Tuesday , November 24 2020

How Fortnite’s epic battle with Apple could reshape the antitrust fight

When Tim Cook finished up his appearance in front of the House Judiciary panel in July, the conventional wisdom was that the Apple CEO had gotten off easy. He was joined by Sundar Pichai, Mark Zuckerberg, and Jeff Bezos, and each one seemed to have more to worry about. In the face of Google’s looming indictment and Facebook’s terrifying history of election interference, who could really care about App Store policies?

But after Epic’s dramatic attack on those same App Store policies, the questions directed at Cook feel a little more pointed — with one exchange, in particular, standing out. About an hour into the hearing, Rep. Hank Johnson (D-GA) started questioning Cook about App Store policies, specifically the decision in April to let Amazon Prime video rentals skirt the commission.

“Is that reduced commission, such as the one Amazon Prime gets, available to other app developers?” Johnson asked.

“It’s available to anyone meeting the conditions, yes,” Cook replied, an elegant dodge.

Johnson went back and forth with Cook, focusing specifically on the company’s payment processing requirements — a point that was raised in Epic Games’ antitrust lawsuit.

Johnson finished with a question that now seems almost prophetic: “Has Apple ever retaliated against or disadvantaged a developer who went public with their frustrations with the App Store?”

“Sir, we do not retaliate or bully people,” Cook said flatly. “It’s strongly against our company culture.”

The last week has put that culture to the test. Since Epic’s lawsuit was filed on Thursday, Apple has threatened to cut off Epic’s ability to distribute developer tools, according to a recent court motion. The fight has escalated far beyond the question of in-app purchase fees, and it’s hard to see it as anything other than retaliation for the lawsuit.

It’s a sign of how heated the App Store fight has become in just a few short days and how fiercely Apple is willing to defend its commission system. That 30 percent commission is baked into the core of Apple’s business. Epic’s project of unwinding it is a major antitrust undertaking, one that Cook will fight at every step.

(Update: After publication of this video, Apple contacted The Verge to point out the full extent of the work the company does to support App Store developers, including significant marketing work after an app has published. It also emphasized again that free apps pay no percentage to Apple.)

But Epic won’t be fighting alone. The tech antitrust hearing covered many of the same points as Epic’s lawsuit — some in the same exact language. That’s not proof of collusion, exactly. (These ideas have been circulating for years in tech critic circles.) But it’s a sign of how much support those ideas have in Washington and how likely it is that regulators will intervene on Epic’s side.

It’s a major test of the ideas we heard in the tech antitrust hearing — and there are plenty of other challenges waiting if Epic finds success. Yelp has been trying to stage a similar moment with Google for a solid decade, and there are plenty of companies that would like to take on Amazon in a similar way. Apple was the first target, and the easiest, but it won’t be the last.

Correction: This video refers to an App Store case headed to the Supreme Court — in fact, the Supreme Court ruled on Apple v. Pepper in 2019, finding narrowly that App Store customers have standing to sue Apple over App Store prices. The case was sent to lower courts, which have not yet ruled on the merits of the underlying antitrust claim. The Verge regrets the error.

The Verge on YouTube

This Article was first published on theverge.com

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