September 22, 2020
Fortnite direct payment option lets you dodge iOS and Android app store fees

Apple sued by Fortnite creator Epic after game is pulled from App Store over payments commissions


Fornite players get a discount if they opt to pay Epic directly on mobile versions. 

Angela Lang/CNET

Fortnite developer Epic sued Apple on Thursday after the iPhone and iPad maker pulled Epic’s hit game from the App Store over a direct-payments dispute between the two companies.

At the heart of the debate is whether Epic has the right to include a direct-payments service in its Fortnite app, circumventing Apple’s payments system and the up to 30% charge Apple levies on each transaction.

Epic’s lawsuit alleges that Apple has become a “behemoth seeking to control markets, block competition and stifle innovation.”

“Apple is bigger, more powerful, more entrenched and more pernicious than monopolies of yesteryear,” Epic says in the suit. “Apple’s size and reach far exceeds that of any technology monopolist in history.”

Apple earlier Thursday said it chose to remove Fortnite from its App Store because the game violated guidelines Apple says it applies equally to every developer and that are designed to keep the store safe.

“As a result their Fortnite app has been removed from the store,” Apple said in a statement, adding that it’ll work with Epic to resolve the issue. “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.”

Epic’s new direct microtransactions that skip Apple’s fees still appear to be available to anyone who already has Fortnite downloaded to their device.

Screenshot by Eli Blumenthal/CNET

Epic’s suit marks a dramatic escalation in the debate between the two companies and, by extension, between Apple and a growing group of developers who disagree with how the App Store is run. 

Apple says it created developer guidelines to protect users and to ensure equal treatment of developers, who’ve made more than 1.7 million apps for its iPhones and iPads so far. The companies and individual programmers, meanwhile, say Apple is too restrictive and that it takes too large a commission from sales that happen through the apps.

In the past year, lawmakers and regulators have begun joining developers in this debate, pushing Apple to justify its up to 30% commission and its tight control over its platform.

Apple has responded by citing a study it commissioned that says its fees are similar to those of its peers, with the notable exception of Epic, which charges 12% fees for its game store.

“Apple’s commissions are comparable to or lower than commissions charged by the majority of our competitors,” Apple CEO Tim Cook said during a congressional hearing in July. “And they are vastly lower than the 50% to 70% that software developers paid to distribute their work before we launched the App Store.”

The company has still come under criticism for its fees, leading music giant Spotify and other companies to file complaints with the European Union’s Competition Commission. The EU in June launched two investigations into Apple, focused on its App Store and its handling of the technology behind its Apple Pay payments service.

“It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices,” EU Competition Commissioner Margrethe Vestager said in a statement at the time. “We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books.”

Cook rebuffed those concerns in his July statement before the US Congress.

“After beginning with 500 apps, today the App Store hosts more than 1.7 million — only 60 of which are Apple software,” Cook said. “Clearly, if Apple is a gatekeeper, what we have done is open the gate wider. We want to get every app we can on the store, not keep them off.”

For now iOS users who already have Fortnite downloaded on their device still appear to be able to use the app in full, including the new approach to in-game purchases.

A battle royale over payments

Epic preceded its public fight with Apple with a series of high profile moves.

The company’s first step was to offer a discount for its hit Fortnite Battle Royale game, which brings together up to 100 people on a cartoonish game-simulated island. There, they fight till the last player’s standing (and wins the game). Fortnite’s design hit it big; the game is easy to grasp but hard to master. Its playful and vibrant visuals, free from the blood and gore that’s typical of most fighting games, made it more palatable to families and preteens. And it’s free to download, with the only charges coming from “V-Bucks,” in-game tokens players can use to buy different cosmetic looks for characters.

On Thursday, Epic announced discounts of up to 20% permanently on the console and PC versions of Fortnite. But it opted to keep prices where they were for the versions on iPhones, iPads and devices powered by Google’s Android software. As a result, 1,000 V-Bucks will cost you $9.99 if you go through Apple’s App Store or the Google Play Store, but only $7.99 through PC and console.

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

Shortly after, Apple removed Epic’s app from its store, prompting Epic’s lawsuit. Epic also posted a video online mimicking Apple’s famous Macintosh ad from 1984, this time accusing Apple of being the bad guy instead of the hero.

The video ended with a suggested hashtag, #FreeFortnite, which became the top trending item worldwide on Twitter within an hour of it being posted. In the US, Apple landed second on the top-trending list, with Epic in fifth place.

Epic troublemaker

This isn’t Epic’s first time starting a public fight with one of its peers. Back in 2018, Epic launched Fortnite for Android by asking people to download the game directly from its site, rather than through Google’s Play Store. The company confirmed to CNET that it would’ve done the same on iOS if it could’ve. 

The game came to the Play Store in April, but Epic criticized Google’s efforts to warn Android users about the alleged threats posed by downloading Fortnite directly. Google didn’t immediately respond to a request for comment on Thursday’s news about the lawsuit against Apple.

Spotify, which instigated the EU’s investigation of Apple, applauded Epic’s suit against Apple.

“Apple’s unfair practices have disadvantaged competitors and deprived consumers for far too long,” a Spotify spokesman said in a statement. “The stakes for consumers and app developers large and small couldn’t be higher and ensuring that the iOS platform operates competitively and fairly is an urgent task with far-reaching implications.”

Epic’s picked other public fights too. In late 2018, it took on Valve, a popular game maker and developer of the Steam online game store, when it launched its competing Epic Games Store for PCs. The company promised lower commission fees for developers and began paying for exclusive rights to popular games, such as Metro: Exodus and Borderlands 3.

“A lot of these issues are areas where you aren’t going to satisfy everybody,” Epic CEO Tim Sweeney said in a 2019 interview. “The Epic Game Store exclusives have been controversial among the PC gaming community who much prefers everything be on Steam, yet it’s by far the most potent approach to ensuring the success of a new store.”

CNET’s Ry Crist, Joan E. Solsman and Sean Keane contributed to this report.

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