Battle Lines Are Being Drawn Between Developers And Apple

Last Thursday, Epic Games saw its most popular app, Fortnite, removed from Apple’s (NASDAQ: AAPL) App Store and Google’s (NASDAQ: GOOG) Play Store after alleged rule-breaking. Apple’s official stance was that: 

“Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users. As a result, their Fortnite app has been removed from the store.”

The breach in question involved Epic installing channels for in-app purchases that brought users back to Epic’s own homepage, allowing the company to bypass Apple and Google’s 30% cut of all purchases made on their platforms. 

Just look at our returns versus that of the S&P 500! Click here to find out how we continue to beat the market and view the list of stocks we think will turn out to be the next Amazon, Tesla, or Netflix!

What followed the ban was a lawsuit from Epic and accusations of Apple being out to crush both Fornite and Unreal Engine, the gaming software that powers some of the world’s most popular titles. Having garnered the support of other, larger firms such as Match.com and Spotify (NYSE: SPOT), Epic is looking to take things a step further by building an anti-Apple coalition. 

What is the coalition’s goal?

What is the goal of any coalition? To band together a bunch of smaller players and take on the big, bad villain — Apple, in this case. Epic’s goal, once it has recruited some allies, is to coordinate public messaging that will lambast Apple for its seemingly ‘monopolistic’ App Store policies — most notably, its 30% cut of all transactions. 

Not content with just spoofing Apple’s famous ‘1984’ commercial, Epic has reportedly approached both Spotify and Sonos already to join this band of brothers in their struggle. Sonos is reportedly close to joining the coalition while there is no update on Spotify’s intentions. 

–>

Spotify itself has a long history of disagreements with Apple’s policy and would be a key ally. Though it has made no commitments yet, it has not been quiet on the matter, stating last week:

“We applaud Epic Games’ decision to take a stand against Apple and shed further light on Apple’s abuse of its dominant position,” a Spotify spokesperson said in a statement last week.

Spotify is a long-time critic of Apple’s 30% charge on users who sign up via iOS, with this anger culminating in an antitrust lawsuit in April 2019 in the European Union, which is still in process. Spotify might want to be a bit more careful though lest someone investigates the many accusations that it profits from the exploitation of underpaid artists. 

Will the coalition work?

It’s too early to tell, but it’s no small thing to go toe-to-toe with the world’s most valuable company. While smaller companies will not have the individual resources to take on Apple, the larger companies that can do so may not want the attention. 

Both Microsoft and Facebook have their own gripes with Apple’s policies, with Facebook CEO Mark Zuckerberg publicly calling out the company this week while Microsoft has had its ‘Hey’ email app rejected from App Store inclusion. However, Facebook has more than enough going on with antitrust right now so can’t try to take on a fellow Big Tech player, while Microsoft is in the midst of a precarious TikTok acquisition and an antitrust investigation in the EU over its Teams software. 

For now, it looks like an uphill battle, but should more companies join the cause and hone in on rising anti-Apple sentiment from the wider gaming community, it could build a damning voice against the iPhone maker.

What is Apple’s take?

Through all of this Apple is holding firm, telling Epic this week that it will make no exceptions for them. In a statement, Apple maintained that “the problem Epic has created for itself is one that can easily be remedied if they submit an update of their app that reverts it to comply with the guidelines they agreed to and which apply to all developers.” 

The general consensus from Apple HQ seems to be, “if you don’t like our rules, sell your products on another platform.” It’s a hardline stance and there appears to be no sign of either side backing down any time soon. Buckle up, folks.

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.