Aug 25, 2020

What’s next in the Fortnite antitrust fight?

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If Apple had been able to revoke Epic Games' access to developer tools, it would have impacted any game that uses Epic's Unreal Engine on iOS.

Epic, Apple and Google are in a feud over the game Fortnite. Here’s why: In mobile apps, whenever you buy a digital item, like an e-book, avatar skins or weapons, Google and Apple charge a 30% fee. Recently, Fortnite maker Epic started letting players make in-app purchases on their credit cards so Apple and Google wouldn’t get the fee. Apple and Google yanked Fortnite from the App Store and Google Play. Epic sued, saying these digital fees are antitrust violations.

Apple had threatened to go further and revoke Epic’s access to developer tools, which would mean other iOS games built on Epic’s engine would be affected. But a federal judge on Monday ruled that Epic gets to keep that access for now.

I spoke with Nicole Carpenter, the deputy news editor at the gaming news site Polygon. The following is an edited transcript of our conversation.

Nicole Carpenter (Photo courtesy Carpenter)

Nicole Carpenter: Epic Games’ game engine, Unreal Engine, is essential to a lot of game developers. And honestly, it’s beyond game development, too. A lot of other industries use this game engine. It helps in doing all portions of game development, but it’s really known as a 3D image creation tool, so it creates those 3D worlds. It’s also used in films to create the CGI backgrounds and other 3D things in their movies. So by taking Epic’s access to the development tools that Apple provides, that’s going to be harmful to way more than just Epic.

Molly Wood: I wonder how much power Epic has here. When Spotify started making a lot of noise about Apple’s anti-competitive policies, that got people’s attention because Spotify is a big name and they made a pretty clear case. Epic is a big name with a lot of reach and, one assumes, a lot of pretty loud fans. Do you think that will make a difference?

Carpenter: I do, and that’s really been part of Epic’s plan. This was more than just a lawsuit. As soon as they got taken off the App Store and the Google Play store, they filed those lawsuits and they launched a campaign. The CEO of Epic Games, he’s posting publicly about this and passionately about this. They’re trying to start a movement, and they’ve got their hashtag, they’ve got a tournament, and I think that means something for their chances there. With Spotify, they’re a huge company, but they didn’t have that campaign behind it like they do here. Epic is really going for the public opinion. And with the size of Fortnite, they’ve been able to use that power before.

Wood: The argument that Apple makes is that there’s plenty of competition. And I wonder, if Epic is taken out of the Google Play store, people can still sideload apps, find another way to install Fortnite on their phone. And that’s not the case on Apple and iOS, right?

Carpenter: Right. That’s the case in the Google Play store. Epic filed a lawsuit against Google anyways, because some of the practices they say are anti-competitive that way. But if you don’t have Fortnite installed on your phone on iOS right now, you can’t play it unless you’ve downloaded it before. Then you can kind of move around that and go back to your old purchases and download it that way.

Wood: I mean, it seems like it would be pretty hard to argue that that’s not anti-competitive.

Carpenter: Right, it absolutely is. And that’s the argument. Epic Games isn’t really trying to create new legislation here. What they’re doing is testing the legislation that already exists. They’re seeing that if these antitrust rules as they stand right now can support their case.

Wood: Is it complicated at all by the fact that Epic itself both makes games and sells others games and has some games exclusive to its own stores?

Carpenter: I think that it does make this a little bit more complex there, but it does feel like it’s a different arena. They do have games that are exclusive to their platforms, but there are other options within PC gaming that doesn’t make it a monopoly.

Wood: From your perspective, how do you see this ending?

Carpenter: It’s going to take a very, very long time to have something come out of the case. But I do think that that’s almost irrelevant right now for Epic Games, because they’re really going for the court of public opinion. So I think they’re going to keep playing off that, kind of harnessing the fan base in a way that it’s bringing an issue, antitrust, to people who might not have ever thought about that before. So I think that that’s really the goal here, and using that power to push Apple and Google in the way they want to.

An adjustable hat that reads "Free Fortnite," which was one of other prizes participants could win during the #FreeFortnite Cup on August 23.
Top-scoring players who participated in the Free Fortnite Cup on Aug. 23 received this hat — a jab at Apple’s logo — as part of an anti-Apple campaign. (Photo courtesy Epic)

Related links: More insight from Molly Wood

If you want to geek out on 3D game engines, or just serendipitous business timing, CNBC reports that Unity Software, which makes a tech platform that competes with Epic, filed to go public on Monday. If this battle with Apple and Google goes on for a very long time, Epic’s Unreal Engine could start to be in real trouble as app developers that want to avoid the uncertainty either switch to Unity or build new products using Unity instead. For context here, Epic is valued at over $17 billion, and the reason for that is not in-game sales of loot boxes or custom dances on Fortnite. It’s licensing the Unreal Engine, which is why in its lawsuit filing against Apple, Epic said the possibility of revoking its developer account ban, was an “existential threat to its business.” That’s because as long as the ban is in place, Epic can’t update the Unreal Engine on Apple devices, so any app using it would eventually become out of date, buggy and insecure.

Also watching:

Speaking of competition, TikTok sued the U.S. government — I’m kind of surprised that didn’t happen sooner — over President Donald Trump’s executive order that said TikTok must be sold or banned in the United States. TikTok said the action violated due process. And you know the thing about TikTok, legitimate privacy violator though it may be, is that it is arguably the biggest and maybe only substantial competition to Facebook, Instagram and WhatsApp — with apologies to Snap here. That’s why it was so interesting that the Wall Street Journal reported over the weekend that Facebook CEO Mark Zuckerberg reportedly pushed hard on U.S. officials and lawmakers on the idea that TikTok is a threat to national security, particularly in that dinner with Trump himself. All kinds of ways to try to get rid of the competition, right?

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Molly Wood Host
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