Why Epic v. Apple Ruling Isn’t a Win for Either Tech Player
A California judge ruled last week that Apple was within its rights to boot Epic Games from the App Store for violating its contract when the latter company directed users of “Fortnite” to an alternate payment system for in-game purchases. But Apple was also ordered to end this practice and allow developers to utilize buttons and external links within their apps and metadata that “direct customers to purchasing mechanisms.”
While a definite win for third-party developers looking to boost their revenue streams from their apps, as Apple typically takes 30% of in-app purchases, this is not an optimal outcome for Apple or Epic, with the latter already filing to appeal the decision.
It’s obvious why Epic isn’t happy.
Early in the initial court proceedings, Epic’s private financials were leaked, confirming the obvious: Epic makes a lot of money from “Fortnite.”
But while “Fortnite” is available on a multitude of non-mobile platforms, mobile is what’s been propelling games globally, now comprising more than half the earnings of a market expected to surpass $200 billion in 2023, per Newzoo.
As diverse as the video games market has become, the mobile sector is still heavily dependent on dominant companies, and the court did not rule Apple an illegal monopoly nor did it seek to change the 30% taken from third parties on the App Store. If a company as big in gaming as Epic can’t emerge victorious from such a case, it’s an omen for other companies looking to drive a dent into Apple’s hold of the gaming sector.
But while Apple and Google command such vast chunks of global gaming revenue, that’s obviously just one of their revenue streams, and scrutiny over their policies pertaining to third-party developers goes beyond video games.
At the end of August, South Korea’s National Assembly approved the passage of what’s been dubbed its Anti-Google law. Similar to the ruling in Epic v. Apple, the law prohibits Google and Apple from blocking alternative in-app payment methods arranged by third-party developers.
South Korea’s move on regulating in-app payment policies further extended to Australia, whose government is considering similar legislation for Apple, Google and Tencent’s WeChat with a focus on their respective payment services, such as Apple Pay.
Plus, South Korea’s antitrust regulator has fined Google $177 million for blocking the customization of its Android operating system for mobile phones, citing anti-competitive practices that prevented device developers from launching new products on schedule in an electronics space where Korean natives Samsung and LG lead.
While the Apple ruling stateside may seem like nothing more than a slap on the wrist to mobile game developers, it still ties into global attempts to bring a stronger sense of regulatory control over companies whose market command scales multiple sectors.
Epic may remain a mobile casualty of such endeavors, but the App Store and its counterparts certainly aren’t out of the regulatory woods anytime soon.