13 ms·

This clearly and unambiguously crosses the line into abuse of market power. Apple's actions before? Maybe? Sort of? Apple needed that 30 percent cut to monitor

This clearly and unambiguously crosses the line into abuse of market power. Apple's actions before? Maybe? Sort of? Apple needed that 30 percent cut to monitor for fraud and quality or something, going above-and-beyond other payment processors. This? This has absolutely no basis in anything. It's simple retaliation designed to kneecap Epic from Apple's dominant control of a market. Apple can refuse to let Epic release games, without stopping Epic's Apple development dead in its tracks. That accomplishes all reasonable business purposes.

deleted 6y ago
[deleted]
tonyedgecombe 6y ago
This clearly and unambiguously crosses the line into abuse of market power. Epic is taking them to court. What did they expect, a nice thank you and a pat on the head.
- serioussecurity 6y ago
  You don't get to use retaliatory behavior to discourage lawsuits, in this form, especially as a service provider. If they wanted to sue Epic back over frivolous patent violations, they're allowed, but if you're going to engage in retaliatory behavior you can't do it in a way that violates your own ToS.
  - spzb 6y ago
    It's not retaliation although that's how Epic are trying to portray it. It's a straightforward breach of contract on Epic's part and Apple are invoking the termination clause.
  - danudey 6y ago
    Apple has terms and conditions for developer accounts, which, if broken, result in account termination. Epic agreed to, and then broke, those terms and conditions. This results in account termination. I'm not sure how this is retaliatory behavior. If I had an app and snuck violations into my app to get past review, then had my app removed, then instantly released a PR campaign and filed a lawsuit, I think it would be pretty clear to most people that: 1. I broke the rules and having my account terminated is the obvious result. 2. I didn't break the rules accidentally, but instead broke them very deliberately. 3. I am not interested in discussing this through normal channels, and instead broke the rules to get my app removed as a PR power play so that I would look like the good guy. That's what happened here. Epic sneaking the IAP workaround into their app shows they broke the rules; Epic filing a lawsuit and launching a PR campaign instantaneously shows that they broke the rules deliberately, knowing the consequences, and are not interested in following the App Store T&C. Doing anything other than closing their developer accounts would be preferential treatment that other developers are unlikely to get in the same situation. Whether you agree with the rules or not (Epic obviously doesn't), according to the terms and conditions Apple is doing the correct and obvious thing.
    - dade_ 6y ago
      Terms and conditions can say whatever they want, but illegal terms in a contract are not binding. The problem is that this type of dispute usually takes years to litigate, so I have to think there is much more to this strategy.
TylerE 6y ago
Companies shouldn't be allowed to fire customers that blatantly break rules the customer agreed to?
- chrisacky 6y ago
  Of course they should. But, market dominance means agreement to such terms are not 'fair'.
  - TylerE 6y ago
    Yes, total market dominance with 10% market share.
    - uncoder0 6y ago
      In the US?
    - bryanlarsen 6y ago
      60% market share by revenue in 2019. https://www.businessofapps.com/data/app-revenues/ https://www.businessofapps.com/data/app-revenues/
      - baddox 6y ago
        Isn't that just because Apple's customers are more willing to spend money on apps than other customers?
        ayoisaiah 6y ago
        Willing is not the right word. They generally have a greater means to do so.
        baddox 6y ago
        Of course. My point is that this doesn't seem to be related to any anticompetitive behavior on Apple's part. If Apple was using market power to force smartphone competitors out of the market to increase Apple's own market share, that would be one thing. But to accuse Apple of anticompetitive behavior because their small smartphone market share spends more money on apps than other smartphone owners does not seem reasonable.
elicash 6y ago
I personally thought they were already in abuse of market power. But on this latest development, I want to hear Apple's argument first. That said, I didn't find their argument on the first action compelling so not optimistic. But maybe they discovered some abuse, for one random, made-up example -- my point isn't to trust Apple but just to see what the reasoning is first. This tweet doesn't say if they were given any reasoning for the latest action.
- mrgordon 6y ago
  Yeah to be honest while I think Apple clearly has monopoly power here that should be reined in, I also get the feeling that Epic will have a pretty weak argument for why they purposely violated the Terms of Service and then expect to continue using the SDK tools.
  - elicash 6y ago
    I'll still be on Epic's side if they didn't violate the terms AFTER Apple removed their app. But if they, for example, tried to upload another app or something then Apple would then of course need to remove their access. (I'm not REALLY on ANYBODY's side here. But I think App Store rules are unjust and bad for users and that Apple will lose this fight despite being able to take any losses financially for as long as they wish.)
  - hrktb 6y ago
    If you argue a company doesn’t allow behavior X, doing it and getting punished is the best course of action to prove the point. To your point, they have a whole lawsuit filling explaining why they think X should be allowed.
    - mrgordon 6y ago
      According to the law, the best course of action is not to break the law to prove you don't like the law. While the Terms of Service are not the law, you agree to follow them when signing up and the terms didn't change after Epic signed up. Practically, you may be correct that this is the most expedient way to try to fix the problem but you can get burned as Epic has in the short term with a sharp drop in revenue as Apple & Google have both booted them and may refuse to work with them in the future.
Bud 6y ago
On the contrary, there is a very solid basis. Epic has access to Apple's platform and dev tools because it has (or had) an agreement with Apple whereby it paid a percentage of profits earned in exchange for said access. Epic, btw, has the exact same kind of agreement with Sony, Microsoft, and Google, for access to their gaming platforms. All three of those companies are extracting the same 30% fee that Apple is. But now Epic has decided to grandstand and pretend that Apple has a "monopoly" and protest paying Apple, while still happily paying the exact same fees to its other gaming partners, including to Sony (for PlayStation), which just invested $250M in Epic. So to say that there is "absolutely no basis" for Apple's action just isn't true.
- thedz 6y ago
  > Epic, btw, has the exact same kind of agreement with Sony, Microsoft, and Google, for access to their gaming platforms. All three of those companies are extracting the same 30% fee that Apple is. You don't have to agree to Epic's terms to access the platforms from Sony, MS and Google. You do, however, have to agree to Apple's terms to access their Platform.
  - Bud 6y ago
    Nitpicking, and I'm not even sure that's correct. Regardless, it's not relevant. What Epic is griping about here is the 30% fee, but they're not acting or speaking in good faith about that. They're pretending that fee is somehow onerous, but they pay that exact same fee to every other platform, too.
    - m-p-3 6y ago
      The Epic Games Store takes a 12% commission on all games sales though. https://variety.com/2019/gaming/news/tim-sweeney-epic-games-store-1203195452/ https://variety.com/2019/gaming/news/tim-sweeney-epic-games-... And I'm sure they're not happy about the fees on other platforms, but they can't fight everyone at once.
    - sushid 6y ago
      They can believe that many actors are injust but can be simply choosing their battles. And phones > consoles in terms of impact. They're also less arbitrary about which purchases take a 30% cut or not compared to phones.
Razengan 6y ago
> Apple needed that 30 percent cut to monitor for fraud and quality or something, going above-and-beyond other payment processors. How much do Microsoft, Sony, Nintendo, Steam, Gog and etc. take from publishers on their stores?
- tsieling 6y ago
  Roughly the same, I think the variance is about 10% with Steam being an outlier working in tiers tied to revenue. At least one allows developers to name the cut (including 0%) but 30% is the most common number.
- ghostpepper 6y ago
  This is a valid question - if the answer is a fraction of what Apple charges then it strengthens the case against Apple.
  - objclxt 6y ago
    It’s the same. Microsoft, Sony, and Nintendo all charge 30%. https://www.ign.com/articles/2019/10/07/report-steams-30-cut-is-actually-the-industry-standard https://www.ign.com/articles/2019/10/07/report-steams-30-cut...
  - Razengan 6y ago
    > if the answer is a fraction of what Apple charges then it strengthens the case against Apple. The answer is the same. What now? Will you put down the pitchforks?
    - ghostpepper 6y ago
      My comment was actually intended to play a bit of devil's advocate - I'm not convinced that Apple has a monopoly, and I kind of don't mind living in the walled garden.
- coldpie 6y ago
  It's all private, of course, but they're all generally in the 30% ballpark. There may be lower rates for big clients, but there's no way for us to know that. https://arstechnica.com/gaming/2020/08/as-epic-attacks-apple-and-google-it-ignores-the-same-problems-on-consoles/ https://arstechnica.com/gaming/2020/08/as-epic-attacks-apple...
pjc50 6y ago
The thing is, this starts the taxi meter running; every dollar that Epic would have expected to make will get added to their demand for damages.
- sushid 6y ago
  Source? They specifically state that they're not suing for damages and I doubt they have changed their case in the last few days... > Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. https://cdn2.unrealengine.com/apple-complaint-734589783.pdf https://cdn2.unrealengine.com/apple-complaint-734589783.pdf
  - pjc50 6y ago
    That's in the middle of the document, but at the end: > C.Awarding any other equitable relief necessary to prevent and remedy Apple’s anti-competitive conduct;and > D.Granting such other and further relief as the Court deems just and proper It's also totally normal for a course of action that was deemed unlawful and resulted in losses for one party to be compensated. Anyway, we have a decade or so to find out; these cases are not quick.
    - dragonwriter 6y ago
      Only D is arguably on point, and probably wouldn't reverse a statement in the same filing that they are specifically not seeking a specified class of damages, instead it basically keeps open anything not specifically excluded tomwhich they might be entitled; equitable relief as mentioned in C is a legal term of art that does not overlap with money damages, so that certainly cannot be read as a claim for money damages.
quotha 6y ago
So, Epic should get special treatment? They don't have to pay the fees? Just everyone else? How is apple supposed to run the app store? They kinda know what they are doing or why else would so many people buy their iphones?
- mcintyre1994 6y ago
  Their app isn't on the store, so no they shouldn't pay fees beyond whatever Apple charge for the privelege of being a developer on their platform. Not sure why not paying App Store fees (because of not having an app on the store) would justify removing access to all developer accounts and tools.
  - quotha 6y ago
    Well it used to be dude, that is the whole situation here.
- smilekzs 6y ago
  No one should have to pay 30% as long as Apple also competes in the same "marketplace".
- gruez 6y ago
  > They kinda know what they are doing or why else would so many people buy their iphones? Or maybe it's something that people merely tolerate. Kind of like how ISPs are almost universally derided in the US for crappy service and high prices, yet everyone seems to be paying for their serivece. If you asked people when they're buying an iphone whether they want 30% of app and in-app purchases to go to apple, with no way around it, how much % of them would say yes?
  - quotha 6y ago
    Yes I see that, and you can apply that to all sorts of things in our lives. It’s still arbitrary where the line is that keeps everyone happy, I guess Epic thinks it’s < 30% but I am just not with them on this fight
kmeisthax 6y ago
The thing is, Apple probably isn't the only one to do this. Apple is actually very graceful by the standards of platforms. Note that Epic did not attempt to surreptitiously introduce a "direct payment" feature into Microsoft, Sony, or Nintendo platforms. That's because you don't even get developer documentation without signing an NDA. Had Epic even thought about doing this on console, the question wouldn't be "will the console manufacturers retaliate", as much as it would be "how many months until the console manufacturers start banning new game submissions that use Unreal Engine"? Apple did this before, BTW. Remember "Thoughts on Flash"? That wasn't Jobs railing against an aging browser plugin. Adobe had figured out how to get Flash to export iOS apps, and that really pissed off Jobs. So it was really Jobs attacking a strawman (the buggy Flash Player) in order to justify banning all third-party development tools. The FTC threatened to sue and the rule was removed about 3 months later.

deleted 6y ago

[deleted]

tonyedgecombe 6y ago

This clearly and unambiguously crosses the line into abuse of market power. Epic is taking them to court. What did they expect, a nice thank you and a pat on the head.

serioussecurity 6y ago
You don't get to use retaliatory behavior to discourage lawsuits, in this form, especially as a service provider. If they wanted to sue Epic back over frivolous patent violations, they're allowed, but if you're going to engage in retaliatory behavior you can't do it in a way that violates your own ToS.
- spzb 6y ago
  It's not retaliation although that's how Epic are trying to portray it. It's a straightforward breach of contract on Epic's part and Apple are invoking the termination clause.
- danudey 6y ago
  Apple has terms and conditions for developer accounts, which, if broken, result in account termination. Epic agreed to, and then broke, those terms and conditions. This results in account termination. I'm not sure how this is retaliatory behavior. If I had an app and snuck violations into my app to get past review, then had my app removed, then instantly released a PR campaign and filed a lawsuit, I think it would be pretty clear to most people that: 1. I broke the rules and having my account terminated is the obvious result. 2. I didn't break the rules accidentally, but instead broke them very deliberately. 3. I am not interested in discussing this through normal channels, and instead broke the rules to get my app removed as a PR power play so that I would look like the good guy. That's what happened here. Epic sneaking the IAP workaround into their app shows they broke the rules; Epic filing a lawsuit and launching a PR campaign instantaneously shows that they broke the rules deliberately, knowing the consequences, and are not interested in following the App Store T&C. Doing anything other than closing their developer accounts would be preferential treatment that other developers are unlikely to get in the same situation. Whether you agree with the rules or not (Epic obviously doesn't), according to the terms and conditions Apple is doing the correct and obvious thing.
  - dade_ 6y ago
    Terms and conditions can say whatever they want, but illegal terms in a contract are not binding. The problem is that this type of dispute usually takes years to litigate, so I have to think there is much more to this strategy.

TylerE 6y ago

Companies shouldn't be allowed to fire customers that blatantly break rules the customer agreed to?

chrisacky 6y ago
Of course they should. But, market dominance means agreement to such terms are not 'fair'.
- TylerE 6y ago
  Yes, total market dominance with 10% market share.
  - uncoder0 6y ago
    In the US?
  - bryanlarsen 6y ago
    60% market share by revenue in 2019. https://www.businessofapps.com/data/app-revenues/ https://www.businessofapps.com/data/app-revenues/
    - baddox 6y ago
      Isn't that just because Apple's customers are more willing to spend money on apps than other customers?
      - ayoisaiah 6y ago
        Willing is not the right word. They generally have a greater means to do so.
        baddox 6y ago
        Of course. My point is that this doesn't seem to be related to any anticompetitive behavior on Apple's part. If Apple was using market power to force smartphone competitors out of the market to increase Apple's own market share, that would be one thing. But to accuse Apple of anticompetitive behavior because their small smartphone market share spends more money on apps than other smartphone owners does not seem reasonable.

elicash 6y ago

I personally thought they were already in abuse of market power. But on this latest development, I want to hear Apple's argument first. That said, I didn't find their argument on the first action compelling so not optimistic. But maybe they discovered some abuse, for one random, made-up example -- my point isn't to trust Apple but just to see what the reasoning is first. This tweet doesn't say if they were given any reasoning for the latest action.

mrgordon 6y ago
Yeah to be honest while I think Apple clearly has monopoly power here that should be reined in, I also get the feeling that Epic will have a pretty weak argument for why they purposely violated the Terms of Service and then expect to continue using the SDK tools.
- elicash 6y ago
  I'll still be on Epic's side if they didn't violate the terms AFTER Apple removed their app. But if they, for example, tried to upload another app or something then Apple would then of course need to remove their access. (I'm not REALLY on ANYBODY's side here. But I think App Store rules are unjust and bad for users and that Apple will lose this fight despite being able to take any losses financially for as long as they wish.)
- hrktb 6y ago
  If you argue a company doesn’t allow behavior X, doing it and getting punished is the best course of action to prove the point. To your point, they have a whole lawsuit filling explaining why they think X should be allowed.
  - mrgordon 6y ago
    According to the law, the best course of action is not to break the law to prove you don't like the law. While the Terms of Service are not the law, you agree to follow them when signing up and the terms didn't change after Epic signed up. Practically, you may be correct that this is the most expedient way to try to fix the problem but you can get burned as Epic has in the short term with a sharp drop in revenue as Apple & Google have both booted them and may refuse to work with them in the future.

Bud 6y ago

On the contrary, there is a very solid basis. Epic has access to Apple's platform and dev tools because it has (or had) an agreement with Apple whereby it paid a percentage of profits earned in exchange for said access. Epic, btw, has the exact same kind of agreement with Sony, Microsoft, and Google, for access to their gaming platforms. All three of those companies are extracting the same 30% fee that Apple is. But now Epic has decided to grandstand and pretend that Apple has a "monopoly" and protest paying Apple, while still happily paying the exact same fees to its other gaming partners, including to Sony (for PlayStation), which just invested $250M in Epic. So to say that there is "absolutely no basis" for Apple's action just isn't true.

thedz 6y ago
> Epic, btw, has the exact same kind of agreement with Sony, Microsoft, and Google, for access to their gaming platforms. All three of those companies are extracting the same 30% fee that Apple is. You don't have to agree to Epic's terms to access the platforms from Sony, MS and Google. You do, however, have to agree to Apple's terms to access their Platform.
- Bud 6y ago
  Nitpicking, and I'm not even sure that's correct. Regardless, it's not relevant. What Epic is griping about here is the 30% fee, but they're not acting or speaking in good faith about that. They're pretending that fee is somehow onerous, but they pay that exact same fee to every other platform, too.
  - m-p-3 6y ago
    The Epic Games Store takes a 12% commission on all games sales though. https://variety.com/2019/gaming/news/tim-sweeney-epic-games-store-1203195452/ https://variety.com/2019/gaming/news/tim-sweeney-epic-games-... And I'm sure they're not happy about the fees on other platforms, but they can't fight everyone at once.
  - sushid 6y ago
    They can believe that many actors are injust but can be simply choosing their battles. And phones > consoles in terms of impact. They're also less arbitrary about which purchases take a 30% cut or not compared to phones.

Razengan 6y ago

> Apple needed that 30 percent cut to monitor for fraud and quality or something, going above-and-beyond other payment processors. How much do Microsoft, Sony, Nintendo, Steam, Gog and etc. take from publishers on their stores?

tsieling 6y ago
Roughly the same, I think the variance is about 10% with Steam being an outlier working in tiers tied to revenue. At least one allows developers to name the cut (including 0%) but 30% is the most common number.
ghostpepper 6y ago
This is a valid question - if the answer is a fraction of what Apple charges then it strengthens the case against Apple.
- objclxt 6y ago
  It’s the same. Microsoft, Sony, and Nintendo all charge 30%. https://www.ign.com/articles/2019/10/07/report-steams-30-cut-is-actually-the-industry-standard https://www.ign.com/articles/2019/10/07/report-steams-30-cut...
- Razengan 6y ago
  > if the answer is a fraction of what Apple charges then it strengthens the case against Apple. The answer is the same. What now? Will you put down the pitchforks?
  - ghostpepper 6y ago
    My comment was actually intended to play a bit of devil's advocate - I'm not convinced that Apple has a monopoly, and I kind of don't mind living in the walled garden.
coldpie 6y ago
It's all private, of course, but they're all generally in the 30% ballpark. There may be lower rates for big clients, but there's no way for us to know that. https://arstechnica.com/gaming/2020/08/as-epic-attacks-apple-and-google-it-ignores-the-same-problems-on-consoles/ https://arstechnica.com/gaming/2020/08/as-epic-attacks-apple...

pjc50 6y ago

The thing is, this starts the taxi meter running; every dollar that Epic would have expected to make will get added to their demand for damages.

sushid 6y ago
Source? They specifically state that they're not suing for damages and I doubt they have changed their case in the last few days... > Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. https://cdn2.unrealengine.com/apple-complaint-734589783.pdf https://cdn2.unrealengine.com/apple-complaint-734589783.pdf
- pjc50 6y ago
  That's in the middle of the document, but at the end: > C.Awarding any other equitable relief necessary to prevent and remedy Apple’s anti-competitive conduct;and > D.Granting such other and further relief as the Court deems just and proper It's also totally normal for a course of action that was deemed unlawful and resulted in losses for one party to be compensated. Anyway, we have a decade or so to find out; these cases are not quick.
  - dragonwriter 6y ago
    Only D is arguably on point, and probably wouldn't reverse a statement in the same filing that they are specifically not seeking a specified class of damages, instead it basically keeps open anything not specifically excluded tomwhich they might be entitled; equitable relief as mentioned in C is a legal term of art that does not overlap with money damages, so that certainly cannot be read as a claim for money damages.

quotha 6y ago

So, Epic should get special treatment? They don't have to pay the fees? Just everyone else? How is apple supposed to run the app store? They kinda know what they are doing or why else would so many people buy their iphones?

mcintyre1994 6y ago
Their app isn't on the store, so no they shouldn't pay fees beyond whatever Apple charge for the privelege of being a developer on their platform. Not sure why not paying App Store fees (because of not having an app on the store) would justify removing access to all developer accounts and tools.
- quotha 6y ago
  Well it used to be dude, that is the whole situation here.
smilekzs 6y ago
No one should have to pay 30% as long as Apple also competes in the same "marketplace".
gruez 6y ago
> They kinda know what they are doing or why else would so many people buy their iphones? Or maybe it's something that people merely tolerate. Kind of like how ISPs are almost universally derided in the US for crappy service and high prices, yet everyone seems to be paying for their serivece. If you asked people when they're buying an iphone whether they want 30% of app and in-app purchases to go to apple, with no way around it, how much % of them would say yes?
- quotha 6y ago
  Yes I see that, and you can apply that to all sorts of things in our lives. It’s still arbitrary where the line is that keeps everyone happy, I guess Epic thinks it’s < 30% but I am just not with them on this fight

kmeisthax 6y ago

The thing is, Apple probably isn't the only one to do this. Apple is actually very graceful by the standards of platforms. Note that Epic did not attempt to surreptitiously introduce a "direct payment" feature into Microsoft, Sony, or Nintendo platforms. That's because you don't even get developer documentation without signing an NDA. Had Epic even thought about doing this on console, the question wouldn't be "will the console manufacturers retaliate", as much as it would be "how many months until the console manufacturers start banning new game submissions that use Unreal Engine"? Apple did this before, BTW. Remember "Thoughts on Flash"? That wasn't Jobs railing against an aging browser plugin. Adobe had figured out how to get Flash to export iOS apps, and that really pissed off Jobs. So it was really Jobs attacking a strawman (the buggy Flash Player) in order to justify banning all third-party development tools. The FTC threatened to sue and the rule was removed about 3 months later.