“Apple’s Epic” battle just got interesting; ruling of antitrust could also affect Google
The antitrust regulators tackled yet another clash between tech giant Apple and Fortnite game developer Epic Games Store (EGS). A federal judge declared that Apple could no longer block developers from introducing alternative payment options in their merchandise for any apps on the store.
Epic Games were the first one to introduce in-game purchases via their application without depending on Apple to take a cut. In-app purchases were always taken care of by vendors on which the app was published. There are two leading global platforms to do so: the Apple store and Google Play Store. The recent lawsuit cost Epic Games to pay 30% of the cut that translated to $12 million, earned directly for the app published on the Apple store and not giving them a cut.
The alternative payment system in iOS raised eyebrows and questions, and as a result, a long fight was going on. Apple will now introduce the option for developers to earn money directly before things escalate further. Developers can now submit their payment system for the app published on app stores. The pricing came to question, and it would be the same as app store payment, so customers have more options without ditching a platform entirely and cutting them off revenue.
Of course, things might change as many platforms offer developers to put out their applications that have a separate store of their own with individual pricing. This goes for the broader market or computing sector, but the smartphone section is relatively new, and the revenue sharing model will change a lot.
Google Play Store offers similar functionality where a charge is taken as a cut from in-app purchases. 46% of global smartphone users have Android, and no intention to share revenue from them is quite a monopoly. Gonzalez Rogers defined “digital mobile gaming transactions” for the market that it became a monopoly, and Apple should accommodate changes brought by the developer community.
After ruling by the U.S. District Judge Yvonne Gonzalez Rogers, Apple shares fell 3.3%, while Alphabet dropped 1.9%. Similar rules apply to both app stores, and as Apple’s case mostly went to the developers’ side, chances are the Android store will suffer the same fate. D.A. Davidson analyst Tom Forte said Google could be at risk, and the new regulations taken by lawmakers are pretty transparent actions.
In a briefing, Apple said they are still undergoing the issue, and a few matters need to work out. App store guideline is prone to change as the regulatory move is pretty massive at scale. Followed by Epic Games, more developers and farms will take payments directly without giving less cut to the stores. Significant revenue will help the development of future products and support financially.
On the other hand, following the same pattern, Google doesn’t seem interested in sharing revenue yet. Mark Lemley, a Stanford Law School professor who studies antitrust issues and technology, said, “It’s a split decision” and “it will improve competition on the edges, but it’s not the fundamental change that Epic and advocates of the antitrust case would have hoped for.”
People buying iOS applications in future will have the option to buy directly from the developers, and it may contain more discounts than the price tag on the app store. App stores banned developers from alternative payment systems long enough, and it exploded as expected. The market should be more focused on customers and offer flexibility than tying them in a single system. The long arguments and fights are finally ending with many agreements and disagreements, and maintaining the status quo by Apple courted considerable controversy.