Epic Goes to War With Apple Over the App Store

Thursday, 13 August 2020

You’ll forgive the pun, but Epic Games revealed an epic update to Fortnite for iOS today:

Today, we’re also introducing a new way to pay on iOS and Android: Epic direct payment. When you choose to use Epic direct payments, you save up to 20% as Epic passes along payment processing savings to you.

What costs $10 through an App Store payment costs only $8 direct from Epic. (That’s not really passing the entirety of the savings to the user — Epic nets $7 from a $10 App Store in-app purchase, but minus credit card fees nets about $7.75 from an $8 direct payment. But, from a user’s perspective, it’s a 20 percent discount.)

Epic shipped this feature via an update that was delivered entirely through the Fortnite app itself, not through a new version of the app submitted through the App Store. And yes, this entire gambit is every bit as against the rules of the App Store as you think it is. Epic did this without any permission from Apple and without giving Apple any notice.

The only question was what Apple would do. If Apple decided to play on Easy mode, their move might have been to keep Fortnite in the App Store but stop accepting updates to the app. (But again, Fortnite shipped this particular feature without submitting a new version of the app itself.) Playing on Medium difficulty, which is what Apple chose, meant removing Fortnite — an immensely popular game — from the App Store.¹

Here’s Apple’s statement, in its entirety, which they sent to multiple publications (including Daring Fireball) hours after Epic’s opening gambit:

Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users. As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.

Epic has had apps on the App Store for a decade, and have benefited from the App Store ecosystem — including it’s [sic] tools, testing, and distribution that Apple provides to all developers. 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. We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store.

It was very clear this morning that Epic knew exactly what it was doing, and how Apple was likely to respond. In very short order after Apple pulled Fortnite from the App Store, Epic filed a lawsuit, which opens guns-a-blazing:

In 1984, the fledgling Apple computer company released the Macintosh — the first mass-market, consumer-friendly home computer. The product launch was announced with a breathtaking advertisement evoking George Orwell’s 1984 that cast Apple as a beneficial, revolutionary force breaking IBM’s monopoly over the computing technology market. Apple’s founder Steve Jobs introduced the first showing of the 1984 advertisement by explaining, “it appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money…. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”

Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.

Epic’s filing wastes little time. By page 5 it reaches the point where they accuse Apple of “illegal restraints” that keep Epic from providing its own competing iOS app store:

Epic — and Fortnite’s users — are directly harmed by Apple’s anti-competitive conduct. But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool.

It’s unclear, of course, what Epic actually hopes to get from Apple, either voluntarily or forced by the courts, but they’re asking for the whole shebang: they’re claiming it is illegal for iOS not to be as open to native third-party software as the Mac.

Epic also had a new commercial queued up that makes their argument much more artfully — it’s a strident parody of Apple’s iconic “1984” spot, with the obvious but still clever title Nineteen Eighty-Fortnite. You really have to see it — Fortnite has a fun strong brand and they poured that into this. It closes with this title card:

Epic Games has defied the App Store Monopoly. In retaliation, Apple is blocking Fortnite from a billion devices. Join the fight to stop 2020 from becoming “1984”.

There’s a preaching-to-the-choir aspect to Epic’s entire campaign, though. Both the ad and the legal filing seem directed toward an audience that enjoys decals of Calvin pissing on the Apple logo. The ad is in some ways a deft parody, and it is very saucy, but one thing it is not is funny.

Epic, in a very savvy way, is waging this war as much or more in the court of public opinion as they are in any court of law. And, ultimately, Apple stands to lose more in brand equity than in dollars, no matter how this turns out.