Apple responds to Epic Games lawsuit, says CEO asked for special treatment
cnbc.com
cnbc.com
https://twitter.com/TimSweeneyEpic/status/129691854162779341...
> Apple's statement is misleading. You can read my email in Apple's filing, which is publicly available. I specifically said in Epic's request to the Apple execs, "We hope that Apple will also make these options equally available to all iOS developers..."
Even if Apple agreed to the demands and made the options available to all developers, Epic would have an advantage.
They also have the advantage of being a trusted brand, whereas the games space is full of scammy apps. There’s a reason google specifically requires IAP in that space.
Right now you don’t have to trust a game developer on apple or google to pay them. With Epic’s change, big brands would get a trust afvamtage they could use to increase their dominance.
So asking to make the changes Epic requested was more self serving than it seems. Lowering apple’s commission would benefit all developers. But own IAP and separate app stores would benefit big developers, like epic.
One thing that would enable is narrow appstores with active curation—sort of what Apple promises but, if the store is fully of scammy games, doesn't quite deliver. A company could run a game-specific store with much stricter requirements than Apple's store.
As a user instead of going to one private, trusted and secure store I now have to visit dozens. All of which are going to be competing on price which means they will look to sell my user data to make money.
And what makes anyone think that the App Stores will simply not be dominated by Amazon, Epic, Valve etc like most gaming is today. In which case this is all about transferring money from one large corporation to another.
If I don't want to sell my product on the App Store, or if I have to make you pay more for it, I risk losing you as a customer. That's a trade-off every developer is aware of. Most apps that can publish on the App Store, will still publish on the App Store. On the PC, Epic sometimes has to shell out a lot of money to get an exclusive release, because a lot of people just use Steam.
However, a lot of apps can't publish on the App Store, because of the strict anti-competitive rules.
Didn’t even occur to me. It’s the obvious way app stores can earn money if there was some legislated effort to cut the commission fee and force multiple stores.
The repository model is basically the best of both worlds, from my perspective.
Yes going around to different stores to find the best price is annoying, but you are under no obligation to do it. You can't say shopping around is a worse experience for the end user because it is a problem entirely of their own making. If shopping around is that much of a hassle you could always just stick to the Apple App Store.
Same with Netflix, and Hulu, and Prime, and Disney, and HBOgo, and on and on and on. As a user it’s on my shoulders to navigate all this complexity. Yuck!
This whole “single AppStore” thing is only a big problem to developers. That’s why it gets so much attention and air time here because only developers whine about it and we are all developers. As an end user I just want one app distribution system to worry about.
Imagine if toilet paper is only sold at walmart, and paper towel is only sold at target. This already happens for some things of course, and for those in physical stores it's still annoying. This is a large part of the reason I shop on Amazon. Most stuff I want are there.
If epic wins, they’ll eventually raise prices and reap all the profits. Why wouldn’t they?
This is a problem because each of these stores use their own proprietary client. If instead they all used a public API then there could be an open source client that can access any of the stores.
We of course already have a possible client: the web browser. It works great for all sorts of e-commerce sites. It just doesn’t work for installing games from these stores. That could be changed, though.
I think if Apple is forced to open iOS to alternative stores, then I would like to see an API based approach. Force all the stores to compete within the same app, so they’re only competing on price and selection.
Companies with power and leverage won’t switch to an “open api” and generic ui. It’s better for them to offer their own proprietary experience and to be able to improve it.
Even if what you described was something companies would buy into... sounds like instead of N App Store programs to run, there’s be N App Store websites/urls to visit. what about payments? You’d need a trusted platform operator to avoid everyone having their own payment system and users having to enter details multiple times.
Also API to WHAT? Every App Store on windows has api access... to the os and install mechanisms. Any further value add services will require a trusted online partner (payments, security reviews, downloads?).
Gog Galaxy already exists, too.
Competition focuses on price with a presumption that quality won’t suffer because users will switch. Well that isn’t necessarily so, it’s a hope rather than a hard fact. There are many examples, that I leave as an exercise to the reader, where a customer “chooses” a lower cost item with poor quality, including harmfully so.
https://cdn.vox-cdn.com/uploads/chorus_asset/file/21759099/f...
[1] https://www.theverge.com/2020/8/13/21368395/fortnite-epic-ga...
They wouldn’t be competing on underlying frameworks though. Epic’s letter asked Apple to extend its app install frameworks and related frameworks to competing app stores.
So the only point of competition would be price, or marketing savvy. This seems to resolve to my point above: reducing Apple’s cut would benefit all developers.
Not clear how the rest does, except perhaps indirectly by forcing Apple and Google to surrender their businesses. And big developers would have a relative advantage. It’s not that small developers would have to run an app store: it’s that the ability to run an app store provides relatively more advantage to large companies who can.
Whether small developers had an absolute improvement might depend on whether prices dropped to match the lower cost structure.
Epic also wants anyone to be able to install apps on ios outside app stores. See point #2, app stores and apps available via direct install. This would lower trust in apps. The trust of the app store has led to an explosion of developer revenue. Not obvious that dismantling this system will help small developers.
Epic had (/has?) this with Android and gave up because... reasons?
They probably listed in the Play Store in order to get standing to sue Google.
So Epic wants both Google and Apple to abandon their security models and allow direct installs of apps.
Phones have been an enormously popular computing platform in significant part because of the security model. Non-technical users can use them easily and reasonably trust the apps they install. Epic is asking for a rather radical shift.
>and reasonably trust the apps they install.
That seems like an illusion though to me.
https://www.cvedetails.com/top-50-products.php
Android comes in at #2 for number of distinct vulnerabilities and iOs at #8 both in the top ten and both above windows of all things. Which rings in at #10 for 7 and #13 for 10. OsX sits at #4.
1. How much less secure would Android be without even the play store’s security measures?
2. How much harder would people work to find vulnerabilities on such a ubiquitous platform used by non-technical users if any app could be installed?
You would likely get more malware and more app hesitancy.
More malware, possibly, though android has plenty of that even with the play store. But, app hesitancy, maybe from a small subset of people, but i feel like those same people already show app hesitancy.
Only from my own experience, but i treat apps from the app stores about the same as i do random apps from the internet and do the same thing to verify in both situations, look at reviews and information about the app and make my judgement based on those. It's the same either way. All app stores do in my mind is aggregate reviews to one place, whether it's the play store, the apple store or the steam store, etc. I trust each of them about as much as something such as apk mirror, in all cases, i'm relying on the opinions and information provided by others that have used the app, if no such information is available, i consider it suspect and avoid.
The method acquire an app isn't what invokes trust, it's other user verification, no matter whether that app came from a store, a repo, a random website or any other method software can be delivered and it always has been, since the days of floppies.
You still need to exercise caution with permissions, but an individual app itself has pretty strict limits. Most of the security flaws are tied to the OS itself.
Which was the point of my original comment, that phone OS's provide the illusion of being more secure, while being about as secure as any other platform.
From what I can tell, computers are about as secure as they've ever been, whatever the kind, which is, alright depending on the user. It's always been like that and still is.
App stores and sandboxes haven't changed that.
Is it 100% secure? No. Is the user experience that I desire available due to app stores and sandboxes? Yes.
The point of the single-source App Store is that the app review creates a line of defense against such trickery, on behalf of the user.
Android has always been a shitshow,so the gnu link is unsurprising - however I did not find an example of iOS malware.
But it does highlight the problem here.
Let's say I take epic at their word, that this is not okay (and I'm tempted, this whole judge jury and executioner thing is ridiculous. Apple has now said that they regret that they can no longer spend time with Epic on making sure the Unreal engine runs well on mac hardware. That is so close to 'nice house you got there. Would be a real shame if something happened to it' it makes the hairs on my neck crawl).
What then? Sideloading with security measures is something google has but that's according to epic not good enough (and I'm again tempted to agree).
But clearly some free for all fiesta is no good for the users. And I don't think governments, certainly no the US government and probably not the EU either, are capable of defining the playing field, this stuff is too complicated.
So... what then?
I would hope that Apple (and Google) realize that this fight has only users, and the name of the game is to walk the line so that nobody is pissed enough that you end up with exactly what just happened. And it looks like apple has decided they like the hole they are in, as it sure looks like they are frantically digging.
Other example a kind makes a small mobile game and shares it with his friends , except his cousin is using iOS so he can't install and play it.
All this things you can't do on iOS is not because Apple is incapable of allowing this scenarios, is because this is not in Apple financial interest.
I assume someone would say something about security, the kid would maybe put code to steal your pictures, then my answer is the sandbox is garbage if you can trick it or trick the user to give full access for a small game and a competent developer would have placed code to fake data if needed.
Apple is getting greedy and pretending it acts for the user is getting harder and harder and eventually they will reach the limit, starting a fight with Epic will cost them more on the long run IMO because it makes more mainstream Apple practices that we on HN already knew but regular people did not know.
A multitude of App Stores on iOS would create competition among the stores themselves. For instance, if you want to publish on the Epic Store, they only take a 15% cut, therefore games on there can be cheaper.
Lastly, who says you need to run an app store to publish apps? Being able to publish directly is viable on other platforms, after all. iOS has a good-enough security model so that even malicious apps are limited in what they can do. Apple does not and can not scan for malicious behavior within that security framework anyway.
They have been doing this since the beginning of the App Store.
We know they scan binaries for use of private APIs so it wouldn't surprise me if they are looking for other ways to get around the OS.
I don't know that that's the case. Steam, the Humble Store, GOG and Microsoft (just to name a few) would all be happy to compete if the terms were right.
Epic “Google put up scary warnings about downloading apps outside of the Play store may cause security issues”
Also Epic:
https://arstechnica.com/gadgets/2018/08/fortnites-android-vu...
No.
> Does lying to the court only get you in trouble if you're on the witness stand and have been sworn in?
No, baseless filings, motions, etc., can be subject to sanctions, often for the attorneys involved.
The special deal language instead comes from an unlinked declaration from Phil Schiller. It is unclear if this is actually a court filing. It may simply be a document Apple distributed to the media. If anyone can source that quote to an original document I’d appreciate it.
The court filing: https://www.courtlistener.com/recap/gov.uscourts.cand.364265...
Apple is not willing to make the changes necessary to allow us to provide Android customers...
I don't think it's too far-fetched to think that Tim Sweeney wanted to negotiate bringing the Epic Store to iOS. The Epic Store is one of the bigger stores on PC after all, so he might think that Epic would be able to get an exception.
I do however agree that it can be read both ways.
1. https://www.theverge.com/2020/8/21/21396313/apple-fortnite-l...
Why are people so attached to a greedy corp worth 2 trillion whose entire business rely on child and exploitative labour, has avoided billions in taxes, has been bullying others legally, don't want you to own anything or repair (climate?), etc?
People who have overused whataboutism as a logical fallacy to stop an argument are doing the same today themselves.
This was never a "negotiation". It's pretty clear from the beginning that both Epic and Apple were writing their emails for public consumption, not to each other. Epic knew Apple wouldn't give in, and Epic wanted to sue Apple from the beginning.
They might as well have made it "Subject: Antitrust"
That email would have been a pretty rude opening for someone looking for a sweetheart special deal. Not "nice" at all.
Did they intend to write iOS there? That's a pretty big typo in such an important email.
Ah, to be a billionaire running a private company.
I don't know if you've worked in a large company but it's fairly typical guidance that all emails be written assuming that they could be made public.
The guidance I was given was "always assume what you're writing could end up on the front of the New York Times".
That's not what I meant though. I meant that the emails were making arguments specifically targeted at the public and/or the courts. If you viewed the emails as Epic and Apple having a conversation with each other and trying to negotiate or convince the other, they'd be totally ridiculous. Epic made a jerk cold opening, and Apple gave a pointless lecture in response. This wasn't a conversation, it was a debate. The emails were essentially opening arguments in a court case.
"On July 10, Apple responded that "Apple has never allowed this... we strongly believe these rules are vital to the health of the Apple platform and carry enormous benefits for both consumers and developers.""
Except, Apple does allow it. For the WeChat app from China's Tencent:
CNET (2019): WeChat messaging app brings its own 'instant apps' storefront to iPhones and iPads
"This is a big deal because WeChat's catalog contains over one million apps, separately from the iOS App Store. Ordinarily, Apple would strictly prohibit such a practice -- for security reasons at least, if not for platform cohesion -- but if a western company wants to do business in China, concessions must be made."
https://download.cnet.com/news/wechat-messaging-app-brings-i...
The former head of App Review for Apple, Phillip Shoemaker, even said this week "WeChat's continued presence on iPhones amounts to a special exception":
Apple lets China's WeChat bypass its rules, former app review chief claims https://www.telegraph.co.uk/technology/2020/08/15/apple-chin...
If we've reached the point that former Apple executives could be testifying on behalf of Epic... wow, this got really interesting really quickly.
Maybe not legally. But the court of public opinion is much more fickle.
>Over time, in part because of the opportunities Apple made available, Epic grew 9 to a multi-billion dollar enterprise with large investors like the Chinese tech giant Tencent pouring 10 hundreds of millions of dollars into the company.
Why did Apple even mention the "Chinese" connection to Epic? It's not relevant to the case in any way, shape, or form.
This reads to me personally as a shameless attempt to capitalize on current anti-China sentiment. It sounds almost Trumpian in the way it attempts to disparage their opponent, without actually saying anything meaningful.
Like Amazon for example. They pay 15% not 30% as everyone else. Way to reinforce their market dominance.
https://www.theverge.com/2020/7/30/21348108/apple-amazon-pri...
https://www.bloomberg.com/news/articles/2020-07-29/apple-con...
The antitrust issue is tying. Apple may be able to insist on a cut of things you buy via Apple. But products which create their own world in which other non-Apple things can be bought are a separate market. Apple's use of their control over the first class of sales to demand a share of the second is tying a sale in one area to a sale in another. That's not permitted by US or EU antitrust law.
Could it possibly be that random people on HN don’t know the law?
If the US had an Justice Department that wasn't totally out to lunch on antitrust enforcement, they would be. US antitrust law is far stronger in law than in practice. Wikipedia has a good summary of the history.[1]
In the UK or EU, you usually have several choices for Internet or TV service. Their antitrust authorities didn't let them all merge.
[1] https://en.wikipedia.org/wiki/History_of_United_States_antit...
2 points by dschuetz 1 hour ago
https://news.ycombinator.com/item?id=24238110
Not my submission so I can’t vouch for the site. Googling shows sites more well-known are reporting on this as well.
It’s about not being able to run bash on your phone.
I bet you also think that Beyoncé and Taylor Swift get the same record deals as the random up and comer a label found singing at the bar.
There are, theoretically, the risks you mention, but (and that may be my stock portfolio talking), I don't see it as particularly likely that Epic will win, especially since they've chosen to take Apple and Google on at the same time.
If I understand correctly, I think you are getting the timeline wrong. Unless you don't count prior contact attempts as an "opening move".
It would be entirely within the government's regulatory remit to tell Apple (and other companies) that consumers must be allowed to choose which app store they want to use with their devices and Apple would have to make it happen else face significant fines. That's the risk that Apple are taking by not making a deal with Epic.
It would be entirely within the government's regulatory remit to tell Apple (and other companies)
So the government is now going to tell private companies how to design their products? Can you imagine having to have multiple “stores” on a $35 Roku? Should the Samsung smart TV have multiple stores? Nintendo Switch?
When has the government ever passed a law with regards to technology that gave consumers more choice? DMCA? SOPA? All of the great laws regarding net neutrality? The government trying to pass laws to make encryption that they can’t bypass illegal? Rulings against municipal broadband?
But this time the government is capable of regulating tech.
It would be a completely radical shift. Google declined as well.
See letter here. The demands were much more than separate in app payment. https://twitter.com/TimSweeneyEpic/status/129691854162779341...
I know that calling Epic a customer is a little weird but they really are when you think about it.
But nobody is bringing it up, so there must be some qualitative differences, are there?
The "special deal" here wouldn't have been some sort of fee waiver, it would've been to let Epic open their own store on iOS. In other words, having Apple give up its monopoly on iOS app publishing, just what the current lawsuit intends to achieve. Obviously, they weren't going to get that, but it's worth asking for it before starting a billion dollar lawsuit.
$7 out of $60 game purchase (12%), according to 10-year old https://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/...
The problem is that Atari already failed in court against Nintendo back in the eighties, so the chances of winning that suit appear slim.
"out of the goodness of their heart" is also a silly way to characterize this positively or negatively: They want a chance to compete with Apple by offering lower costs in exchange for not offering the same feature set as Apple, just like how the EGS on Windows does not offer the same feature set as Steam. They believe developers will pick them due to the lower cut, but that's something the market would decide. Right now the market can't decide, because Apple has decided to prohibit competition.
Incidentally Epic made a public promise that if Apple lowered the cut, Apple Pay users would get the same Fortnite discount that people paying directly get.
They are just PC spoiled.
You can install games on your PC from any source, and there are over a half-dozen good games distributors you can choose to shop from or sell on. And if none of them work, you can also just buy directly from the developer themselves.
If Apple allowed multiple app stores and sideloading on iOS, but pulled in a few exclusives (ie, Apple Arcade) and banned Fortnite from its official store, that would be equivalent to what Epic is doing on the PC with the Epic Store.
And that is exactly what Epic wants Apple to do -- it's a completely consistent position for them to take.
It is perfectly fine for Epic to focus on suing the companies that are causing them the most trouble right now. Given their relative size compared to these companies, it would be stupid for them to take on everyone at once. They don't have the resources to sue every major player in the entire games industry.
I feel Google is doing the bare minimum to avoid antitrust rulings, which they probably do.
Interesting however is the wording of an old version of the Android Market (old name before Play Store came about) developer agreement - the title of 4.5 is labelled "Non-Competition".
I think that title (which has unsurprisingly disappeared from more recent versions) says it all. Sideloading was Google's attempt to avoid an antitrust battle in the early days of Android, as they could say "we are new, anyone can make a store". The trouble is the licensing agreements with OEMs contain all sorts of restrictions, some of which have probably become public over time. Perhaps more will emerge through the epic games lawsuit, as it seems they're going after the restrictions on OEMs. There's many of those they can request through disclosure if they don't have them already!
Ref: https://web.archive.org/web/20150107232223/https://play.goog...
However, the legal question of having a monopoly on publishing for a game console has been settled ages ago, and the platform owners won.
I don't believe it has, and I don't believe they do.
The only lawsuit of this nature that I'm aware of is Atari v. Nintendo [1]. All that lawsuit established was that
- It isn't fair use to violate copyright law in the process of bypassing mechanisms used to maintain the monopoly
- While it might be copyright misuse to create those mechanisms establishing a monopoly in the first place (undecided), the court isn't going to grant you a win when you got in the position you did by lying to the government to steal code.
Notably (as far as I can tell) it established nothing whatsoever about antitrust law, which is what is at issue in this case and presumably what would be at issue in a similar case related to consoles.
Is there another case you are thinking of?
[1] https://en.wikipedia.org/wiki/Atari_Games_Corp._v._Nintendo_....
Here's a legal analysis that predates the ruling:
https://scholarship.law.tamu.edu/facscholar/489/
It outlines the requirements for a successful antitrust case, particularly that simply having a monopoly is not enough.
"There’s a rationale for this on console where there's enormous investment in hardware, often sold below cost, and marketing campaigns in broad partnership with publishers. But on open platforms, 30 per cent is disproportionate to the cost of the services these stores perform, such as payment processing, download bandwidth, and customer service."[1]
Low margins on hardware definitely does not apply to Apple (they famously have much higher margins on their devices than their competition), and the (paid) App Store exposure doesn't really match "marketing campaigns in broad partnership with publishers" either.
Not saying he's completely right, but I can see his reasoning and I don't think he's a hypocrite in this case.
[1]: https://www.gamesindustry.biz/articles/2018-07-31-30-percent...
Epic seems to be fighting the good fight against a company abusing market power. I hope they win.
https://en.wikipedia.org/wiki/Bertrand_paradox_(probability)
Epic only takes 12% which is great, but they’re also locking up games in exclusive deals which I think is way worse.
Edit: I pulled these numbers from IGN’s article. Although I’ve seen another report that matches the 30% in most places. https://www.ign.com/articles/2019/10/07/report-steams-30-cut...
Looks like price collusion by the major players as well, which is also illegal.
Calling the app store just payment processing is a ridiculous simplification.
Epic's store charges 12%, but has neither the hardware platform, or software platform - and relatively little market share.
They arguably should be charging ~5% since it's actually closer to just payment processing and delivery.
Users pay for the hardware platform.
I find games for the first time with the Epic Store. Market share isn’t really super relevant, they are the newest entry in the market.
The history of mobile/online payments is littered with instances of users being confused/defrauded.
> Users pay for the hardware platform.
This isn't really relevant. Not only is an iPhone worthless without software, but subsidization of hardware by services is very common.
Obviously the iPhone is worthless without software, except it comes with a 1k price tag. Part of that is for the OS. The hardware certainly doesn’t cost that much (comparable offerings from hardware-only manufacturers cost less). This is not a case where the hardware cost is subsidized. Numbers from various sources suggest the iPhone sells for triple the cost of manufacturing.
https://www.apple.com/newsroom/pdfs/FY20-Q3_Consolidated_Fin...
But it still doesn’t matter, Apple is profitable, everyone knows that already. It is legal to be profitable, and it is legal to have parts of your business subsidize other parts.
What might not be legal is using a dominant market position to force out competitors.
It was telling that after circumventing Apple’s 30%, they didn’t offer their goods 30% cheaper - or even 18% cheaper (reflective of the 12% they think is “fair” in their own store), they made it 10% cheaper for the user, and kept 8% more for themselves than other developers on their own Epic platform would get.
Absolutely the App Store does a lot of discovery - just ask anyone what being a featured app does.
I find plenty of apps by searching.
Anyone whiteknighting for epic here is going to be disappointed in 5 years when they’re either successful with their store and raking other devs over the coals or they’ve shut their store down completely.
Some of that filing is so lousy & so easily proven false, it's starting to look like Apple could lose this one hard.
What they're saying is that in the market for product A, if sales of product A are usually bundled with product B, then the courts view product A and B as one product sold together. The fact that product B might be sold separately in other markets doesn't change the facts and circumstances as they pertain to product A's market.
The precedent they cite in Rick-Mik Enters., Inc. v. Equilon Enters. LLC demonstrates an example of this, where credit card processing services are typically bundled with sales of gas station franchises, and therefore in the market of "gas station franchise sales", "credit card processing services" were not considered a separate product even though you can obviously purchase "credit card processing services" separately in other markets.
While I don't know if this particular argument will hold up in court, it's not "so lousy & so easily proven false" either.
Every person distributing an app can access any potential buyer of digital goods directly via their own servers, which basically every app creator has already.
When developers don't have to publish in your store, you have to lower your cut:
https://blogs.windows.com/windowsdeveloper/2018/05/07/a-new-...
That is why Microsoft and Apple are so keen on pushing the Mac/Windows stores, and on making running unsigned code a huge pain in the arse. They want that sweet sweet 30% cut on desktop too.
Both Steam and the Xbox Games Store predate the App Store by several years so your suggestion is literally impossible.
Steam / Play Store both allow the distributor of an app to let the user subscribe without going through their payment processing. Apple does not. That means Apple is taking a cut of services they are not helping to deliver.
This is simply not going to happen for everybody else though. Apple will not forego billions of dollars in revenue for "fairness", "etchics" or whatever. This is the company which makes their product in Chinese sweatshops and benefits from Uyghur slave labor. They couldn't care less about "fairness".
Naturally lawyers exaggerate or manipulate the words ... they're not there to gain justice (although that's their intended purpose) but they're paid to get the decision.
Also federal judges don't need to be lawyers.
Further, Apple has spent a lot of cash on buybacks. Plus its own regular spending: Apple is clearly willing to spend on R and D, production, etc
Not every fact in the world has to tie together into a narrative. Falling for this is the first step in the road to conspiratorial thinking.
I used a strong tone because you presented a very strong conclusion that I don’t believe to be supported by evidence. You linked a fact you don’t understand (Apple’s cash pile) to the topic de jour (Apple’s new court case). I really do think this is a starting point to conspiratorial thinking: grand conclusions on the basis of a couple ideas. Maybe the way I warned you wasn’t likely to succeed, but I meant it completely sincerely.
Have a look at Apple’s stock buyback history: they spend $385 billion from 2012-2019: https://www.aboveavalon.com/notes/2020/4/23/apples-460-billi...
Dividends are harder to quickly find, but they seem to pay out about $12-$15 billion by year.
The money paid out to investors dwarfs their cash pile.
Two other facts:
* A lot of Apple’s cash is overseas. They can’t easily repatriate without tax consequences
* Apple has about $100 billion in debt. The cash offsets this
> Now I totally understand why Apple have piled up a huge mountain of cash and never spent a dime.
Given the fact above, your conclusion doesn’t seem very logical.