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Friday, June 18, 2021

Explained: How Apple vs Epic Games suit could alter app ecosystem

The outcome of this case, should Apple lose, could bring in sweeping changes to how the booming App Store functions, and even set legal precedents for Google’s Play Store.

Written by Pranav Mukul , Edited by Explained Desk | New Delhi |
Updated: May 18, 2021 8:04:48 am
There are mainly three changes that Epic Games is seeking in the App Store policies.

Epic Games, the developer of popular video game Fortnite, has taken iPhone maker Apple to the court in a battle over the latter’s App Store policies. The outcome of this case, should Apple lose, could bring in sweeping changes to how the booming App Store functions, and even set legal precedents for Google’s Play Store.

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What has happened so far?

Apple mandates apps installed on its mobile devices to be done from its App Store. It also mandates all in-app payments to go through its own payment processing system, wherein it charges a 30% fee to the developers. Last year, Epic Games intentionally broke this rule and established its own payment processing system on Fortnite’s iPhone app. This led to Apple taking down the game from the App Store. Soon, Epic Games filed a lawsuit against Apple in the US District Court of Northern California terming the company anti-competitive.

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What is Epic Games seeking?

There are mainly three changes that Epic Games is seeking in the App Store policies. Firstly, it wants the ability to have an alternative payments processing system for in-app purchases. This could potentially mean billions of dollars in revenue being erased for Apple gained from the 30% fee it charges many developers. To add to this, Apple also prohibits developers from advertising to consumers a way to make payments from outside the device ecosystem, where, for example, they may get a better deal. Epic Games wants to be able to tell its users that there are alternate ways of paying for their purchases. And lastly, in its most radical demand, Epic Games wants users to have the ability to install apps by sidestepping the App Store.

Are there broader implications to this case?

Yes. The app ecosystem is a booming revenue stream for platforms such as Apple and Google, which run the most prominent app stores. Even in the European Union, Swedish music streaming app Spotify had filed a complaint against Apple for imposing unfair policies — and the bloc’s regulators accused Apple of violating its antitrust law as a result of this. Regulators in Brussels are also investigating other big US tech companies like Amazon and Google, amid a growing global movement to rein in their power. Even in India, apps have led a campaign against Google’s Play Store policies of the fee it charges the developers to access its platform.

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