Ap­ple fac­ing court bat­tle with Fort­nite maker Epic

The Daily Telegraph - Business - - Front Page - By James Tit­comb in San Fran­cisco and Matthew Field

THE maker of one of the world’s big­gest video games has launched a blockbuste­r law­suit against Ap­ple as frus­tra­tion mounts over com­mis­sion fees on its App Store.

Epic Games last night ac­cused Ap­ple of “at­tempt­ing to con­trol mar­kets, block com­pe­ti­tion and sti­fle in­no­va­tion” af­ter its ex­cep­tion­ally pop­u­lar game, Fort­nite, was re­moved from the App Store. The move rep­re­sents a new chal­lenge to Ap­ple’s strict man­age­ment of the store, which is the only way that soft­ware can be in­stalled on the iPhone and that gen­er­ates bil­lions of dol­lars for the com­pany each year.

The App Store is com­ing un­der in­tense scru­tiny, with de­vel­op­ers speak­ing out against the com­pany and reg­u­la­tors in the US and EU in­ves­ti­gat­ing the com­pany.

Epic’s law­suit de­mands that Ap­ple cease what it called the com­pany’s “anti-com­pet­i­tive con­duct” and asks that its be­hav­iour be de­clared il­le­gal.

Ap­ple re­quires de­vel­op­ers that pub­lish apps on its store to fol­low strict rules. Apps that want to sell dig­i­tal goods, such as game up­grades, within the app must use Ap­ple’s pay­ments ser­vice, with the iPhone maker tak­ing a cut of up to 30pc.

These sales have be­come an im­por­tant part of Ap­ple’s rev­enue as sales of its iPhone have slowed, but de­vel­op­ers have com­plained that they are un­fair.

Yes­ter­day, Fort­nite, which has more than 350m reg­is­tered play­ers, be­gan al­low­ing gamers to by­pass Ap­ple’s pay­ment method, of­fer­ing dis­counts of up to 20pc for its in-game cur­rency if peo­ple paid with a credit card or PayPal.

“Cur­rently, when us­ing Ap­ple and Google pay­ment op­tions, Ap­ple and Google col­lect a 30pc fee, and the up to 20pc price drop does not ap­ply. If Ap­ple or Google lower their fees on pay­ments in the fu­ture, Epic will pass along the sav­ings to you,” the firm said.

The move prompted Ap­ple to re­move Fort­nite from the store, claim­ing Epic had pur­pose­fully bro­ken its rules.

“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,” a spokesper­son said.

“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.”

Im­me­di­ately af­ter Fort­nite was re­moved, Epic filed a law­suit in Cal­i­for­nia against Ap­ple. “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,” the law­suit said. It claims that Ap­ple’s rules such as its pay­ment de­mands are an abuse of its con­trol over iPhone app dis­tri­bu­tion.

Ap­ple’s chief ex­ec­u­tive Tim Cook has long in­sisted that Ap­ple’s mi­nor­ity share of the global smart­phone mar­ket means it is not a mo­nop­oly, and the com­pany re­cently re­leased re­search ar­gu­ing that its fees are not out of line with the rest of the in­dus­try.

Ap­ple is un­der in­ves­ti­ga­tion in the EU fol­low­ing a com­plaint from Spo­tify, which al­leges that the App Store fees make it dif­fi­cult to com­pete with the Ap­ple Mu­sic stream­ing ser­vice, and a com­mit­tee of the US Congress is in­ves­ti­gat­ing as part of a broad in­quiry into large tech com­pa­nies.

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