Legal

Filings Reveal Payments At Center Of Fortnite/Apple/Google Legal Battles

Payments Focus Of Fortnite/Apple/Google Battles

The latest salvo in the legal battles against Apple and Google alleging antitrust behavior – where court dockets are getting decidedly crowded – is now joined by Fortnite, and it’s a bit different from what came before.

That’s because Epic’s moves – cutting out the middleman for access to its apps, and especially for the mega-popular Fortnite, which has 350 million users – show that when it comes to the courtroom, access will be under the microscope, as will payment choice.

To see just how fierce the battle for the ecosystem can be, consider the lawsuits filed against Google and Apple by Epic, marked by similar claims that the tech juggernauts are abusing their respective market positions and creating lopsided playing fields – in essence, harming end consumers.

As has been reported, this week Epic Games offered gamers a way to buy its offerings directly, outside of Apple’s App Store. To help lure those gamers to make their buys and downloads directly, Epic Games offered discounted pricing.

In the wake of being removed from Apple’s App Store, Fortnite also was taken off of Google Play’s store, which, of course, is for Android devices.

Epic’s move allowed users to pay the company directly for in-app buys – allowing that choice through updates of the iPhone and Android versions of the app – before the apps were jettisoned by the tech giants.

Epic has in turn sued Apple and offered up a video that parodies Apple’s famed 1984 commercial, alleging that Apple is a monopoly.

To get a sense of the central issue at stake, it’s worth quoting Google, which released a statement that read: “Developers offering products within a game downloaded on Google Play or providing access to game content must use Google Play’s in-app billing as the method of payment.” Both Google and Apple charge developers for access, in what is seen by some observers as a literal version of pay for play.

But Fortnite is still available through, say, the Samsung Galaxy Store. By way of contrast, reports The Verge, “this is different from iPhone and iPad, where it is now impossible to install the game if you had not already done so.”

Before the bans, Epic said in a post that it was “introducing a new way to pay on iOS and Android: Epic direct payment. When you choose to use Epic direct payments, you save up to 20 percent as Epic passes along payment processing savings to you.”

The Suits 

Epic said in its lawsuit that “Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100 percent monopoly over the iOS In-App Payment Processing Market.”

Apple, contended Epic, “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.”

In detailing some of the anti-competitive allegations, Epic said that Apple also requires software developers who wish to sell digital in-app content to use a single payment processing option – Apple’s In-App Purchase – which carries a 30 percent tax.

Similar charges are detailed in the complaint against Google.

Epic said in the suit against Apple that it is not seeking monetary damages, but instead wants injunctive relief “to allow fair competition.” As developers are prevented from selling or distributing iOS apps unless they use Apple’s store and agree to the fee structure, they then increase their prices in a bid to compensate for the 30 percent tax.

“Apple thus requires third-party app developers to agree they will not even offer iOS users the choice of additional payment processing options alongside Apple’s. And Apple goes so far as to gag app developers, preventing them from even mentioning to users the option of buying the same content outside of the app — for example, by purchasing content directly from the app developer, or using a web browser,” states the suit.

Were it not for Apple’s unchecked power, Epic says it would provide a competing app store on iOS devices, which would allow iOS users to download apps in an “innovative, curated store” and would provide users with the choice to use Epic’s in-app payment processing tool or that of another third party.

In its suit against Google, Epic maintains that “this case is about doing the right thing in one important area, the Android mobile ecosystem, where Google unlawfully maintains monopolies in multiple related markets, denying consumers the freedom to enjoy their mobile devices — freedom that Google always promised Android users would have.”

Google’s Play Store, according to the suit, becomes “an unavoidable middleman for app developers who wish to reach Android users and vice versa,” and that the 30 percent tax “siphons profits” and user data from all transactions, which in turn benefits Google’s app design and advertising operations. Google, said Epic, also has monopoly power in the market for mobile operating systems that are available for license by OEMs.

“Google stifles or blocks consumers’ ability to download app stores and apps directly from developers’ websites,” according to the suit. “As anyone who has tried to download directly on an Android device knows, it is significantly different than the simple process available on a personal computer: directly downloading Fortnite on an Android device can involve a dozen steps, requiring the user to change default settings and bravely click through multiple dire warnings.”

And, as is germane to payments, and Google: Epic levels the charge that Google also imposes anti-competitive restrictions in the separate Market for Android in-app payment processing.

“App developers who sell digital content for consumption within the app itself require seamless payment processing tools to execute purchases. App developers, including Epic, may develop such payment processing tools internally or use a host of payment processing tools offered by multiple competing third parties. But app developers are prohibited from offering Android users any choice in payment offerings,” according to the suit.

The Epic suits against Google and Apple. is facing a recent complaint in Europe via Telegram, a cloud-based messaging app that boasts more than 400 million users, alleging that Apple restricted Telegram from launching a gaming platform. In addition, in the EU there are two antitrust investigations delving into the App Store, and into complaints brought forth by Rakuten and Spotify over Apple’s commissions.

The movement to skirt app store fees now gives way to a full-fledged debate over Big Tech and market (and pricing) power – a debate that is increasingly waged through the use of lawyers and legal briefs.

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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