Epic Sues Apple and Google over their "Unlawful Monopolies"
The battle against the monopolization of mobile app stores has just been taken to a whole new level.
On Thursday, August, 13, 2020, Epic Games filed civil antitrust lawsuits against both Apple and Google as response to the platforms’ removal of Epic’s hit battle royale game Fortnite from their app stores. The platforms removed the game as a reaction to Epic’s implementation of their own in-app payment system, bypassing the platforms’ 30% cut of in-app sales.
It seems as if Epic had planned this out. Moments after the game’s removal, Epic not only filed suits, but also initiated a public relations war by releasing a Fortnite-based parody casting Apple as the villain and accusing Google of having “relegated its (‘Don’t Be Evil’) motto to nearly an afterthought;” and within hours, #FreeFortnite was the top trend on twitter.
How Surprising Is This Move?
While Epic’s strategic move this past week is likely a new public relations tactic, the lawsuits themselves are hardly surprising. Although both Apple and Google have rejected claims that such guidelines are used to retain control over the marketplace in an anticompetitive manner, their 30% commission requirement has been at the center of numerous antitrust complaints against the companies recently. Most prominently these being (i) the U.S. Supreme Court ruling in May that Apple iPhone customers may proceed with a class-action lawsuit which alleges that the App Store operates an illegal monopoly on iPhone apps and (ii) the EU Commission opening a formal antitrust investigation on June 2016, 2020, after Spotify filed a complaint alleging that Apple’s 30% fee constitutes a tax that violates competition laws under European law.
What’s the Problem? What’s the Gain?
The legal question is quite clear: are Apple and Google unlawfully exercising on a monopoly? In other words: Are the commissions a fair reflection of a market price for such services or are they purely an expression of a market actor, who, with all its power, can charge whatever the actor wants – thereby stifling the (oh so necessary) competition (for our world to turn). Of course, anyone having to pay the commission would argue the latter. The platforms obviously argue the opposite: These services are costly, the commission thus a fair market price, and anyways, the existence of both platforms is evidence that the stores don’t have that power.
There is no binary answer to these questions, it will be case by case and heavily influenced by public policy: how important are digital platforms for the users? is the market better off with these dominant players or are we missing out on a lot of consumer and business friendly digital platform models that provide better services, cheaper pricing, and more accessibility – it is arguably so that the services are amazing, but should we be satisfied with the status quo? In any case, it would be great if Epic, regardless of its intent, actually pull through with this because the results, whichever they may be, will likely be landmark like influential.
Author: Jennifer Kleinman and Daniel Koburger
First Published: 08/18/2020