Epic Games has taken legal action in the Federal Court of Australia to end the
anti-competitive restrictions on mobile device marketplaces imposed by Apple and Google. For more information, read on! You can also check out our court filings here and here and press releases here and here.
Epic is also participating in the Australian competition regulator’s review of mobile app marketplaces. We argue consumers and developers need an environment that encourages choice, innovation and value. Read more in our submission.
Why We Fight
Epic gave Fortnite players on iOS and Google Play a choice between Apple/Google payment and Epic direct payment, passing on savings to direct purchasers. Apple and Google retaliated by blocking Fortnite updates. If Apple had not been restrained by court action, it also threatened to prevent Epic from creating software for all Apple devices — not just on Fortnite but all of our games, and Unreal Engine too.
Apple demanded that Epic revert Fortnite to exclusively use Apple payments. Their proposal was an invitation for Epic to collude with Apple to maintain its monopoly over in-app payments on iOS, suppressing free market competition and inflating prices. As a matter of principle, we refused to do so.
You, as a mobile device owner, have the right to install apps from sources of your choosing. Software makers have the right to freely express their ideas and to compete in a fair marketplace. Apple’s policies take these freedoms away.
Apple’s policies are so restrictive that they block gaming services like Microsoft xCloud, NVIDIA GeForce NOW, and Google Stadia from existing on iOS. Apple’s policies would have even blocked the World Wide Web if it had been invented after the iPhone, because Apple policies disallow running code not reviewed by Apple, accepting payments directly from customers, and accessing content not reviewed by Apple — all fundamental features of the web. These policies, together with Apple’s chilling enforcement strategy, directly impede innovation and invention of entirely new kinds of apps, games, and businesses.
Epic is one of the many game developers who has long worked to advance better and fairer platform practices, such as cross-platform gameplay, communication, accounts, and items in Fortnite across all platforms. We are committed to securing lasting freedoms for all. This is why we fight.
Why are players blocked by Apple and Google from updating Fortnite?
After we added direct Epic payments to save players up to 20%, Apple and Google retaliated by blocking Fortnite players from installing and updating the game through the App Store and Google Play. Apple and Google demand that game developers use their payment processing service, which charges an exorbitant rate of 30%. Apple and Google block developers from using more efficient payment methods such as Mastercard (including Apple Card), Visa, and PayPal, which charge rates of 2.5% to 3.5%, and therefore prevent developers from passing the savings on to customers.
Why shouldn't Apple and Google collect 30% on App Store and Google Play sales? Aren't they providing the store where developers sell software?
Apple intentionally locks down consumer iOS devices to prevent users from installing software directly from developers, as consumers are free to do on PC and Mac. We know this is an intentional strategy because iOS does fully support installing software from the web -- but only allows it for corporations. Apple uses this direct-installation blockade in order to force consumers to use their App Store, and then demands that game developers use their payment processing service. By blocking consumer choice in software installation, Apple has created a problem so they can profit from the solution.
Google’s strategy is distinct: Google advertises Android as an open platform, and Android devices support installation of third party software such as Fortnite and the Epic Games App from the web. However, Google obstructs software installation and updates with scary warning screens that place third party software sources at a disadvantage to Google Play, and uses its Google Apps suite contracts with carriers to obstruct pre- installation of competing stores on Android smartphones. As a result, Google Play has a vast majority of Android store market share in territories where it’s available.
What outcome does Epic hope for to resolve this blockade from both Apple and Google?
Epic’s position is that all mobile developers and consumers have the right to choose alternate payment providers that charge less, as is the norm on all other general-purpose computing platforms, including Web, Windows, and Mac. We expect to see a general change in smartphone practices industry-wide for all developers that bring greater value and freedom of choice to consumers. We expect Apple and Google to unblock Fortnite.
Do Apple and Google block all apps from processing direct payments?
No. Apple and Google allow thousands of apps on the App Store and Google Play to accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, and StubHub. Apple and Google are just blocking direct payments for certain products (like games) and companies (like Epic).
Epic believes that all mobile users have a right to save money using more efficient purchasing options. Adding our own payment system allows us to offer players choice while passing along savings, just like other apps are allowed to do. This choice provides a more level playing field on mobile stores while saving players money, which Apple and Google should agree is a positive thing for everyone!
Does a new payment method on mobile mean purchases there are less safe?
No. In operating Fortnite on open platforms and operating the Epic Games Store, Epic has processed over $1,600,000,000 of direct payments successfully, and uses industry-trusted encryption and security measures to protect customer transactions.
Clearly Apple and Google acknowledge that third-party payment services are safe and acceptable for goods and services. Epic direct payment simply offers players the same kinds of payment options as these other apps.
Why don't you offer purchases outside of the app, as Netflix did with their subscriptions?
This is a user-unfriendly solution. Apple even prohibits apps like Netflix from telling customers how to pay for their subscription services outside of the app. Epic wants to give all customers simple, in-app purchasing options free of obstruction.
Why doesn’t Epic capitulate to Apple and Google's demand to remove Epic direct payment?
We have chosen to fight Apple and Google's policies on behalf of all consumers and their right to have access to more efficient payment methods and to receive the best prices available.
Apple and Google are monopolists and standing up to them is a necessary step to free consumers and developers from the unlawful restrictions Apple and Google have imposed over app distribution and in-app payment processing on iOS and Android.
Apple and Google have rules. Why is Epic expecting an exception to those rules?
We don't seek a special exception for Epic. We firmly believe both Apple and Google's policies must be changed for all developers. For over a decade, Apple and Google have crafted and proliferated a tangled web of rules and policies to impose a 30% tax on apps while preventing competitors from offering a better deal. That’s around 10x more than what a typical transaction may cost on competing payment processing services such as Visa, Mastercard, and PayPal, which charge rates of 2.5% to 3.5%. When competition is stifled, the customer always loses.
Their rules are designed to cement their monopolies, to limit consumer choice, and to stifle competition in digital goods specifically. Apple and Google don't force customers to use their payment system to add 30% to the price of their dinner when they purchase a meal through Grubhub or DoorDash. Apple even allows Amazon Prime Video to process payments directly as a special deal while holding other apps to a different standard. So why do customers have to use Apple and Google's payment services and increase their prices to pay a 30% app tax for games such as Fortnite? There’s no good reason.
About Epic Games
Founded in 1991, Epic Games is an American company founded by CEO Tim Sweeney. The company is headquartered in Cary, North Carolina and has more than 40 offices worldwide. Today Epic is a leading interactive entertainment company and provider of 3D engine technology. Epic operates Fortnite, one of the world’s largest games with over 350 million accounts and 2.5 billion friend connections. Epic also develops Unreal Engine, which powers the world’s leading games and is also adopted across industries such as film and television, architecture, automotive, manufacturing, and simulation. Through Unreal Engine, Epic Games Store, and Epic Online Services, Epic provides an end-to-end digital ecosystem for developers and creators to build, distribute, and operate games and other content.