever be okay even they legally don't have a monopoly.

Apple provides a marketplace (which they name store, but it's a marked place not a store) which is the only way to install software (on their phone) for millions of persons which means it's a marked and not just a marked place and they do both run the marked and provide products there but give their products an unfair competitive advantage (access to internal APIs, fast review, not applying app guidlines, subvention developent for the apps etc.) while haven basically rip-of pricing for (at least part of) the competition and intentionally preventing many business model and undermining how companies can freely present their products and company to users inside of their own products...

Not sure how anyone can call it ok, tbh.

Maybe legal due to a laws not yet having arrived in the 21st century but definitively not ok.

I think the terminology you're using ("be okay") is so vague it doesn't mean anything here. You seem to be arguing your own personal value set without telling the rest of us what your values are or what ethical framework you are arguing in.

The only thing I can infer from this comment is that you aren't arguing within a legal framework (although I suspect you might be wrong because "unfair competitive advantage" is something that can be enforced under US and EU law).

I'm not a lawyer, anti trust law and monopoly law a rather complex and subtle things.

Especially if we consider the difference between the intend behind a law and it's current legal interpretations.

Because of this I try to avoid arguing using the actual laws.

I also believe many of this laws need some degree of adaption to the modern world. Sometimes with changes in the law and sometimes with changes in the interpretation of the law.

So yes it's no accidentally vague.

More concrete would be : It should be illegal but might not be due to the law not being adapted to the dynamics of many modern markets.

But that's still pretty vague tbh.

The usual answer is that people who buy the phones must think it’s ok, otherwise they’d buy a competitor’s phone.

And of course opinions differ on the good and bad aspects of their policies.

It’s not like all the competitors who are complaining are ‘fair’ in any particular way.

Also, your description fits a department store, or Amazon, or pretty much any other store for that matter.

All store owners get to stock what they want, charge what they want, and give their own products advantages.

If your argument is that no store should be able to do these things, then that seems like a reasonable position to hold.

Perhaps we do need to overhaul the notion of marketplaces and intermediaries in general. That seems like a relevant idea to explore.

The people arguing about monopolies are saying that everyone else should be allowed to do these things, but not Apple because they have too much power.

> The usual answer is that people who buy the phones must think it’s ok, otherwise they’d buy a competitor’s phone.

People don't realize what's actually going on with the policies and practices of the app stores. They just buy the phone and use it. If they did know, they would probably be more opposed to it too. They don't realize how these practices actually impact them and their choices on the platform.

> The usual answer is that people who buy the phones must think it’s ok, otherwise they’d buy a competitor’s phone.

I think plenty of people might think on reflection "That's not cool but I still want that phone".

That pretty much sums up my continuing commercial relationship with Google as well.

And my feelings about most modern meat production practices.

We don't always vote with our wallets.

As far as I remember it is a perfect Nash-Pareto equilibrium strategy: "keep the same price as the other side until the other side changes it". And, if all sides follow this strategy then prices are always $50

It's likely that the investors in each company are mostly the same institutions, namely index funds and ETFs issuers. When you have investors that own everything, they don't want the companies to compete.

Yup. We have similar behaviour with cell phone companies here in South Africa. The big two have reached a stable state, are happy with their market share, and know that as long as they don't directly talk to each other when raising prices, they are legally in the clear.

> It's not a monopoly issue, it is an anti-competitive issue.

Indeed. It is a common misconception that antitrust only applies to monopolies. You can engage in anti-competitive behavior of various kinds, illegally, without actually having a monopoly in strict terms.

For locations in Canada with a local cell provider or internet provider, the pricing is much better. Either lower prices, more services for price point, or a combination of both.

I suspect this is/was part of the push to get non-incumbents into the cell market.

Even then, it's just a matter of time before they get assimilated into the Borg. Manitoba used to have MTS, until it was bought by Bell. I would not be surprised if in 20 years Vidéotron and SaksTel would be long gone too.

That's actually interesting too, the prices went up I think after they sold. Good evidence for people opposed to further actions like that

Not to contradict your point, because I agree fully, but given how concisely you put it, I'd be interested in what your thoughts are on Freedom Mobile? I know they're kind of independent, but also their coverage sucks.

I used them for years and quite liked them. Inside a city, you can usually get good coverage. Outside of the cities, you paid a little extra.

But this was back when the best they offered was 3G, and their signal quality wasn't great. After a few incidents where I was downtown in Toronto, full bars of signal, yet couldn't open a single webpage or use my data, I decided it was time to ditch them. I loath the big-3, but I needed reliable service.

I've heard that after they installed their LTE/4G towers, most of those problems went away. Maybe I'll go back, eventually, but for now I'll be gouged like most Canadians.

They have serious coverage issues, even in Calgary, where they are headquartered. By the time their coverage converges that of the big players, I expect so do their prices. Right now, they are not a realistic option for most people because of the coverage issue.

That sounds like the kind of thing that doesn't begin to change until and unless someone either starts putting up their own towers or VoIP becomes ubiquitous enough to be a real threat to the cell business model.

This has been attempted before. Wind Mobile (now Freedom Mobile) was an upstart carrier that attempted to compete. They ended up just getting acquired though.

Their Wikipedia article paints a pretty bleak and accurate picture of the "competitive" landscape:

> Freedom Mobile Inc. is a Canadian wireless telecommunications provider owned by Shaw Communications. With 1,767,155 active subscribers (as of the end of February 29, 2020) in urban areas of Ontario, British Columbia and Alberta, it is Canada's fourth largest mobile network operator with 5% market share.[3]

> Founded in 2008 as Wind Mobile by the telecommunications company Globalive, Freedom was one of several new mobile carriers launched in Canada in 2008 after a government initiative to encourage competition in the wireless sector alongside Mobilicity (later acquired by Rogers Communications) and Public Mobile (later acquired by Telus).

https://en.wikipedia.org/wiki/Freedom_Mobile

Free did this in France for mobile. It really drastically squashed prices for some time. Then everyone went down to match Free's prices somehow and we're now at a new equilibrium...

> They don't gather in smoke-filled rooms and decide how to screw over their customers.

While that makes for nice rhetoric in your great comment, you don't actually know that this doesn't happen.

You don’t know that OP doesn’t actually know that doesn’t happen.

But you do know that they don't know that the OP doesn't know that doesn't happen?...

> 10 GB smartphone plan for $75

Wow. In France it's the reverse: during promotions, you can get 70GB for €10.

Out of promo, it's €15-€20 at low cost operators, and €35 at traditional brands.

Yeah, I spent half a day walking around phone stores in Vancouver trying to find a couple of GB pay as you go sim (expecting it to cost $10-20). Turns out they don't exist in Canada.

It cost me $50 to get a 1GB plan in Montreal because they bundled it with a useless 'calling plan' that only worked in the province. There has to be a special place in Hades for the people in charge of Canadian telecoms and banks, I hope.

I find those prices shocking. In the UK, I pay £10 for 6GB and unlimited calls and texts. For £20, I could have 80 GB of data on my current network.

But that same complained about phenomenon applies in the UK. Regulators do put at least some effort into trying to disrupt it but it's definitely there.

Example: A few years ago it was legal in the UK to advertise the price of broadband excluding the fee for "landline rental". This recurring fee notionally covers the service cost of the actual copper (in most cases) last mile cable needed to deliver service. In principle you could use it to make voice telephone calls (remember those?) and needn't buy it from the same provider as Internet service piggybacked on the same physical infrastructure.

So e.g. Big ISP #1 advertises Internet is "£5 for first six months†" and then the small print explains "† Plus line rental of £11.50 per month". That's £16.50 customers will actually be paying, and a competitor Big ISP #2 won't get far advertising Internet as "£15 for first six months" because that sounds much more expensive even though it's less. So sure enough they'll do the same thing only more so "£3 for the first six months†" "† Plus line rental of £12 per month".

Still, ISPs argued this is fair because they don't actually provide the service "line rental" pays for, they don't have teams of engineers in vans ready to dig up cable and repair it, that's something a last mile owner does.

Except, since the last mile is a natural monopoly that provider is legally obliged to publish its pricing and rationale. Sure enough it does bill for "line rental". But is it charging £12 per month? £11.50 per month? Er, no, over the modern period its costs have reduced gradually and it's charging those ISPs about £8 per month. So that £12 "line rental" is actually £8 line rental plus £4 "Money we're hiding from our real prices so as to trick customers".

Even if they never met in a darkened room and agreed to fix these bogus prices, the effect was that all large UK ISPs inflated a fee so as to make their prices look cheaper, taking advantage of customers. Maybe no crime was committed, except in the sense that customers got ripped off.

This particular loophole was closed by requiring ISPs to advertise the price that includes all fees needed to deliver the actual service, and sure enough once they couldn't use it to hide the real price the ISPs stopped pretending "line rental" cost 50% more than it really did.

Ha, you should see US prices. I had to buy a T-Mobile hotspot for work-from-home continuity when my home Internet suffered a major outage. The prepaid plans for $40 a month for 10 GB, with no rollover. It's impossible to just buy 50 GB and have it work until it runs out, which is obviously what I want for a failover data plan. When you have your monthly plan, you can purchase an "on-demand pass" to add extra data above your monthly allotment. The largest on-demand pass is 7 GB and costs $50. And each on-demand pass only lasts 30 days.

I think the UK telecoms market has much lower headline prices thanks to the sheer number of MVNOs (virtual networks) - regular operators even own MVNOs to get some brand segmentation (Three owns Smarty, Telefonica O2 owns GiffGaff, just to name two).

The MVNOs compete heavily on price, and drive prices down for savvy customers. You can get 3 GB/month with unlimited calls and SMS (with roaming to 50+ countries) for 6 GBP per month on a 30 day rolling deal, right now.

From working with Canadians, it always supprised me how they seemed fine with these non-competitive practices for Telecom and Banking. It seems that they are systematically over-paying for what they are getting.

Maybe it's a form of pride to have the "Canadian alternative"? Or they feel they couldn't really compete with the US/Europeans?

I wonder to what extent it's actually true though, to what extent are higher prices not simply driven by higher costs, rather than some kind of tacit collusion to drive excess profit?

Population density in Canada is about 4 per square km, in the US about 36, and in the UK (pretty typical for western-europe) about 270.

I know that much of Canada is mostly uninhabited and typical population density is a lot higher, still, to hook up Canadian telecom infrastructure seems to be inherently to be a much more expensive endeavour.

I compared quickly (not very thorough) the profit margins and some ratios of US/Canadian telecoms, and they're really not much different.

What's interesting is to look at the population distribution and not simply density. [0]

It's an extreme outlier in terms of habitable land vs land area. 5% of it's land is arable, as compared to close to 17% for the United-States. I wouldn't be surprised if 90% of the land was simply not inhabited.

[0] https://geopoliticalfutures.com/population-density-of-canada...

In Canada, Fido has $10/m + tax "Tablet Plan" which can be used on phones and gives you 4GB/m data. You may need to find someone who already has a Fido plan.

I use the 2ndLine app for (very rare) calls and SMS. It gives you a local number. Data-only is the most cost effective imo

HN is quite invested in Apple that's why you would see a lot of people defending them here.

Same for webdev

You gave an example of price fixing, not anti competitive behavior. They don't have to meet up in a secret room either for it to count. If they are constantly adjusting their prices to all be exactly the same, that is illegal in the U.S. as price fixing.

Price-fixing is an falls under the umbrella of anti-competitive behaviour. For example, at least in Canada, Competition Bureau is in charge of avoiding price-fixing. On FTC website, price-fixing page is filed under Competition Guidance.

https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

Exactly! The example just describes a cartel of companies that have an understanding of non-competition. If it was a truly competitive the prices, features and offers would always be better to attract customers all the time.

While 30% is steep I don’t think Apple is at fault here. You wanna be able to use their carefully constructed walled garden with security protections, servers, payment system and users? You have to pay to play.

The sadder part of this is when one of those not-colluded companies decide to increase a big number their service, the others wait to see is people accept this and then they do it as well. There is where we hurt ourselves.

The same thing happens here in Australia with banks (4 major companies) and petrol stations (2 major companies).

That's called an oligopoly and falls under the same rules as monopolies

In so many words, you've just described an oligarchy!

The word you are looking for is: oligopoly.

A market equilibrium is reached and it’s called anti-competitive behaviour. I don’t know whether to laugh or cry.

I suppose the state could implement price controls and force Rogers et al to lower their prices. That worked well in the past!

What has worked in other countries, namely Australia, is MVNOs. The government is considering mandating telecom companies to give MVNOs access to their network, like they mandate cable and internet companies, but it is unlikely such a decision would be made anytime soon. Australia is truly a success story. I wouldn't mind if Canada's telecom landscape becomes more similar to Australia's.

Market equilibrium !== collusion and it's difficult to tell them apart.

Canadian telecoms are not colluding.

I worked for one of the Canadian carriers, and they are only not a monopoly as far as the paper definition is concerned, but in practice they do in fact gather in smoke-filled rooms and decide to screw their customers (your words, not mine). They are also very good at pretending they don't.

Apple on the other hand has created an infrastructure to enable a billion interconnected devices, and they are now charging a fee to operate. They are not colluding or preventing competition, they are simply saying there's a price to play, and it's 30%.

It's natural that Fortnite doesn't want to share their profits, in the same way that Apple doesn't want to be the only ones taking the loses, but every time this question comes up, lots of comments assume Apple should bend over simply because it's bigger and wealthier.

Fortnite of course expected this: seems like they’ve prepared a short video mocking Apple’s old super bowl ad 1984 to premiere in an hour https://twitter.com/fortnitegame/status/1293984290326433792?...

They also just filed a lawsuit (see https://news.ycombinator.com/item?id=24147486).

The strategist in me thinks that Epic Payments is a provocation rather than a product, they've been in touch with state attorney generals about Apple's antitrust situation, and the real goal is to get that lawsuit out, bring the antitrust hammer down on Apple, and maybe get some free PR and marketing from the press cycle.

Epic is tied to Tencent. This is a risky move.

This should not matter, if it does then it would be hard to call the US a "constitutional state"/"state of law".

Yeah 40% ownership. I was wondering how that would suss out with the Trump admin Tencent ban that will supposedly come down in a month and a half.

Just when the "Apple Fellow" Phil Schiller wanted to take some break, These recent App Store incidents starting from HEY will make it very very hard for him!

It's a great move. The industry needs a new platform hero since Valve seem completely distracted by VR.

Doesn’t Epic take a cut out of every single purchase made of a game built with Unreal Engine?

Seems kinda hypocritical that they’re taking this stance when their licensing model is arguably just as burdensome on developers.

In my opinion, Epic should not put their app on the App Store if they don’t like the terms, just as they would tell a developer to not use their engine if they don’t like the terms.

If a developer doesn't like Unreal's terms, there are other game engines.

If a developer doesn't like Apple's terms, there are no viable alternatives for iOS distribution.

I think a more apt comparison would be... If a developer doesn't like Xbox's terms, there are other gaming platforms...

But there are other Smartphone platforms with their own store, correct?

I don’t know why people feel it’s their undeniable right to be able to provide an app to iOS users.

Most people don't have more than one phone. Phones are used for more than gaming. If a developer doesn't like Apple's terms, they can't distribute on iOS, except through a web app.

Perhaps PWA+WebGPU will solve this.

> If a developer doesn't like Apple's terms, there are no viable alternatives for iOS distribution.

Lots of opportunities for mobile distribution though. Apple is what, < 20% of the mobile market? (I know where you're coming from, but this is what Apple's legal team will say).

You are missing:

.. not covering the iOS marked is for some products not viable and might literally lead to insolvency in the long run.

Today you can tell people that you don't provide a game on e.g. X Box and they might not like but accept it. But you can not tell people that their premium mail service has no iOs app or that they team meating software has no iOs app or that their <insert any software covering a group of people> app doesn't work on iOs.

Tbh. it's probably somewhat true for tipple A massive multiplayer games and games consoles, too.

In this case alternate platform is android, PC, consoles

It's a false dichotomy; the correct comparison is:

If a developer doesn't like Apple's terms, there are other phone platforms.

Okay, but imagine that Fortnite used Unreal but wasn’t created by the creators of Unreal. Do you think that Fortnite would be more comfortable playing chicken with the App Store and risking getting banned like this, or playing chicken with the game engine that their entire game is implemented with? In practice I would say a game engine has more leverage over a game developer than a single distribution platform.

Epic only takes a cut when revenue exceeds one million dollars and then only 5% which is considerably less than 30% on every transaction.

I don’t think Epic are against fees so much as against ones as high as in the App Store.

The Unreal Engine license is like Epic giving you a toolbox for no upfront cost, but charging you 5% of whatever revenue you generate selling goods made using the toolbox.

The App store comission is like Apple charging you 30% anytime you sell one of those goods to someone who lives in an Apple branded house. (To complete the analogy, maybe you're a door to door salesman and Apple charges you a "sidewalk usage fee" or something)

One (Unreal Engine) is a licensing agreement for a tool with no upfront cost; the other is a tax on any sale made to an end user.

That's right, but the basis of comparison is different.

Apple has a monopoly on 1/2 of Smartphones users in the US, Android the other.

This is a totally different scenario that 'choosing component vendors'.

It's not even remotely the same. They don't require you to distribute on the epic store. Moreover you don't owe them a penny for using the game engine until lifetime gross revenues exceed $1MM.

> Doesn’t Epic take a cut out of every single purchase made of a game built with Unreal Engine?

Only those that make >$1mil lifetime gross.

Note that $1mil lifetime revenue is a very low boundary. A very small consulting operation of 2 or 3 people could easily hit that in a year or two. A single freelancer could probably hit it in 4 or 5 years. It's easy to read "a million dollars!" And think "we're rich!", but running any business has a lot of overhead.

30% is extremely high by any reasonable standard for any marketplace

FWIW brick and mortar stores usually take 40%.

It’s so strange to me that after all this time they’re sticking with the high fee. The App Store is a major feature of the iOS platform and Apple benefits greatly from a healthy app ecosystem and user lock in. I would argue the 30% fee may not be a net gain for Apple.

Doesn't like every online "platform" take 30% cut? Google play, playstation store, steam, xbox store, nintendo store?

On the contrary, it is quite low versus what previous app stores for J2ME, Symbian, ringtones used to charge for.

Apple's AppStore is a distribution channel.

Taking a 30% cut of all future revenue from the game just because they established the initial install is waylaying!

Unreal Engine provides a lot more value to game developers than the App Store does as an app distribution platform.

Businesses don’t make money by worrying about morality or worrying about hypocrisy.

They certainly can, if indirectly.

Edit: "do" -> "can"

A much smaller cut in a much more open market.

Maybe when you have a product anyone wants, you can decide what metagame to use to get it distributed.

Businesses don’t exist to define a moral compass. They exist to make money. Any large and successful company will happily play the “do as I say and not as I do” card as often as they think they’ll get away with it.

I’m not saying it’s right but it’s pointless being shocked by the hypocrisy of the logic that businesses are run by.

Businesses are legal fictions. There is no inherent reason shareholders should be the only constituency businesses serve.

Here's the video: https://www.youtube.com/watch?v=WqTNO8LTggI

#freeFortnite, cute.

This is not surprising to me, and I have to say, I completely agree with it. Epic publicly and blatantly bypassed multiple App Store restrictions with their move today.

Surely they were expecting this to happen, so what comes next? Perhaps Epic has been planning a major lawsuit and this will provide them with the reason to launch it?

Edit: https://twitter.com/FortniteGame/status/1293984290326433792

They have an entire short prepared for this. This is nothing if not fascinating deep-level company poker.

I'm very sure Epic saw this coming. I assume they, and many others, are spoiling for a fight with Apple over this and are willing to take this risk in bringing public opinion with them.

Of course they did.

It's to coincide with EU/US investigations into the Apple and Google App Stores.

This seems ill-advised for Epic, in particular. The fight they're picking will logically end in a regulatory hammer coming down and that hammer is going to hit Epic a lot harder than Apple just because Epic is even more reliant on extracting revenue from being a platform owner than Apple is.

Epic's platform is Unreal Engine. The key difference is Unreal Engine is not the only game engine. You can use another game engine and gain access to the exact same user base. You could certainly argue Epic Games have made anti-competitive plays. However, they're not stupid, they even fund their "competitors" https://gamefromscratch.com/godot-receives-epic-megagrant/.

> I completely agree with it. Epic publicly and blatantly bypassed multiple App Store restrictions with their move today.

App Store policy is not law - its terms are unilaterally set by Apple. Citing it as justification makes no sense.

company policies are a funny thing.

I know of a business that had a policy that fired someone for missing work 3 times without notice. So... an employee missed work 5+ times and then got fired. That employee sued AND WON because the company didn't fire at 3, they waited until 5. If a company has a policy or ToS they need to enforce it.

The own the platform, they designed it, built it, and maintain it. They have every right to set the rules for it.

Barring clauses that are deemed unenforceable, Terms and Conditions are effectively the same as the law when it comes to interacting with Apple's services. Citing them is actually fair, since the courts will uphold enforceable clauses if someone sues.

If you want to argue that Apple’s TOS are unenforceable, then that’s a different argument.

The law allows for Apple to do this. You don’t have to use Apple products. You don’t have to use the Apple transaction system. It is not a commons, it is not a monopoly. There are other platforms and e-commerce solutions.

If you want to regulate Apple’s behavior, introduce a law (I would support a law to regulate Apple’s cut of App Store transactions). Fortnite getting booted isn’t going to get a bill sponsored or have antitrust regulators take notice. It’s a breach of contract currently, no more no less.

Except Apple also already foreseen this.

Really hoping regulators crack down hard on Apple's clearly anticompetitive practices.

If Apple allowed sideloading the entire point would be, of course, moot, but Apple's continued refusal to allow this is really the biggest problem, IMO.

As a user I'm quite happy with Apple intermediating my relationship with companies that seek to do business with me over the phone, and I'd actually be happier if Apple took over more of my relationships.

I don't want a situation where 10 apps means 10 different privacy agreements. I also don't want to deal with app companies directly for returns or their custom payment solutions — an "Amazon" is way better.

> and I'd actually be happier if Apple took over more of my relationships.

I’m really curious what you mean by this. Which additional transactions do you wish Apple would take a 30% cut on? You DoorDash orders, your rent, your salary?

> Which additional transactions do you wish Apple would take a 30% cut on?

That's not what they said. Apple already handles payment processing via Apple Pay for real world goods (Amazon, Food delivery, Wish), and does not take a cut of the transaction. Some people see Apple controlling payments for many companies as monopolistic and overreaching, but some (like the parent poster and myself to a degree) see it as a safer alternative to having trust dozens of different companies.

Isn't the situation similar with Amazon? And how much higher are the prices for the consumers, in return for the Amazon experience? What is the Amazon tax to the consumer?

If it meant my work processes were as streamlined and organized as Apple's operating standard? Political antics gone? Safety and security with no negotiation?

Tempting...

(Just experimenting with the idea, not that I actually agree with this line of thought.)

> I don't want a situation where 10 apps means 10 different privacy agreements

No one forces you to side-load. I don't see how you not wanting something turns into "no one else should have it"

Conversely, one of the things I miss about Android apps is the competition. I recall there being several (free) apps that fulfill some function on Android, and then when switching to iPhone, the apps that provide that function costing $10+ dollars.

There's an obvious trade off for security/reliability, but I've still come across my fair share of terrible iPhone apps. Android definitely has a more freeware/open source vibe.

On Android I pay a one time fee of $25 to get access to the play store. On Apple I pay $100 every year plus they are total dicks about it. The fee is $100 yet I pay even more although my currency is stronger than the dollar plus sales tax!

Come back then, we have chocolate.

Nobody is forcing you to side load apps. Just because someone say has the option to install an application that Apple censored it it does not mean you are also forced to install that application.

Adding sideloading support would not affect you then. This is about those users that want more control over their devices.

Then you're welcome to not use anything other than Apple's services.

You're just annoyed because you want third party apps, but you don't want to follow their ToS :)

And this is your choice, should you limit your use to the app store.

Now explain why the rest of us have to be limited to your choice only on our $1000+ mobile computers.

That is quite fine for your personality and capabilities, however there are a lot of people who would love to have the freedom to choose differently.

This comment misses the point though.

If you want to be happy with using the store for all your life's needs - that's completely fine. Nobody will argue with you here.

Otherwise, people should be able to download as they please.

Imagine if your electricity company only allowed 'approved Toasters' on their electric grid, complete with special plugins, and a 30% cut of the device.

It's an anti-competitive practice as old as time.

> Imagine if your electricity company only allowed 'approved Toasters' on their electric grid, complete with special plugins, and a 30% cut of the device.

You mean like the days when Ma Bell limited the selection of phones that people could choose from?

https://en.wikipedia.org/wiki/History_of_AT%26T#Monopoly: 'Each phone was leased from AT&T on a monthly basis by customers, who generally paid for their phone and its connection many times over in cumulative lease fees. This monopoly made millions of extra dollars for AT&T, which had the secondary effect of greatly limiting phone choices and styles. AT&T strictly enforced policies against buying and using phones by other manufacturers that had not first been transferred to and re-rented from the local Bell monopoly. Many phones made by Western Electric thus carried the following disclaimer permanently molded into their housings: "BELL SYSTEM PROPERTY — NOT FOR SALE."'

Additionally, 10 different payment systems. I trust Apple. I'd like to buy whatever subscription, but now "Joe's email app" wants my credit card number. Now I have to figure out if I trust them as well.

I’m a huge fan of Apple Pay and do not begrudge the 0.15% cut they take on those transactions. The cut they take for App Store purchases is over 100x that amount, which is obscene.

I don't see the problem here -- Epic adds their own payment option in addition to Apple's. I believe Apple could mandate that they always be allowed as an option like they do with sign-ons. If you only trust Apple and you want to pay 20-30% more for your purchases that can still be an option.

The question will be if developers start abandoning the platform will you be a happy user if you're unable to access popular apps on your locked down Apple computer.

What if you want better privacy than what the App Store can provide, like F-Droid? On iOS, you're currently out of luck.

Each app already has its own terms of service

well they do allow that, users have to reinstall every week though.

I'm not sure I'd qualify that as "allowing" -- seems like more of a loophole to me.

They absolutely do not allow that. It is against the ToS to distribute apps using developer signing - that is only allowed for in-company testing and development, and potentially for some limited beta testing.

Free certificates last a week. You can also pay Apple $99 to get a certificate that lasts a year, or pay a "UDID registration" website around $10 for the same (with some limitations).

What is Apple’s end game here? It seems like they’re fighting a losing battle and digging their own antitrust grave.

Pretty clever on Epic’s part to specifically highlight how Apple’s app store fee hits the user directly. Pretty short-sighted of Apple to immediately pull an app for providing consumers with additional disclosure about where their money is going.

The interesting thing is that it didn't hit the user directly until now - from what I can tell, Epic Games were quite happy to charge the same amount on platforms like PC and pocket the extra 30% right up until the day that they pulled off this stunt and needed to spin Apple's cut as something that cost consumers money rather than Epic, and presumably they'll put the prices right back to normal if they win.

The other interesting thing is that they're charging the reduced price on consoles which I believe take a similar 30% cut to Apple.

Apple is enforcing its own rules. If they didn't do it, it would open the door for more companies to do bypass them.

It's pretty clear it wasn't a mistake from Epic, so there's no point in dallying.

if you look at iPhone sales over past 6-8 quarters or so growth is slow to non-existent. they are squeezing services revenue like this to continue growing their top line.

personally i don’t see it as sustainable and surprised the stock keeps hitting all time highs.

Apple's the richest company in the world.

They certainly have a lot to lose if they back down, and a court battle's outcome is uncertain.

What is also certain is that Apple has enough cash sloshing around to out-lawyer and outlast anyone on the planet. They very clearly do not have a monopoly, and the charges of anti-competitiveness are a bit flimsy. Seems like a worthwhile risk to take.

Good lord - on HN the monopoly comments are so crazy sometimes. What is the monopoly issue Apple has? Use android if you don't like Apple's product line. Apple is at 22% share.

From the FTC itself[1]:

> Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area.

[1] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

Geographic area is an interesting term here. If you take "iPhone owners" as a geographic area, then Apple has a 100% monopoly on that market. Geographic area == captive audience, and since iPhone users are a captive audience of the app store.

I think there's a reasonable argument that users buy iPhones with the expectation of a market in the app store (I can get or buy apps from any company that cares to develop one), so when Apple charges a 30% fee (far above normal payment processing fees) on every transaction made through the app they are abusing a monopoly position.

I suppose the next case will be against Walmart for not allowing me to setup my own kiosk with my own payment processor in their store if you define markets in this way. They have a monopoly in their stores on sales of items.

>on HN the monopoly comments are so crazy sometimes

what's crazy is harping on a technicality about the word "monopoly" and then to ignore the actual issue that is implied by the criticism, market power.

Even two companies aren't a market, if you get hung up about monopoly call it a duopoly. The state of affairs is ridiculous. There should be a thriving market of competing stores, payment systems, operating systems and so on, yet we're stuck with at best two alternatives, both of which are extremely locked down.

But is that required on each and every platform available on the market?

Sure, there should be more platforms available. I'm into that. Personally, I bought an iPhone because of the closed ecosystem. I don't want to have to think about my phone that much, but I want to be able to rely on it. That's what I paid for and that's what I'm getting.

From my perspective demanding that the platform be open to any and everything is a bit like going to a carwash and demanding they also do your house.

> There should be a thriving market of competing stores, payment systems, operating systems and so on

That sounds terrible. Myriad incompatible ways to find apps, having to give your financial information to lots of different systems you have to investigate individually, or not be able to do business with someone using a different system, apps only being available on the small number of devices running the OS they were developed for.

All the things you mention benefit massively from network effects, which can greatly benefit consumers.

It's strange that there are different hardware vendors, it's just that making your own software experience seems suicidal. Perhaps in an alternative reality, the US government would've invested in Firefox OS among other competing projects.

It's not about using a different OS. The monopoly is that if you want to distribute through Apple, you have to go through their app store. There's not another app store that you can go through.

At least with Android you can go through f-droid if you don't like the Play Store.

That’s not a monopoly though. No one is being forced into using an iOS device.

A monopoly would be if Apple was literally the only smartphone manufacturer in the entire world.

I'll defer to Epic's official court filings to make the argument for a monopoly for me. I'm not an expert on such topics, and it would be out of turn for me to speak more on it.

"Apple monopolizes the iOS App Distribution Market".

https://cdn2.unrealengine.com/apple-complaint-734589783.pdf

iPhone has just under 50% in the United States. The 22% share is globally. So in a US court, their would be an argument for monopoly (or duopoly).

https://www.statista.com/statistics/266572/market-share-held....

It's crazy how he won't respond to you know, since people purposely keep saying that Apple is not a monopoly, and when someone shares a stat where Apple has around 50% marketshare, then they just disappear in the ground.

I don't have time to respond to every comment. The court case argues that apple monopolizes the iOS App Distribution market. So they claim a real monopoly.

Similarly, I'm sure Walmart monopolizes the Walmart distribution market.

As that law has been interpreted, it is not illegal for a company to have a monopoly, to charge "high prices," or to try to achieve a monopoly position by what might be viewed by some as particularly aggressive methods. The law is violated only if the company tries to maintain or acquire a monopoly through unreasonable methods.

They STARTED the app store with these terms, that is literally the OPPOSITE of achieving a monopoly with predatory or below market pricing. They did such a good job that despite the high price most developers make LOTS of money on the app store, and users value many of the elements as well.

Anyways, will be an interesting case, but it's not "crazy" that someone doesn't have time to respond to every point on HN - seriously HN has gone full outrage / offense these days with no ability to just discuss merits, consider other viewpoints.

Yes, the monopoly comments are so crazy. Because it turns out modern antitrust law isn't about monopolies at all.

If you read into anti-trust laws for more than 10 seconds, you'll realize that it covers much more than just monopolies.

Apple is at a much higher dollar share of the high-spending consumer segment that is relevant to app developers.

But could it be that the extra 30% Apple charges goes partly towards curating apps and ensuring they work well and are reasonably secure?

And that the high-spending consumer segment appreciates this?

Exactly this - I'm a "high spending" customer. Because they take pretty good care of their store, because there are no surprise auto-renewals and on and on I spend money freely - it's pretty safe to.

I always seem to regret signing up for subscriptions elswhere. Did anyone have the myheritage fight - I did that 5 years ago - total nightmare. I mean - how is stuff like THAT legal (hadn't used service in a year, no notice prior to the renewal being billed), no way to get out of paying.

We roughly know their profit margin on the App Store from corporate reporting though so seems unlikely to be any significant spending on curating, and a lot is to curate away competition like Steam's streaming that allowed PC game purchases to be remotely made through streaming your desktop and big picture mode.

Huh? All of Apple is (or soon will be) an entirely closed garden. You can harp on the literal meaning of the word "monopoly" all day, but Apple still makes a profit from a market dominating position. 30%? Just to be distributor? Really? If their H/W would be free I'd have some sympathy, but as is you pay for their devices and then pay a 30% fee. In my book this is way-laying.

I'm not using any Apple products for exactly that reason (other than what my workplace forces upon me.)

On my Android phone I can install any 3rd party app I please - there even is "F-Droid", a non-Google app store for open apps, which I use a lot.

And for desktops I use Linux. I guess I'm in the minority - even here on HN.

Where does Apple cross the line from being able to sell a completely closed garden product to having to allow fair competition?

If iPhone had no App store and only had official Apple apps we wouldn't be having this conversation, regardless of how popular iPhones are.

I think Apple is in the wrong, but a critical issue what threshold or criteria must be met for them to be required to offer an open(ish) platform?

*open(ish) meaning allowing alternative app stores or charging industry standard payment processing fees.

Monopoly or not, Apple users (apple love lock in, moving to android is not trivial) are not treated particularly well.

I've been an Apple user for 15+ years. However, my first 3 smartphones were Android. In 2016 I switched to an iPhone and I prefer the "lock in". I prefer the "walled garden".

In my youth I had the energy and desire to individually assess how much I trusted what I downloaded. Today I do not want to spend the energy/time so I spend financial capital to have Apple assess trust for me.

Does that mean that app developers have a harder time selling me their software? Yes. I empathize, but I don't want to be an early adopter anymore. I'm happy for those developers to first build trust, then have access to me as a customer.

"I don't like it" and "It's illegal" are not the same thing.

The comment you're responding to never used the word "monopoly", what are you talking about?

Good point - my mistake there for sure! I was also responding to a comment saying Apple should be broken apart at same time.

I'm mostly responding to the strong comments - in this case "digging their own antitrust grave."

While falling into an anti-trust grave would be very serious - we are a fairs ways away from that here I think.

The iOS app store has a fairly large majority of mobile app revenue.

In Sweden iOS is at ~50%.

So if in a year a product comes out that I really want to use, the product really wants to support apple, but apple says "no we're not going to allow you". I have to create more ewaste by going and buying an android phone instead?

Is this what we're advocating for? More consumption of rare resources?

No, you know that the app might not be available for your new iPhone and accept the fact when you buy it or you just do not buy an iPhone and buy Android/LibreOS/etc instead.

'Monopoly' is just a poorly phrased way of saying abuse of market power.

Edit as reply: I'm not accusing them of breaking a law, but of abusing their position. That there might not yet be a law against this specific kind of abuse doesn't make the practice any less abusive.

If you are accusing Apple of doing something contrary to US law, you have to be specific about what that is. What do you mean by "abuse of market power"? What is the law or regulation that you are accusing Apple of being in breach of?

Apple platform is closed like gaming consoles. Epic almost certainly knew this was going to happen. I think they are trying to build a case for regulatory intervention.

US Antitrust is still in the 80's Chicago School era where antitrust is solely based on consumer benefit and and efficiency. EU has more broad approach where economic power in the public interest is important. It may be up to the EU to change how Apple does business.

If Epic is planning to rely on US anti-trust intervention, they will be waiting a very long time, even in a best-case scenario situation.

Unless they know something the public doesn't about a prior case file, this stuff takes a long time to be fully investigated and go through the courts.

That's why I think it's up to the EU.

Still won’t be quick. EU has bigger things to deal with right now and even if they do pass something the ECJ would then be involved no doubt.

They don't have to pass new laws for this.

Epic could sue in some EU country or some European game developer might jump in.

This seems like a close and shut case of consumer harm right here.

Apple can argue its 30% surcharge protects consumers from their payment information being tied to each individual product, making canceling easier and buying things safer.

Then let the market decide if they're ready to pay 30% for that, when they can get <1% at larger competitors who are not even allowed on the platform. iOS is so ubiquitous at this point it should be treated by regulators as a platform, not as a product.

Sure and if they believed consumers value that, they wouldn't object to competing with alternative payment options.

... and competitors do the same for less than a tenth of that cost. The only thing that allows them to do so is complete control over the ecosystem to shut out all competition.

If that were the legitimate reason, then they could accomplish the same goal by requiring all in-app purchases to have the option of going through them, rather than exclusively going through them. Then people who cared enough to pay the 30% Apple tax could have that protection, and the rest of us could save a lot of money.

Paypal does the same thing and charges an order of magnitude less.

which I very much agree with.

The transparent sophistication of this ploy is strangely delightful. And very reminiscent of Steve Jobs' e-book negotiation emails, https://www.theatlantic.com/business/archive/2013/05/the-ste...

We have been given court-side seats to a sophisticated game of feints and dramatic negotiation. Pre-Game, Epic lined their shot with care. They've come prepared with media and assets, (no doubt) lawyers (and potential lawsuits?), PR strategy, regulatory strategy etc. They know the argument they would like to make. And they know how to make it.

How will Apple respond? Will Epic's strong start lead to a strong finish?

Their machinations have been laid scandalously bare. If you listen closely, you can hear your local business school clickety-clacking away to a ludicrously overpriced case study. And the local #hustle blogger RSI their way to a million views.

O'Think of the great blog posts and MBA lessons this drama will make!

edit: and they've filed for relief! https://cdn2.unrealengine.com/apple-complaint-734589783.pdf

It's interesting how the industry is shaking up in so many different ways lately.

1. TikTok and WeChat getting banned (This will also have a huge side effect for Apple)

2. Uber and Lyft regulated to classify drivers as employees

3. Influential companies trying to tear down the Apple payment walled garden (Last time it was Hey, but this time it's Fortnite, which is infinitely more formidable). Now the only thing left is for Google to come out and say "we're going to charge zero commission for our in-app payments", and the wall will be down pretty soon.

I feel like there's some pattern here that may change the overall game of the tech industry. Grabbing some popcorn and waiting for new opportunities to open up!

You could say that the disruption is being disrupted.

Regulators are slowly getting sick of the tech industry's behavior of overthrowing markets by VC-ing out competitors to establish their own monopoly all while dodging taxes through global schemes.

About popcorn... On a smaller scale, I can't wait to read the scathing, cynical take n-gate.com will no doubt have on these HN threads

I am ignorant of the rules applying to apps with payments in the apple app store. Is it true retailers do not have to pay a percentage to Apple when people pay to reload cards through the app?

https://twitter.com/ballmatthew/status/1293893660493455360

"Wow. Epic outright promoting direct in-app payment around iOS store but in iOS apps

And users collect 100% of the savings. No monetary benefit to Epic.

Note: McDonalds, Starbucks, et al are 'allowed' to do this today - but not gaming/media cos"

Physical and digital goods are treated differently.

Wow, what they did is brilliant. Direct way to show consumer harm due to the iOS fees.

Here's the short they just released making fun of Apple's 1984 commercial: https://www.youtube.com/watch?v=WqTNO8LTggI

Edit: The youtube comments are hilarious because no one knows what it's a spoof of. For those who don't know: https://www.youtube.com/watch?v=2zfqw8nhUwA

Given Epic's history, this is entirely them taking the lead and trying to fight for smaller game devs. Kudos to them.

That seems blindly naive but okay.

How so? If, over the long term, Epic wins this fight (e.g via an antitrust case) Apple would either allow sideloading, or reduce their cut. How is that not a benefit for small developers?

I mean, there's obviously business-related reasons as well, but cutting dev cuts to 12% on EGS, waiving royalties on first $1MM of revenue for UE5 games, and providing source for UE4 have all been incredibly massive boons to the indie game dev scene. Benevolence within the industry can foster good will with developers, which positively impacts their bottom line.

Apple and Google are able to gatekeep what you can install on entire generations of devices, from smartphones to tablets. Their power to gatekeep billion dollar markets needs to be looked at through the lens of antitrust legislation.

More people in the world use mobile devices than PCs by a huge margin. These two corporations essentially decide what apps humanity is allowed to use and how all software and services are built. That is a lot of power and it shouldn't be used for the benefit of a single corporation.

Pardon my hyperbole but this is nearing the level of a human rights issue. The freedom to run the apps and services you want to is so core to the way our society works that most people don't think about it. Having one corporation dictate how all apps for the entire world work is not compatible with a free society and actively harms innovation. This is becoming a big problem and regulations are being very slow to react to it.

Google gatekeeps by default but you can trivially bypass and install custom app stores or sideload apps. Apple gatekeeps, and does everything in its power to prevent you from bypassing that. Seems like a rather striking difference...

Third party app stores can't implement background installations, auto-upgrading, or batch installs because of the restrictions Google put in place on Android. Using third party app stores is hindered experience on Android.

The Play Store can do background installations, auto-upgrading and batch installs of software, while competitors can't. That's anticompetitive behavior in my book.

I wasn't aware of all that, thanks, but I still think that Apple's stuff is a whole different ballgame.

Apple yes. Google no. You can install 3rd party stores and freely sideload apps.

I don't think "freely" is the adverb I'd use to describe the sideloading process, considering how "freely" and effortlessly I can install apps in Google's preferred way through the Play Store.

Google made it so third party app stores like F-Droid can't even implement auto-upgrading, or background installations of apps. App stores outside of the Play Store and 3rd party apps are 2nd class citizens on Android.

It is similar to how Gatekeeper works in macOS. Developers that didn't pay Apple $100 a year to develop and notarize software have their apps get treated like they're radioactive by Gatekeeper.

Don't lump Google in with Apple here. Android lets you sideload apps.

That was quick https://cdn2.unrealengine.com/apple-complaint-734589783.pdf

I feel that Apple made a mistake.

App store fees are on the unjustified side in the current spectrum of value assessment.

The more reasonable approach is to figure out ways for customers to get more values from the platform, instead of extracting more efficiently.

I bet this decision is some form of lower-to-middle level decision, without consulting Tim and his close subordinates. I would expect Tim and his close subordinates to be sensitive enough to at least not doing something so abruptly (not that it's not complying with the rules). I would guess this decision didn't even surfaced to VP level. AFAIK, VPs should be owning such sensitive decisions at Apple.

Has Google done anything yet? This is in violation of their guidelines as well from what I can tell. On the Google Play store only games must use the Play Store In App purchase system. Other types of apps can link to their own.

Monopoly definition is so much outdated.

Everything that has 10% market share should have some kind of regulation for things like this.

Defining things like this is hard though. What to regulate is hard too.

This is really bad for Apple users like me and ultimately for Apple.

People are talking anti-trust, but I don't think it'll take a legal case for them to eventually lose this broader fight. Apple has enough money they COULD do whatever they want for as long as they want, but if this grows to even more companies, Apple's negotiating position becomes weaker.

The quantity of twitter replies along these lines is sad:

> Why would epic even do this.... they know the rules. Why would they expect to use another companies platform for free. With apple 100% on this.

Use? they add value to the platform, Apple is just double dipping because crazy hardware markup wasn't enough for them. Are people really this blind?

I wonder if people were still with Apple if Apple charged them 30% for using Apple Pay.

The Verge has a statement from apple: https://www.theverge.com/2020/8/13/21366438/apple-fortnite-i...

Concluding points from the statement:

>Epic agreed to the App Store terms and guidelines freely and we’re glad they’ve built such a successful business on the App Store.

>The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users.

> Epic agreed to the App Store terms and guidelines freely

lol.

are you suggesting they were threatened?

I dont think people here actually understand why monopolies are bad.

Its not for consumers. Consumers will always feel safe with what they have.

Its to not stifle the competition.

Look what happened to vine.

A competitor bought it, twitter. Gutted it and left it. It could have been next tiktok in a few years. We would never know.

How many competitor have google and apple stiffed?

In a way this is the equivalent of an old-school carriage dispute but for apps. I wouldn't be surprised if we see more of this in the future.

https://en.wikipedia.org/wiki/Carriage_dispute

Question: How is Apple's 30% cut different from the transaction fees that are charged by Visa / Mastercard and payment processors like Stripe? I can see the big percentage but is the argument in favour of removing the entirety of the cut or reducing it down?

1. The percentage cut is a lot more in Apple's case (30% vs 2-3%).

2. (Directly resulting into 1) There is no competition for distributing apps on Apple devices. You cannot sideload or implement your own app store. You cannot use any other payment processor.

I think you're right in that the argument is against the huge, rent-seeking percentage, and not necessarily the concept of taking a percentage. If Apple forced all payments to go through them and added only a few percent on top, I doubt this would be as big of an issue.

Visa / Mastercard don't forbid you to use Amex or cash.

How does it technically work? Is the app forcibly removed from every phone that has it, or is it just not downloadable/upgradable anymore. If the latter, can people who have it already keep on playing or are there some other obstacles involved?

Epic has filed a legal complaint, according to their Twitter account: https://cdn2.unrealengine.com/apple-complaint-734589783.pdf

replied to another thread....

ok am going to put a highly objectionable comment. I buy stuff on apple store because its easy and SAFE.

That safety point is more important than ever, if there was no app store or lets say having 10 other app stores , i wont have the same level of confidence and heck i wont even be spending any dollars out there.

Over to Apple's 30 % cut, i dont know whats the call here, to make it 0%? ,10% , 20%? what if the same fortnite (or any other company) increases the bill to $9.99 next week :)

Am saying this purely from a consumer perspective that i dont care how apple and devs split the money as long as it doesn't bite me ...

If there was another app store, no one is forcing you to use it.

The problem are not the rules on the App Store (that Epic actually breached), but the App Store having a monopoly as you can't easily install external apps or stores like you can on Android.

Apple famously makes its money on the hardware; if they claim the cut is for the app store tools, then they better start charging less for the hardware. If the tools are indeed paid for by the hardware sales, they should reduce or eliminate the cut they take.

Based on the reports of how hard it is to develop for the app store and all the third party tools to help deal with signing apps, I have a hard time believing the self-proclaimed greatness of the tools Apple provides.

Apple claims level playing field, but that's obviously nonsense.

This is great news, it will take a handfull of 'killer apps' to possibly move the needle.

App makers could start to 'play games' like trying different pricing models that 'go outside the bounds' and the 'come back' - making sure to blame Apple for the problems.

App makers could group together and 'go black' for a few days in protes.

App makers could group together and all circumvent the rules at the same time.

I find it obscene that Apple feels it deserves a third of each and every microtransaction.

I also find out obscene that Epic tried to used its size to circumvent that when its smaller competitors wouldn't dream of doing so.

But I'm more annoyed by the first bit. It's such an obscene cut to take when it's clear you are only facilitating the transaction by choice instead of by necessity.

People will take sides in this and I think they will be missing the point. These are just 2 greedy corporations strong-arming each other and trying to win some hearts in the public space. Epic would do the same if they were in Apple's position and Apple would do the same if they were in Epic's position. This is just 21st century politics and it’s all about money.

This is a naive take on the situation. Sure they are both companies and looking to make money but this issue transcends both of them and is a core freedom of choice issue. As a society are we allowed to run software that we want or are we okay with being told which software is deemed acceptable for us? This question would be thorny if it even were a political issue but at this point it's literally a private corporation with no accountability unilaterally deciding what software is deemed worthy of use for a large portion of the entire world. That's dangerous and not at all a good place to be in.

It has been like that for 10 years since the start of the Appstore. The difference now is that these platforms are getting big enough that public opinion are starting to look at them as classical infrastructure / utilities. That’s why it needs to be regulated and I agree with that 100%. But Apple is obviously just one example among thousands. Even Epic runs their own marketplace.

If the names were swapped, one of them would still be wrong and the other right. Taking sides on this issue the whole point of this discussion regardless of who's involved.

I don't think that matters because its clear the end consumer would benefit here if epic were allowed their own payment system.

Do you really think they wouldn’t maximize their profit anyway? Being more expensive in the appstore is just politics.

pgrote posted this tweet elsewhere in the thread [0]. They literally gave users the option for apple app store pay for $9.99 and Epic direct payment as $7.99.

[0]: https://twitter.com/ballmatthew/status/1293893660493455360

How is the apple app store not the definition of a monopoly? Is there an competing app store on iphones that Epic could be using?

> How is the apple app store not the definition of a monopoly? Is there an competing app store on iphones that Epic could be using?

I think it's all about how you define the market. Is the market for "apps on the iPhone" or "computer software in general"? Apple has monopoly control of the former but not the latter.

This. Antitrust lawsuits almost always focus on what exactly the market is that the players play in. "Monopoly" is a highly technical economic and legal term that is scrutinized on a case-by-case basis. It is not the broad stroke that the public likes to use.

Why is everyone so obsessed with the non-monopoly status? At least in the EU, antitrust cases don't require a monopoly, it is enough if burdens for market entrance are imposed, or cost for market entrace is too high (and especially purposely set too high by companies to prevent competition). Is this something specific to the US?

Because the iPhone is not a monopoly. Apparently Apple has 58% of the smartphone market in the US so it's not really all that comparable to Microsoft back in the day. So if you don't like the App Store, you can switch to Android.

(I personally don't agree with this viewpoint but it's how it is viewed by many. For one, I've spent $X on iOS apps, if I switch platforms I lose all of those apps. Feels unfair!)

Apple has something like ~40% of US market share of smart phones. Therefore it is not a monopoly even if within that market share they have complete control with app store.

That's only the difference between a monopoly vs duopoly though, and as far as the app developer is concerned I'm not sure it makes much of a difference.

Reality is anyone releasing a for-profit app aiming for mass appeal can't afford to ignore either the Android or iOS ecosystem. They have to release for both, so there's no real competition involved.

Monopoly status is not as simple as 'do you have 51%'

I think the argument is, you can always go use an Android phone if you don't like the iPhone.

Apple has a monopoly on its app-store the same way Amazon has a monopoly on what (and how) it sells on AWS for services.

There are a ton of competing app stores, the fact that you can't access them on an iPhone means nothing. Apple made a platform, they have every right to set the rules. Don't like it go somewhere else there are plenty of other choices.

"Apple made a platform, they have every right to set the rules. Don't like it go somewhere else there are plenty of other choices." is not necessarily sound reasoning here. US telecoms were broken up as a monopoly even though they made the platform and had every right to set the rules. "go somewhere else" implies buying a new phone, potentially under contract, and smartphones aren't cheap.

Reading the announcement post on HN: "This will surely piss of Google and Apple"...

Then I read the title to this post... directly under it.

What a day

In all this dick-measuring, the people that lose out are the consumers.

Apple maintaining a stupid and unjustifiable premium forced higher prices.

Companies retaliating with this sort of posturing from Epic forces App Store removals and worse.

Epic are hypocrites. Apple are greedy. I’ll back the horse that’s neither

This is about nothing, folks.

Literally.

Epic sells usage ("v-bucks") which would cost them nothing to supply 'unlimited'.

Apple, having a standard of "in-app sales, we get 30%", wants their cut of making a bundle via the Apple ecosystem.

This is one of the games Apple likes to “feature” regularly. They basically strongly encouraged people to buy this game one week, and yanked it from the store the week after. The game “owners” should be livid.

It's like you're dating a hot girl and you like showing her off. Then you find out the next week she cheated on you then you dump her. Wouldn't you do the same thing in Apple's position?

If any company then I think Tencent has the money and will to bring Apple to the court (they have 40% share in Epic). And won't be surprised if this will be a new chapter in the US v China trade fight.

So, what is Epic's plan?

I have to assume they fully expected removal. So they must have some next step in mind.

Some kind of legal action? A complaint to regulators or a lawsuit? Are either of those likely to work?

Might be as simple as "let our players do the talking" since Fortnite has a huge audience and many of the players are really passionate.

Apple has more cash stockpiled than most companies on Earth, I think they’ll survive the fallout of Fortnite gamers.

https://twitter.com/FortniteGame/status/1293994211621167105

They absolutely expected this.

Boy am I glad I use Android instead. Never used an Apple product before and if things are like this I don't see why I should.

Is it time for Epic to invest in the PinePhone?

Well that was expected and was quick wasn't it?

Unfortunately Apple's the sherrif in the app store and doesn't give a damn.

Unreal.

Remarkable that TikTok is still available on the App Store, despite the risk it poses to national security. I guess Apple and China sleeping together is truly a case of friends with benefits. Maybe Epic Games should please Apple more often?

Epic games kind of Tencent (a Chinese company) subsidiary, it has 40% share.

There are about 5 times as many TikTok users as Fortnite players. I suppose that is a part of the calculation as well.

Also, perhaps I’m mistaken, but the majority of Epic Games is owned by Tim Sweeney. Meanwhile, TikTok majority is owned by ByteDance, which I don’t think we can confidently believe is truly a separate, sovereign entity from the CPC. And all this is somewhat besides the point; Apple is clearly more dependent on TikTok (China) than Epic Games.

I sometimes wonder why app makers don't "unionize", to collectively threaten to boycott the Apple ecosystem, to pressure Apple into reducing its cut. An iPhone without apps is much less valuable than an iPhone with apps.

Lmao

[insert michael jackson popcorn meme]

AWESOME. Fortnite not following rules = good riddance. I don't want 528925 apps with different payment platforms and rules.

Saying the App Store is a monopoly every chance you get doesn’t mean it actually is.

And vice versa: saying it isn't doesn't mean it actually isn't. Opinions are unproductive to discuss without reasoning attached.

This is a highly technical forum so I really think all of the "Apple is within their rights to determine what software users can run" folks should think about how they would feel if Windows could only run software that Microsoft publishes. Are you okay with that? Does the fact that Linux exists make this okay? It sounds like the answer from a lot of people is "Yes, of course" which baffles me.

It doesn't take much imagination to see how different the world would be if a single corporation decided what software was allowed to be used by society. Anything that is the least bit controversial wouldn't exist. Napster, Torrents, Emulators etc are obvious and people would no doubt argue they shouldn't exist anyway, but I imagine even web browsers themselves (Apple already doesn't allow them on iOS), networking tools like IPFS, game streaming services (also banned by Apple), etc just wouldn't exist in that world. I could go on with examples but that's the point, there's a LOT of creativity and complexity out there and it's impossible for a single gatekeeper to do a good job of deciding what has a right to exist.

My post is being downvoted and I have no idea why. I didn't say anything against the rules and wasn't being annoying I don't think. I guess this topic is too political for discussion.

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