After months of anticipation, the trial between Apple (News - Alert) and Epic games has officially begun. Over the next three weeks, under COVID19 restrictions, lawyers will be debating whether or not Apple’s app store is a monopoly in the mobile app space, which requires app developers a 30% fee and other conditions to remain in the marketplace.
To those unfamiliar with the case, here are some key points to know. Epic Games is the creator of one of the most popular video games currently available, Fortnite. The game, a first person shooter that specializes in the “Battle Royale” format, is widely available on all major video game platforms, including Apple’s IOS app store and Google (News - Alert) Play. Fortnite became incredibly popular for its unique take on the “freemium” gaming model, where players can play the game for free, but have the ability to buy customizable in-game products.
However, because Fortnite was accepted into the Apple mobile app store, the company was required to pay a 30% fee for every in-app purchase. The developers of Fortnite found this fee to be excessive, and in retaliation, offered customers an alternative method to make in-game purchases without going through the app store. By doing this, Epic clearly violated the terms of the app store agreement, resulting in Fortnite being temporarily banned from Apple’s app store.
In short, Epic Games claims that Apple’s terms and financial demands make Apple a monopoly. Apple believes that the 30% cut is not only within their rights, but is necessary to guarantee security and maintenance for users. Though this may seem to be a battle between only two companies, the decision of this case could have devastating consequences for the mobile app industry. If Epic wins this case, Apple would be forced to alter its existing policies, which could completely overhaul one of Apple’s leading revenue sources.
It is difficult to determine at this time who will be victorious, as both companies have reasonable defense strategies. Though Apple is clearly one of the most powerful companies in the world, with a market cap of roughly 2 trillion, Epic Games has enough resources to make this an interesting fight.