[Update April 2021]
[Update March 2021-2]
[Update March 2021]
[Update December 2020]
[Update October 2020]
If you've been confined and away from your computer this summer, you may not have heard of one of the loudest talking points in the tech world: Fortnite has been banned from the App Store (and Google Play, but that's not relevant. .).
Since you may not know what it is, let's start from the beginning:
What is Fortnite?
Fortnite is a video game of the year 2017 developed by the company Epic Games, released as several software packages that feature different game modes, but which share the same game engine and mechanics.
Published game modes include Fortnite Battle Royale, a free game in which up to XNUMX players fight on an island, in smaller and smaller spaces due to the storm, the last survivor has won, and Fortnite: Save the World, a cooperative game for up to four players that consists of fighting against carcasses, zombie-like creatures, using objects and fortifications.
Who is Epic Games?
Epic Games, Inc. (previously Potomac Computer Systems and subsequently Epic MegaGames), is an American video game company, now associated with the Chinese company Tencent Holdings, known primarily for Unreal Engine technology, which powered their popular Unreal first-person shooter series and the Gears of War saga, as well as Fortnite. .
Founded in 1991 by Tim Sweeney, who currently serves as CEO, Epic Games is the parent company of several developers, including Chair Entertainment, Psyonix and most recently Quixel. It has also initiated studies in various countries.
The Unreal Engine game engine is marketed independently, so it underpins many games developed by other companies.
Who is Tencent Holdings?
Tencent Holdings Limited is a Chinese multinational corporation whose subsidiaries provide Internet products and services, as well as offer Internet advertising services in China.
The various services it offers are social networks, website portals, electronic commerce (e-commerce), development and distribution of video games and instant messaging services known as Tencent QQ and WeChat, in turn it is the largest internet portal and the most expensive brand in China at $ 66 billion.
In China, Tencent is like Facebook, Nintendo, Shopify, Netflix, Spotify, Slack, and PayPal, all rolled into one. Its main product, WeChat, has 1,2 billion users, and these users spend more time on the app every day than Americans spend on all added social media apps! People use WeChat to text friends, shop, read the news, play games, pay in brick-and-mortar stores ... pretty much anything that can be done with a phone can be done on WeChat (source).
Tencent has turned the profits from its lucrative social media, e-commerce and gaming ventures into a global investment portfolio that includes the world's most popular video games, China's fastest growing online businesses, and the purchase of significant stakes in Tesla, Spotify., And Snap, as well as investing in various “unicorn” startups (A unicorn is a startup with a valuation of over 1 billion dollars), behind only the venture capital firm Sequoia.
Tencent holds shares in American video game, music, transport,… companies.
You can see all of Tencent's direct investments here
Now yes, the facts
Fortnite, owned by Unreal, which in turn sold 40% to Tencent, uploads an app update to the App Store that includes its own store that does not meet the conditions: Apple must receive a commission for each sale made. run on apps downloaded from your store (the only legal way to install apps on iPhone). If the app is free, Apple doesn't charge anything.
In return for this fee, Apple handles hosting, billing processing, advertising, and provides everything needed to keep the platform relevant and attractive to the hundreds of millions of customers who use it.
Epic updates Fortnite, Apple removes it from the App Store
The fact that triggered this "rifirrafe" occurred on August 13, when Epic updated the Fortnite app with a new feature, which allowed users to pay Epic directly to purchase coins within the app at a discounted price. , instead of paying traditionally using the App Store payment mechanism. This feature allows Epic to bypass App Store rules that require payments to be made. through the App Store payment system, of which Apple collects 30% as a commission.
Commission is a non-negotiable element for the vast majority of apps, but there are some exceptions. For starters, the rule applies to digital goods, with exceptions for physical goods, such as those sold by online stores and restaurants, while subscriptions can pay a lower fee in many situations.
As we said, this change was not limited to the iOS version of the game, but was applied in the same way to the Android version, also contravening the policies and commissions of the Google Play Store.
As expected (and it's explicit in the App Store acceptance rules), Apple removed the game from the App Store for violating the App Store rules within hours of the update's appearance. As expected, Google has also removed the game from the Google Play Store, although on the Android platform the game is still available through third-party stores and directly on Epic.
Question and action in front of the gallery
On the same day the app was removed from the App Store, Epic filed a lawsuit against Apple in the Northern District of California, clarifying that they had everything planned and that they knew the consequences of their actions. They also filed another one against Google for the same reason, removing the app from the store.
Epic's lawsuit was written in an accusatory tone, arguing that Apple had become a "monster trying to control markets, block competition and stunt innovation. The argument went so far as to say that Apple's size and power "far surpassed any tech company that has had a monopoly in history."
The crucial detail of the lawsuit is that it does not attempt to discuss whether Epic was more or less violating the rules of the App Store, but rather goes against the mere existence of those rules. His objections to the rules include, in his words, "the exorbitant 30% commission for in-app purchases". It also says such policies are anti-competitive because they force developers to use the App Store. If those rules didn't exist, Epic claims it would have launched its own app store.
Epic's argument ignores the fact that Apple's App Store and its ecosystem are relatively similar to Sony's with PlayStation and Microsoft's Xbox, forcing both to use the official store, use specific payment systems and pay. a 30% transaction fee.
In the words of the CEO of Epic Games, in the case of consoles (such as PlayStation or Xbox) this commission is justified because the only way to recover the investment in the creation of the consoles is through the commission on the sales of the games.
However, despite paying the same fees, Epic did not challenge Sony or Microsoft's rules in court or letting them have their own shop.
Along with the initial lawsuit, Epic launched an "ad" parodying Apple's famous 1984 Macintosh launch, attempting to take the "battle" to the streets, creating a public opinion that would put pressure on Apple.
The phantom threat of deleting your developer accounts
On August 17, Apple moved against Epic, a fact revealed by Epic on Twitter. Epic reported that Apple had informed them that it would close all Epic developer accounts, rendering them unable to develop applications for Mac or iOS on August 28.
Epic responded by petitioning the court to temporarily prevent Apple from taking "any retaliatory action", including for the judge to prevent Apple from "removing, declassifying, denying viewing or any other method that would make Fortnite unreachable on the site." .App Store ".
For Epic, the removal of developer tools goes far beyond Fortnite, as the company supplies the Unreal engine to thousands of developers to use in their games. By being able to use developer tools to keep game elements used on macOS and iOS, it would no longer be able to support developers who have licensed the technology.
The lawsuit alleged that "Apple was attacking all Epic businesses even in unrelated areas."
Apple's first statement Apple
Apple released its first public statement on August 18, stating the facts in a simple way. In that publication, Apple argued that Epic was wrong and that "she alone had the problem."
Apple claims, and it has become a phrase management repeats as soon as it gets the chance, that the App Store "was designed to be a safe and reliable place for users and a huge business opportunity for all developers." .
Apple also recalls that Epic is "one of the most successful developers in the App Store, turning it into a billion-dollar business that reaches millions of iOS customers." He also said Apple would like to continue to keep Epic in the Apple Developer Program and its apps in the App Store.
"The problem that Epic has gotten into is easily solved by sending an update to its app that meets the standards they have accepted and that apply to all developers," concludes Apple.
In case of doubt, he concludes "We will not make an exception with Epic because we do not believe it is correct to put your business before the rules that protect users".
More shows in the gallery
Seeking to continue with the support of its users and increase Apple's rejection, Epic launched the “FreeFortnite Cup” (Copar Liberar Fortnite) tournament which started on August 23rd. The tournament offers various prizes, both digital and physical.
At the moment of truth, these actions have little impact on the state of things, and let's not forget that for every user who uses Fortnite, there are thousands who do not, so the large "mass" of Apple customers just felt a slight shock. in effect from this dispute.
You have an email. Apple presents its case and Epic responds
Apple's legal response has been strong. First, he intended to defuse Epic's argument that it was an "emergency" to issue an order that would have forced Fortnite to be brought back to the App Store.
In addition, Apple entered the emails sent by the CEO of Epico, requesting special treatment exclusive to Epic, which would have allowed them to have their own store, establishing direct payments without the need to satisfy the Apple fee.
One day before the deadline given by Apple to Epic to rectify or Fortnite will be withdrawn and Epic's developer licenses canceled, Epic files an appeal that includes a testimony from Microsoft defending the use of the Unreal engine.
Microsoft in this indictment acknowledges that it has a “corporate multi-year license agreement to use the Unreal Engine” and that it has dedicated significant resources to customizing the engine for its products, including iOS devices.
Denying Epic access to Apple's SDK and other development tools will prevent Epic from supporting Unreal Engine on iOS and macOS and will place Unreal Engine and the game creators who have developed, are developing and developing games using that technology. a considerable drawback, ”writes Microsoft.
Head to head in court: tie
On August 24, Apple and Epic confronted District Judge Yvonne Gonzalez Rogers for the first hearing of the case.
In the ruling, Epic could not prove that the removal of Fortnite from the App Store caused irreparable damage, and that on the contrary it was a situation created by Epic itself.
Apple argued that Epic's integration of direct payments was done intentionally to activate the legal springs, which Epic's lawyers have recognized as a necessary step to coerce Apple into getting involved.
Therefore, Fortnite is still out of the App Store and will continue for the foreseeable future, but Apple has been forced not to take action against the developer account of Epic Games International, responsible for the licenses of the Unreal engine.
Epic keeps kicking
On September 5, Epic made a second attempt to convince the court to force Apple to make Fortnite available for download again. In this case it has detached itself from the character of "urgent" and has simply made a request to the court.
In the petition sent by Epic, it is estimated that Apple's actions will cause "irreparable damage to Epic", as well as to countless companies and the public interest, namely the players of the game, the Fortnite community. According to the Epic document, it has seen a 60% decrease in daily activity in its iOS users.
You cannot accept rules and then skip them by saying they are unfair, but without restricting your access. The argument that they can't be on iOS because that's where the users are is so trivial that it doesn't hold up.
When Apple launched the iPhone, it had zero users and zero apps. But I had a product idea. Epic wants to enjoy the Apple mansion but without paying the rent and without accountability, keeping the rent and also charging the renters.
You may or may not accept Apple's fees, but Epic's position is indefensible. If you want to play you have to accept the rules and - in any case - try to change them from the inside.
The apple strikes again
Apple has moved away from the simple blow-response attitude and has taken action. On September 8, Apple filed a lawsuit against Epic for damages caused by the breach of contract.
In the court filing, Apple says Epic's lawsuit is "just a basic money dispute." For Epic Games, it's about the anti-competitive behavior of the App Store and protests about the fees Apple charges on every sale within the apps.
"Although Epic wants to present itself as a modern version of the Robin Hood company, it is actually a billion dollar company and does not want to pay anything for the enormous value it gets from the App Store," says Apple in its counterclaim. .
“Epic fired the first bullet in this dispute, and their willful, brazen and illicit conduct cannot go unpunished. Neither Mr. Sweeney's self-righteous (and self-interested) claims nor the scale at which Epic's business operates can justify his deliberate breach of contracts, conduct or unfair business practices. This court should force Epic to keep its contractual promises, compensate Apple with direct and compensatory damages, and prohibit Epic from maintaining this unfair style of doing business ”.
In its counterclaim, Apple adds that Epic Games has earned more than $ 600 million on the App Store. He also asks the court to try Epic for breach of contract and other minor offenses. And he also demands that the benefits he [would have gotten] be reimbursed through the direct payments Fortnite received when he activated the system within the app, as well as the prohibition for Epic to reinstall its payment system in the apps it has on the app. 'App Store.
Epic has overestimated its power and the addiction of its users
Epic certainly has a terrific product and consistent revenue stream, albeit generally based on third-party technologies and products. Without the mobile platforms, consoles, etc. Epic has nothing.
We will not say this about biting the hand of the one who feeds you, because it is not true. But perhaps they bit the hand of those who let them eat.
Swimming in the troubled waters of the antitrust investigations that the crisis is unleashing to collect new revenue, Epic thought it could exploit an alleged Apple vulnerability to try to win something.
But he has failed in his attempt to create enthusiasm, he has failed in his attempt to gain membership and has failed, at least for the time being, to get Apple to give him a lenient treatment (I think it can be ruled out that anything ever happens in that sense).
The result is that Fortnite exits the App Store and the Google Play Store, disappearing from the sight of millions of users every day. And don't get me wrong, the place of Fortnite will soon be occupied by others, such as WoW, or Secondlife, or many other products that have filled entire days of people's lives… until they have moved on. Of course they still exist today, but they are no longer relevant.
To think that people love Fortnite so much that they start a crusade on its behalf because Apple forces them to pay a fee, I don't know if it's self-centered, hallucinating or a blow in the air ... the fact is that users don't want problems and, if not they have an app, they will look for another one.
The problem for Apple: the App Store.
Undoubtedly, although this time around he may be victorious, due to his enormous size and gigantic cash reserves, which will almost be grateful if he enters a little less, it cannot be ignored that there is a problem.
You can tell you can't hear the drums, but that doesn't mean they're not playing. The old case of Spotify, struggling, essentially for the same as Epic, to obtain a more favorable treatment that allows it to equalize its balance of payments. Apple News newspapers and magazines, calling for lowering of fees, etc.
Maybe they should have done it at the height of iPhone sales, when it was clear they were getting a lot more money than they needed (which is why they started paying dividends and buying back stock). At that point they could have altered the status quo and lowered commissions, incidentally forcing everyone else to lower them as well to remain competitive. But they didn't. And now we're in the age of services, and Apple's hope of growth is in that division, so this isn't the time to lower revenues, no matter how good a public relations campaign has been for Apple.
But it's creating the feeling that Apple - rightly or not, rightly or not - is too big. And if Apple can't find a way to arbitrate that dimension so that it works for it again, rather than against it, it risks political powers getting in the way and destroying it.
Also, the success of the App Store is that it was there all inside. Unlike macOS, there were iOS apps that didn't exist for Android, because that's where the business is. With Fortnite out, it will be the first time that there is an application that is not for iOS and is on other sites. The first crack.
Update September 2020
In this update we cover the development of the plot, as well as some ramifications that originated or were amplified by the actions of Epic Games.
The newspapers raise their voices
Taking into consideration the saying "Troubled river, fishermen's profit", leading newspaper editorials (Wall Street Journal, New York Times, Washington Post, etc.) have raised their hand saying that they want Apple to change its shares as well. holding in Apple. % to 15%.
It must be understood that newspapers are already experiencing a serious existential and economic problem, so everything you need to earn more will always seem convenient.
As far as is known, Apple has not even publicly responded to that request.
In our view, if Apple News fails to establish itself and maintain a steady stream of business and partners, Apple is likely to eventually give up on the idea and shut down the service.
Banks also want to bite
As part of Apple's new “monopolist” discourse, the banks also want Apple to give up its exclusivity with Apple Pay and allow them to access the NFC chip so that the user can embed any payment system that suits them. Apple said such a move would create a huge security hole that undermines the entire core development base of Apple Pay.
At the moment it does not appear that banks have much interest in facing Apple, although any ruling on antitrust policies will certainly awaken the desire to bite the lobbies again.
Bond me to one
Finally, the judge presiding over the case decided that Apple had the right to withdraw Fortnite from the App Store until the rules were respected, but did not allow Apple to cancel all Epic Games accounts, because they were different companies. .
The fallacy of canceling "Sign In with Apple"
On September 9, Epic Games published that Apple "would not allow users" to log into Epic Games accounts with Apple starting September 11, advising its customers to move their accounts to a different one.
The next day, Epic reported that Apple had approved an "indefinite extension" to allow Epic Games to access Sign in with Apple. Despite this, it has continued to recommend its users to change their accounts.
In a statement, Apple said it has no plans to disable Sign in with Apple Support.
Apple shares some data on the Fortnite situation
In documents handed over to court on Sept. 16, Apple accused Epic of using the entire Fortnite controversy as a form of promoting the game, as its popularity was waning on iOS, according to Apple.
"For reasons that have nothing to do with Epic's claims against Apple, Fortnite's popularity is on the decline," Apple's document states. “As of July 2020, interest in Fortnite was down nearly 70% from October 2019. This lawsuit (and the headlines) appear to be part of a marketing campaign designed to bolster interest in Fortnite. . "
According to Apple, "If Epic were really concerned that its reputation would be damaged by this controversy, it would not have developed such an elaborate campaign to advertise it." “Apparently (including the #freefortnite campaign) Epic thinks its conduct will build supporters, boost its reputation, and cause more users to play Fortnite, not the other way around. This doesn't hurt ”.
Epic claims that Apple has chosen the right data and that nothing Apple claims is true.
The coalition for app equity
On September 29, the Coalition for App Justice was formed with some of the best developers. This nonprofit organization aims to shed light on the problems developers face when they want to create something for the App Store.
The developer group includes Epic Games, Spotify, and Tile, among its founding members, as well as Deezer, Match, News Media Europe, and ProtonMail, among others.
The creation of the group coincides with a delicate moment for Apple, as it is under various investigations for the monopoly of the App Store in various areas of the planet.
This Coalition has published a list of ten principles that should be followed by the different App Stores and includes many of the usual claims of Apple's critics: democratizing application hosting, preventing preferential treatment for proprietary apps, and reducing fees.
The next view
Apple and Epic Games had a nu