By Jack Nicas, Kellen Browning and Erin Griffith | New York Times
Apple’s spat with app developers over its cut of their revenues exploded into a high-stakes clash on Thursday when Apple kicked the wildly popular game Fortnite off iPhones and the game’s maker hit back with a lawsuit.
The fight began on Thursday morning with a clear provocation. Epic Games, the maker of Fortnite, started encouraging Fortnite’s mobile-app users to pay it directly, rather than through Apple or Google. Those tech giants require that they handle all such app payments, so they can collect a 30 percent commission, a policy has been at the center of antitrust complaints against the companies.
Hours later, Apple responded, removing the Fortnite app from its App Store.
Antitrust regulation is full of unclear and subjective standards. Apple may question the proper definition of the allegedly monopolized market. Is the market for iPhone apps separate from the market for phone apps generally? The market for iPhones is not separate from the market for phones. But iPhones are all made by Apple and iPhone apps are not.
Also, maybe there is an illegal tying arrangement. Products are tied when they can only be purchased together, like how Cable TV providers forced people to buy basic cable if they wanted HBO. But not all tying arrangement are illegal – generally only when they are anticompetitive.
In the end, I doubt Apple wants a decision on the merits of this case. Without settlement, there are only two possible outcomes and one of them kills the App Store as we know it.
I predict this case settles confidentially after Apple fights enough to dissuade similar claims. Fortnite will go back on Apple’s App Store, Apple will continue to process payments, but confidentially for a reduced fee.
But who knows? I don’t have any monopoly on the truth.
– Logan Elia, Rose Law Group Partner and Attorney
