Apple, Google sued over removal of video game Fortnite from app stores

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SAN FRANCISCO • and Alphabet’s on Thursday removed popular video game from their app for violating the companies’ in-app payment guidelines, prompting developer Epic Games to file federal antitrust lawsuits challenging the two companies’ rules.

Apple and Google cited a direct payment feature rolled out on the Fortnite app earlier on Thursday as the violation.

Epic in the US court seeking no money from Apple or Google but rather injunctions that would end many of the companies’ practices related to their app stores.

“Apple has become what it once railed against: the behemoth seeking to control markets, block competition and stifle innovation. Apple is bigger, more powerful, more entrenched and more pernicious than the monopolists of yesteryear,” Epic said in its lawsuit, filed in the Northern District of California.

Epic also attacked Apple on social media, launching a campaign with the hashtag #FreeFortnite, urging players to seek refunds from Apple if they lose access to the game, and creating a parody of Apple’s famous “1984” television advertisement.

In the parody, which quickly garnered hundreds of thousands of views, a female Fortnite fighter hurls a unicorn-shaped club to smash a screen on which an Apple-headed character speaks of “the anniversary of the platform unification directives”.

Apple takes a cut of between 15 per cent and 30 per cent for most app subscriptions and payments made inside apps, though there are some exceptions for companies that already have a credit card on file for iPhone customers if they also offer an in-app payment that would benefit Apple.

Analysts believe games are the biggest contributor to spending inside the App Store, which is in turn the largest component of Apple’s services segment worth US$46.3 billion (S$63.6 billion) a year.

In a statement, Apple said Fortnite had been removed because Epic had launched the payment feature with the “express intent of violating the App Store guidelines” after having had apps in the store for a decade.

“The fact that their (Epic) business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users,” Apple said in a statement.

Google also removed Fortnite from its Play Store, but did not immediately respond to a request for comment on the lawsuit. “However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play,” Google spokesman Dan Jackson said in a statement.

He said Epic had violated a rule requiring developers to use Google’s in-app billing system for products within video games.

Apple and Google were among the major American technology companies to come under anti-competition scrutiny in a hearing before lawmakers last month. During the hearing, Apple chief executive Tim Cook argued that the firm is not anti-competitive because it does not have majority market share in any market where it operates, such as mobile phones, where devices powered by Alphabet’s Android have greater market share.

Epic’s lawsuit, however, argues that app distribution and in-app payments for Apple devices constitute their own distinct market for anti-competition purposes because Apple users rarely leave its “sticky” ecosystem, according to Epic’s filing.

Epic’s free-to-play battle-royal video game Fortnite has reached massive popularity among young gamers since its launch in 2017, and competes with Tencent Holdings’ PlayerUnknown’s Battlegrounds.

The title’s removal from the App Store means that new players will not be able to download it and that exiting players cannot receive updates, but the game should continue to work on devices where it is already installed.

Epic does not disclose how many iOS users Fortnite has. Many fans play the game primarily on personal computers or gaming consoles while using their mobile phones as a backup, but iPhone users generate far more revenue for Epic.

In both Apple’s App Store and Google’s Play Store, Fortnite had about two million downloads last month, according to mobile analytics firm SensorTower.

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