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Everyone vs. Apple

Technology

Isadora Teich wrote this article

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When it comes to matters of tech and legal proceedings, many people’s eyes tend to glaze over.

However, in today’s business world, particularly the business of apps, no one can really afford to take this approach. Tech advances, companies, and tools, and how we decide to legislate and regulate them affect the whole world profoundly.

Of course, every company has its strengths and weaknesses, and if you dig deep enough about any global corporation you will find some things to dislike. But, right now a lot of major high-profile legal problems are surrounding the Apple company, and what happens will have widespread industry consequences.

Let’s take a look.

The Infamous Apple Tax

One big general controversy to hit Apple lately is how their App store treats developers. They have been accused of applying rules unfairly, and using high developer fees to strangle the market and maintain control.

If you want to explore more of the specific complaints developers and companies have against Apple, check out our blog post on why we believe developer discontent will help fuel the rise of alternative app stores.

Essentially, many developers feel that they pay Apple hefty amounts of their earnings for a place in an oversaturated app store where it’s easy for their app to get lost. It’s not only small businesses that have their misgivings.

Spotify, Epic Games and Tinder owner Match Group collaborated with others to create the Coalition for App Fairness last year. They have run a multi-state lobbying campaign against Apple for months, which has led to state governments across the US turning their attention to limiting Apple’s power.

Last week, there was an interesting development in the case of Apple vs, well, everyone.

Bill SB 2333 Fails

This North Dakota Bill would have begun the road to destroying the power that the Apple Store and Google Play Store have over developers.

The bill would have made it illegal for any company in the software distribution business that earns more than $10 million a year to impose many rules on developers which are now standard.

They could no longer demand that developers put their apps in only one store or use their specified payment systems which allow them to collect up to 30% of the revenue that apps generate.

This bill was important and highly-contested for a few reasons. For one, developer fees are a huge part of the way that Apple makes money. In 2020, the Apple tax alone netted the company more than $60 billion in revenue. Obviously, Apple does not want to lose this stream of revenue.

Apple’s chief privacy engineer, Erik Neuenschwander, testified that the bill “threatens to destroy iPhone as you know it,” and would “undermine the privacy, security, safety, and performance that’s built into iPhone by design.”

This Is Far From The End Of Apple’s Problems

While SB 2333 ultimately did not pass in North Dakota, the broad language of the bill meant that it would have likely forced Apple to make changes across the nation.

And, it has sparked the interest of legislators across America, who are looking to limit the power of major app outlets.

Similar bills are in the works across the country already, for example in Arizona and Georgia.

And, on top of this, Apple is also facing widespread international pressure.

Epic Games Takes The Fight To The EU

Epic Games has long been in a tussle with Apple and Google, after they removed their hit game Fortnite from their stores. This was in response to Epic Games breaking terms of service by trying to skirt store fees.

Last week, Epic Games made a formal antitrust complaint to the European Union. In a company announcement titled “Europe, Free Fortnite,” Epic games said:

The complaint, filed with the European Commission’s Directorate-General for Competition, alleges that through a series of carefully designed anti-competitive restrictions, Apple has not just harmed but completely eliminated competition in app distribution and payment processes. Apple uses its control of the iOS ecosystem to benefit itself while blocking competitors and its conduct is an abuse of a dominant position and in breach of EU competition law.

As such, Epic Games says it is not seeking monetary damages from Apple, but for the situation to be fixed, and the world to open up to alternative app stores and payment methods outside of the control of Apple.

Epic Games is currently taking direct legal action against Apple in the UK, EU, US, and Australia, as well as being a part of lobbying efforts in the US.

As of Now, Apple and Epic Games will face off in court in May.

Apple’s Response

Of course, in any disagreement, there are opposite sides with opposing perspectives.

Apple has been quite dismissive of Epic Games. In a 37-page opposition brief Apple essentially says that Epic Games is the source of its own problems, not Apple. Apple has policies and rules, and any developer who breaks them can be banned from the store.

Epic Games broke the rules by trying to get around the Apple tax, which all developers have to pay, so their app was removed.

Apple says that the company’s injuries are self-inflicted, and that if Epic Games decides to follow Apple’s rules, they can come back whenever they want. They wrote in their brief:

“Epic started a fire, and poured gasoline on it, and now asks this Court for emergency assistance in putting it out, even though Epic can do so itself in an instant by simply adhering to the contractual terms that have profitably governed its relationship with Apple for years.”

Apple says that by refusing to do so, Epic Games is “holding its own customers hostage to gain leverage in a business dispute.” They also accuse Epic Games of doing this for attention, because the popularity of their app Fortnite is fading.

Final Thoughts

There really are two ways of looking at the situation. Do you think that if you sign up to use a service, you agree to its terms, and if you break them, it is that company’s right to expel you in all situations? In this case, Apple had every right to boot Fortnite from its stores.

Or, do you think that Apple has a dangerous monopoly over digital apps, and it needs to be addressed and legally broken up?

Regardless, what happens, will have an impact that is far larger than just Epic Games.

With anti-Apple sentiment piling up and legal cases against the company on multiple continents, it is likely that some kind of change is inevitable. What this will mean for app users, developers, and businesses has yet to be seen.

About ChopDawg.com: Since 2009, we have helped create 350+ next-generation apps for startups, Fortune 500s, growing businesses, and non-profits from around the globe. Think Partner, Not Agency.

 

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