Monday December 4, 2023

$100B App Market at Stake in Apple-Epic Battle

  • The trial between Epic Games and Apple began on Monday.
  • The case concerns commission fees on in-app purchases.
Fornite/Design: Alex Brooks
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The trial between Epic Games and Apple began on Monday. The case concerns commission fees on in-app purchases that could impact as many as 1 billion customers. 

The antitrust case is a result of Epic circumventing Apple’s 30% commission fee on in-app purchases on its App Store. Believing the fee represented a monopoly, Epic redirected in-app purchases on its popular video game “Fortnite” to itself through a hotfix. 

As a result, Apple removed “Fortnite” from its App Store, prompting Epic to sue in federal court. If Epic is successful, it sets a precedent in the $100 billion app market for companies to avoid commission fees from tech giants like Apple. 

“Apple is not a monopolist in any relevant market,” said Apple in court documents. “Epic just wants a free ride on Apple’s innovation.” 

Top executives have been listed as witnesses in the case, with Apple CEO Tim Cook and Epic CEO Tim Sweeney both expected to take the stand. This would mark Cook’s first time giving testimony at a trial. 

Numbers behind the court battle:

  • Between 2018-20, Epic earned roughly $1 billion from “Fortnite” and other iOS apps before paying the 30% fee to Apple. 
  • “Fortnite” generated more than $700 million from iOS customers during its two years on the App Store. 

In April, Epic completed a $1 billion funding round, bringing the company’s valuation to $28.7 billion. However, Epic has a tough opponent in Apple, whose market value has risen to more than $2.2 trillion, bringing in an average of $30 billion in revenue a month.

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