Tuesday, September 14, 2021

Apple May Skip Epic Games' Court Slap In the Face

In the court battle against Fortnite creator Epic Games, Apple is getting off with minor blows. A judge ruled that it must ease its App Store restrictions. But habits are hard to break.

Epic sued Apple in 2020, claiming it forced third-party developers to use Apple's payment system for digital purchases within the apps themselves. Companies like Epic have to shell out up to 30% of their revenue from in-store purchases in fees to Apple. A U.S. judge said Friday that Apple is free to continue to require third parties to go through its App Store and can continue to collect fees. But it has to relax the rules, allowing developers to direct customers to other payment methods, such as their own websites.

The ruling is a vast extension of the concession Apple made last week with Japanese regulators by agreeing to let developers link to an external website. Still, in principle, it may not move the meter. Apple's dominance of game purchases is a consequence of the number of people who use its phones. In the U.S., its share hovers around 47% of the market, according to eMarketer.

Fortnite is popular enough to be able to attract players to its own website. But consumers like the convenience of Apple handling in-app payments, and they're already in the habit. In fact, Epic Games CEO Tim Sweeney tweeted that the ruling was not a victory.

A bigger problem caused by Apple's dominance is the $194 billion it has in its coffers. Periodic reinventions are part of its popularity, and that's a result of hiring the best developers and marketers. Meanwhile, Epic is still raising money outside the stock markets to try to grow, and engaging in legal fights is expensive. In an antitrust battle, cash is a deciding factor.

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