In Epic vs. Apple Court Fight, a Win for App Developers
But the order on Friday goes much further, because such reader apps account for very little of Apple’s App Store revenue, analysts have said. The order applies to all apps, and Judge Gonzalez Rodgers said that gaming apps accounted for 70 percent of the sales on iPhone apps.
There are also other challenges ahead for Apple’s App Store. The Justice Department has opened an antitrust investigation into the business, and the Senate has introduced antitrust legislation aimed at promoting app store competition. The European Union, Britain and India also are investigating Apple’s App Store dominance. And Judge Gonzalez Rogers is set to hear another lawsuit from consumers that is seeking class-action status and claims that Apple’s App Store commission is illegal.
Apple instituted its 30 percent commission on many app sales shortly after introducing its App Store in 2008. At the time, with the app market so nascent, the policy didn’t generate much protest.
But in recent years, as smartphones have become central to modern life and commerce, Apple’s and Google’s shares of app sales by other companies have grown rapidly. An executive at Match Group, the maker of dating apps like Tinder, testified to Congress this year that app-store fees were Match’s single largest expense and would soon exceed $500 million a year, or a fifth of total sales.
For years, companies complained quietly about the fees, but their voices have become louder with the public’s rising concerns over the power of the biggest tech companies. In response, Apple halved its commission on developers that brought in $1 million or less from their apps in the previous year, charging them 15 percent instead of 30 percent. That move affected about 98 percent of developers that pay the commission, but it hardly affected Apple’s bottom line; those developers account for less than 5 percent of App Store revenue, according to estimates from Sensor Tower, an app data firm.
The larger companies that still pay the higher rate continued to complain, and one of them decided to act: Epic.
A year ago, Mr. Sweeney, the billionaire game developer who runs Epic, sent an email to a contact at Microsoft: “You’ll enjoy the upcoming fireworks show.” A week later, his company executed a plan that had been months in the making when it began offering Fortnite players discounts if they used Epic’s payment system instead of Apple’s and Google’s. The move was against Apple’s and Google’s rules, and Epic knew it. The tech giants quickly pulled Fortnite from their app stores.