Explained- The Story Behind the Apple Versus Fortnite App Store Battle

Business Standard Explained: The story behind the Apple versus Fortnite App Store battle

The court case involving Apple and Epic Games, the maker of the video game Fortnite, is the result of the gamemaker's rebellion against rules and fees set by Apple.

Perhaps it’s a sign of our times that a potentially landmark battle with antitrust implications is shaping up over digital pickaxes. The court case involving Apple and Epic Games, the maker of the video game Fortnite, is the result of the gamemaker’s rebellion against rules and fees set by Apple in its role of gatekeeper for apps on its iPhones and iPads.

What’s the case about?

In August, Epic’s billionaire founder, Tim Sweeney, announced that he would no longer abide by Apple’s rule that all purchases of apps and items within apps designed for its iOS-based devices go through Apple’s payment system. After he activated Epic’s own payment system, Apple kicked Fortnite out of its app store. It also threatened to make it hard for developers using Epic’s tools to build games.

In response, Epic sued in federal court; it also sued Google over the same issue Apple soon counter-sued.

What was Epic unhappy about?

That Apple and Google charge fees of up to 30 per cent to developers using their app stores. Consumers spent $50 billion worldwide on the App Store and Google Play in the first half of 2020, according to Sensor Tower estimates. That generated billions of dollars in highly profitable revenue for the companies. Some developers have derided this as an unfair and unwarranted tax, especially since it applies not just to the purchase of an app, but to anything bought within one.

Why does Apple do that?

Apple says that the App Store’s success is directly related to its iron-clad rules because it spends significant resources to police apps and maintain high quality standards. Its payment system ensures that consumers using the store have a seamless and easy experience and are protected from fraud. But a growing number of developers say Apple is simply finding excuses to maximise profits.