Following your logic, Fortnite's add-ons should clearly be free since the cost to make and sell them is minuscule in comparison to 400M Epic made in April alone [0].
No one is saying that Epic are doing bad things in order to maintain their monopoly position.
Epic doesn't have a monopoly on any market.
People ARE saying that Apple are doing bad things to maintain their monopoly position, and others are justifying that by saying that "running a business is expensive" as if that justifies a monopoly or monopolistic actions.
> Epic has a monopoly on selling items inside Fortnite.
3rd party artists can't create anything that can be used inside Fortnite, neither inside the v-bucks store nor outside of it. There's no 3rd party "market" at all.
Apple has a market where third parties can market their apps. Apple requires a cut of all purchases made through that store, which alone is not monopolistic. Apple also requires that you sell your iOS app and any iOS in-app purchases only in their marketplace. That's the monopolistic part.
No one can create 3rd party items for Fortnite at all, so there is no monopoly on where 3rd party items for Fortnite are sold.
It's not even illegal to have a monopoly; it's illegal to use your monopoly powers to keep other parties from competing, and that's exactly what Apple has done.
So, let's say hypothetically Epic allowed the sale of third-party skins in Fortnite. Would a skinmaker would be entitled to demand the following concessions?
1. The ability to install skins outside of the V-bucks store.
2. The ability to pay for Fortnite skins using payment methods other than V-bucks.
Alternatively, should Epic not be permitted to impose the following restrictions in their Fortnite store?
1. Skins must be approved by Epic before they can be sold. No x-rated skins, etc.
2. Epic will take a 30% cut of each skin sold.
What if I'm a skinmaker that wants to compete with Epic because I think I can provide higher quality Fortnite skins than they have made. Should I be able to demand to participate in the "Fortnite skin" market which is currently 100% controlled by Epic?
Not all monopolies are created equally. Some have greater cost to society. For example, Qualcomm has an essential patent which grants them a monopoly over certain communications technologies but it has been mitigated by requiring them to license it in a fair, reasonable, and non-discriminatory (FRAND) way.
A monopoly by Standard Oil was pervasive in all of daily living because by the early twentieth century, they had control of more than 90% of the country's petroleum fuel production and logistics which they abused to keep any competition from ever gaining a foothold. By 1911, they were dissolved by the Supreme Court as per Sherman Antitrust Act.
VBucks and Fortnite are not pervasive in all of daily living, it is a tiny market and the monopoly is one which can easily be managed by society without breaking up the company.
> it has been mitigated by requiring them to license it in a fair, reasonable, and non-discriminatory (FRAND) way.
Writing it in passive voice makes it look like there is some governmental force at play that made them license on FRAND terms. They voluntarily agreed to that in negotiations with a standards body/industry consortium which otherwise would not have agreed to utilize their technology in a communication standard. The trade-off is they benefit automatically by getting distribution and licensing the technology to a lot of people that need to implement that standard.
> A monopoly by Standard Oil was pervasive in all of daily living because by the early twentieth century, they had control of more than 90% of the country's petroleum fuel production and logistics which they abused to keep any competition from ever gaining a foothold.
The key point here is that 90% market share constituted monopoly power, whereas Apple's 46% share of the smartphone market likely does not.
I'm not sure why you think this? Sure, certain Sherman Act violations (e.g. price fixing) do not require monopoly power to be considered illegal, but the specific claims in Epic's lawsuit (unlawful monopoly maintenance) definitely require proof of monopoly power.
“Conspiracy in restraint of trade” would fit perfectly what Apple/Google are doing.
The average American spends some what, 4-5 hours a day on their phone? Is there any even remotely comparable precedent for a company to control all trade through everything? The best I can think of is cable, imagine if there were only two cable companies and they not only had unilateral ability to control which channels appear, but also charged 30% to every channels profit.
Further, how many different commercial activities do people do every single day on their devices? This is a far, far bigger thing than any platform before it. And it’s dominated by only two companies with a history of collusion. These platforms are nothing at all like “a market” and trying to argue from narrow historical frames is poor form.
They are far bigger things. It’s more akin to a world, people use them for literally every part of their lives. I don’t think narrow precedent should ever rule our thinking and especially when it’s clear there is no historical precedent here. We need to be “courageous” enough to use moral and logical thinking and not legalistic weaseling, we need to legislate them as new types of markets far bigger and more important to every persons life than any that’s ever existed.
> “Conspiracy in restraint of trade” would fit perfectly what Apple/Google are doing.
Proving a conspiracy claim requires two parties to knowingly participate in the conspiracy. While you may believe Apple and Google are conspiring together there is a reason Epic's lawsuit does not make any conspiracy claims - their lawyers know they'd never be able to win such a claim.
At any rate that is irrelevant to my point: Epic made several claims in their lawsuit that will require proof of monopoly power.
You shifted from arguing from a purely theoretical view (if Epic had a market should they be regulated) to now arguing a very narrow view local to this case. I’m arguing the big picture, so feel free to engage there or not.
Sure, Epics specific case may be the only strategy they can take - they won’t find any documented collusion when there’s only two players, that’s obvious. They already colluded to suppress wages. We can all see what’s happening. You’re arguing semantics on one side then arguing generalities on the other. But let’s call a spade a spade: theres no smoking gun, but they are colluding, it’s just a silent “don’t lower yours and I won’t lower mine” nod.
Edit: further, with the amount of lock in they each have, there’s not much pressure anyway. It’s just not comparable to anything really that has existed beyond Windows/Mac which were/are entirely open. And it goes even further. Mobile phones are on people at all times. They do way way more. You have accounts with hundreds of apps, services. It’s just not a comparable thing, it’s a world with big lock-in.
I mean, you changed the topic to whether antitrust cases require monopoly power, which I acknowledged wasn't required for certain types of violations such as price fixing, but is required for the original topic being discussed in this thread, which is Epic and their lawsuit against Apple.
How are they colluding? Both google and apple seem to be trying to commoditize each other's (very different) cash cows and both are mostly failing at that. At least, google is failing miserably to make a dent in smartphone hardware, apple seems to struggle with software services, but maybe not as badly as google is at hardware.
Apple has a 100% monopoly on the market for iOS app distribution, which can be argued is bad for the customer because the 30% revenue share they take is inflating app prices.
People keep saying this but in an antitrust case you cannot simply declare the narrowest market that fits your argument and expect the court to accept it. The court will examine the market reality and examine how consumers actually behave to determine what the actual relevant market is, and it's unlikely that a court would find "iOS app distribution" to be a separate and relevant market for antitrust purposes. I've explained why in detail elsewhere [1], but in short, the US legal system generally does not consider an aftermarket consisting of a single brand's product to be a relevant product market unless specific rules are met:
> Because it would be inappropriate to punish a firm for its natural monopoly in its own products, courts embraced a sweeping prohibition against analyzing alleged anticompetitive activity by focusing on single-brand relevant markets: "[A]bsent exceptional market conditions, one brand in a market of competing brands cannot constitute a relevant product market." [2]
For a much more thorough explanation see my linked comment below.
Not being a pure monopoly doesn't prove that Apple doesn't have market power. Moreover I don't think people are saying that Apple has a monopoly of smartphones.
The argument is that Apple is using their market power to set prices that seems well above the marginal cost. And they also have created policies that prevent competition in their store. Imagine Windows not allowing any apps unless they give them a 30% cut.
I think it's a very American perspective to see this as black or white. You should be able to tell something is wrong by looking at what Apple is doing. Looking at how Fortnite operates does not give me the same feeling. Obviously Fortnite as a platform is not the same as iOS as a platform, and holding monopoly positions for each yield completely different outcomes. They are not equivalent.
Regulation is a blunt tool - it not enough to just feel they are not equivalent. Any law that may apply to Apple will apply to everyone else as well. The American perspective is that the government should not pick and choose winners
Isn't Fortnite a free online game? How is that comparable to a general-purpose computer that the consumer bought and owns?
If skins are what I imagine they are, Epic needs oversight over which ones players are allowed to use because they affect the experience of other players. And Epic provides Fortnite gratis specifically so that they can sell premium features like skins, so it seems completely reasonable that they would take a large cut out of third-party sales of those features.
To be analagous to IOS devices, Fortnite would have to be a single-player game that players bought a copy of. In that case, I think people would be right to be upset if Epic prevented them from getting skins through some other channel.
Once you decide to shop at wall-mart you can easily switch to other markets or buy items from other stores. not comparable at all.
If there were basically only Wall-Mart and Target to buy stuff from, and you had to commit to one for 2-5 years every time, you bet they should be under heavy scrutiny.
Sony and Microsoft are a better comparison, but different because 1) their consoles are huge loss leaders, phones are not and 2) they are way less essential and used by an order of magnitude less people than phones.
But the irony is that loss leaders are a sign of market abuse / market power. That's the normal anti-trust claim - predatory pricing. If anything, Apple is charging a premium price for their experience.
Apple has become essential and trusted in part perhaps because it has exercised near iron control over almost all aspects of their platform.
Dude, you don't need to buy an iphone, you don't need to by an xbox, you don't need to buy a playstation - if you do though you will be using their stores / they will be getting a cut.
If I buy Apple phone I can't sideload app. At all.
How ia this not a monopoly.
Also why you bring xbox into picture. It's a gaming console not a general purpose device ppl use 4+hrs in a day.
They can have their cut buthe issue that you're ignoring is that they don't allow side loading and that they can randomly kill any app they want. Like they have done in the past and small developers don't have the money Epic does
Depends on what you define as their game store. I can purchase a game that is playable on the xbox from anywhere that sells a copy. One of these places is the digital store that comes with the xbox. But I can also go to cd-keys, or amazon and buy a copy there that will still work on an xbox.
That's a licensing fee and separate to the discussion about market control. As it stands (although this is starting to change) a developer can sell the game through a variety of different avenues (online, brick and mortar, the xbox store), these avenues may have different prices associated and drive where the consumer makes their purchase.
That is the relevant comparison here, if Epic want to provide Fortnite on iOS they HAVE to use the app store and associated requirements. If they want to provide it on XBox, they pay a licensing cost for the proprietary tech they leverage from Microsoft. But they can choose to sell the game on Amazon if they want.
Even if they sell the game on Amazon, they still pay Microsoft a royalty for each game sold. Whether you want to call it a "licensing fee" or a "Microsoft tax" seems like a matter of semantics. Also keep in mind that their publisher agreement with Microsoft gives Microsoft approval rights over the game itself, marketing materials, and even packaging. And if they sell virtual goods in the Xbox version of the game they have to go through the Xbox store and pay Microsoft 30% of that.
The amount of control console manufacturers exert over the games allowed on their platform is not dissimilar to the Apple and its App Store.
I don't think you realize the permissions game makers need to even sell a CD that works on xbox. If that CD is not signed off on by microsoft - total control -> it's not going to work in your console - period. And the irony - EVEN IF microsoft does not market / distribute or accept payment for the game (Apple does all of this) I can guarantee you Microsoft (and sony) get a cut.
Look at the PS5: the ability to put a disk in is a legacy that's clearly going away by Sony making it an option you'll have to pay extra for. The entry level model is digital only, for better or worse.
That's definitely true, and as they move away from physical media more scrutiny of what they are doing is required. But as it stands this isn't yet an issue for game consoles
XCode, the iOS software libraries and tools are all Apple products and are used to develop software for iOS. By requiring that Apple allow developers to distribute software outside the App Store with no revenue for Apple, you are requiring Apple to give away their products for free. On what basis do you or anyone else have that right?
Apple has a monopoly on how those products are sold and licensed because they are Apple products, in exactly the same way that Fortnite and it's marketplace are Epic products. There's no requirement for Epic to open that up, and if they do it will be on their terms. Their house, their rules.
How would you feel if your ISPs started wanting a cut of all money you made via the internet?
After all, it's their house so their rules...
Apple have carved out a significant market share of mobile users. They've locked down the OS so you can't install your own apps on it and they've crippled the browser so you can't build nice web apps. For businesses like Netflix, Spotify and Epic who's userbases arguably transcend the App Store, why should they pay the Apple Tax?
Apple doesn't "own" these users. But if you want to extend your services to them you have to pony up.
I don't expect to use my ISP's infrastructure for free. However most of that infrastructure was built using tax payer's money, on tax payer's land with special privileges granted by the government, and special tax incentives for improvements. In return we, the people, demand certain concessions and rules to compensate us. I'm actually in the UK, but the situation on this here and in the US are different in many details but in broad strokes are equivalent.
The iOS operating system, developer tools, platform libraries and the App Store and distribution system are all Apple products built by them on their own dime and at their own commercial risk. On what basis do you get to dictate to them what features they must or must not develop, what services they must be coerced to provide and what contractual relationships they are required to enter into? There's just no basis for that.
Fair enough but Apple and Google have essentially built out the entire mobile digital ecosystem. While I can empathise with the mindset that they should reap the benefits of investing and nurturing the platforms, they are also for all intents and purposes a duopoly so I am in favour of that control being wrested back into the hands of consumers and the relationship being renegotiated - the distribution platform of mobile software feels more like a public good than a private ecosystem given the way we depend on it
Ive explained why Apple's system is their product and therefore their property, and Ive explained why ISPs are a different case. I'm not seeing any attempt at all to seriously, coherently provide a credible counter argument that makes any actual sense.
The core point your parent was trying to make is that Fortnite is not an open market. No one but Epic provides goods to the Epic store. Apple allowing third party developers is the distinction being made.
Apple's platforms aren't an open market either. They allow third party developers to develop for their platforms, subject to you agreeing to their terms.
Agreeing to a TOS is a standard for open markets. Splitting hairs over a TOS existing is ignoring the fact that Epic doesn't allow third parties to sell in their market (with or without a TOS).
When you accept Apple's developer agreement, you're agreeing to a contract. It absolutely isn't an "open market" for any definition of what that means. Apple has exclusive control of their IP and they are offering a way for you to license it on their terms.
Regardless of what term you use it's a fact of reality that right now no one else but Epic can put content on the Epic Store which is not true of Apple and the App Store.
Which would be irrelevant since the original comment was that Epic had no monopoly on any market, and didn't specify the terms and conditions for a market to fit the argument.
It would be amusing if the outcome of this is that Epic has to allow outside sources of content in their games instead of having it in a vBuck walled garden. I'm sure many developers would be happy get a part of a billion dollar a year market without paying Epic a cut. Imagine the irony of everyone running around Fortnite in Apple store branded loot.
Epic is not putting up some legal crusade for the “little guy” competitors. Epic is putting up a fight for Epic.
It all comes down to money.
If Epic was running their own platform, and 3rd parties didn’t want to abide by their rules, then Epic would give those 3rd parties the finger and tell them to F-off the same as Apple.
Each is trying to grab as much profit as they can while running into the issue of other hands grabbing from the same basket.
The classic case of one’s greed versus another’s desire to be greedy.
I said the same thing in another thread. It's all about money.
But even though is all about money, a legislation change is still necessary. As long as the result of this benefits the society, who's pushing it shouldn't matter that much.
At the end of the day, antitrust process are frequently started by people with a lot of money and power to catch people with more money and power. That's the game.
> If Epic was running their own platform, and 3rd parties didn’t want to abide by their rules, then Epic would give those 3rd parties the finger and tell them to F-off the same as Apple.
What exactly is your point here? If <entity> was in Apple's position, they would protect their interests exactly as Apple is. Thats why we need to regulate companies who are in Apple's position! The fact that its greed vs. greed is immaterial.
You're right, but you're not. Yes, Epic is trying to make money. But if Epic is allowed to open their own store it would be very good for small developers. Those things aren't mutually exclusive.
If they manage to land their store on iOS, expect them to do the same anti-competitive things they did in the PC market... paying studios to exclusively put their games on the Epic Store only. Even games fund raised by communities, and games already announced to be launching on other platforms.
Because making content exclusive to a single platform is not adding value - it is removing value from other platforms, and as such is a net negative move.
It's not though. There is nothing inherently negative having to use EGS compared to any other game hub. There is absolutely nothing negative about giving developers more money to make more and/or better games. It's a net negative to take 30% from developers doing the actual work.
How is any of that anti-competitive? It's a fair competition between multiple app stores.
And Epic is also competing with Steam by having lower cut (5 % versus 30 % IIRC) leaving more money for the developers. It's good for the developers and consumers both.
It's a "gigantic win" for everyone in the same manner that Uber paying drivers and customers (via bonuses / free rides) to use their service was one for everyone involved . Sooner or later, Epic will have to stop doing this once they get their market share and there is no guarantee that this will be the financial model they follow (free games frequently, paying devs to be exclusive etc).
It works in a different context ( platform exclusives ) because the lock in / costs to developing for a different platform are far different from that for different stores on a single platform.
Somehow Facebook running a market on iOS marketplace where they funnel every click to their preferred apps with their own in-app payments and frameworks mandated doesn't sound like a developer win to me. It may not much of a user win if Epic installs DRM into your phone with cool features like an always on audio chat.
Small developers don't care about minuscule savings on their low sales numbers. They primarily care about getting as many sales as possible. The only ones who benefit are those who are selling lots of copies.
Epic is absolutely putting up a legal crusade for the little guy, whether or not it's motivated by their own personal gain. The lawsuit explicitly precludes special treatment for Epic.
Who cares what their motivations are if they've mandated that the benefits should be distributed?
They do run their own platform, the Epic Games Store, which is PC only but trying to compete with steam. Want to know how much cut they take in the Epic Games Store? For things worth £50+ rather than £0.99 in-app purchases?
It's 12%. They also allow selling games made with their competitor technologies (e.g. Unity), and the cut is still the same.
No! This is explained right at the beginning of the article:
> the question as to what is anticompetitive and what is simply good business changes as a business scales. A small business can generally be as anticompetitive as it wants to be, while a much larger business is much more constrained in how anticompetitively it can act
The word “monopolize” is used in a specialised way in antitrust; it doesn’t encompass every exclusive right of sale, because that would disrupt many small businesses and law is intended to prevent huge businesses from dominating the economy.
No. My point is not that they are a small business, it’s that they are smaller than Apple and selling into a different market. Thus it does not “follow,” from the proposition that Apple is a monopolist, that Epic is also a monopolist.
I think you've missed the point here. Neither Apple nor Epic have enough market share in their primary market (smartphones/games) to be considered monopolists.
So instead, people move the goalposts to an aftermarket of the product (iOS apps) and claim that Apple has a monopoly over that market instead. But every company has a natural monopoly over their own products, and by the very same logic you could claim Epic has a monopoly over the aftermarket of their product (Fortnite skins).
Selling virtual items is not especially common due to the exposure it creates to fraud and abuse. Fortnite doesn't allow selling or trading - games that do like Team Fortress 2 and Counter-strike Go are home to lots of scammers who try to trick teens and other uninformed players into giving away their valuable loot :(
Who are you going to buy from without giving Epic a cut? They're the only ones offering Fortnite items.
Apple doesn't just require you use their payment processor - which might in theory be acceptable - they also demand 30 cents on every dollar. Payment providers everywhere have shown that fraud and abuse can be mitigated to an acceptable level with transaction fees as low as half a cent on the dollar. So Apple forces you into an agreement to use a payment processor that is 30-60x more expensive than the competition simply because they can.
Correct for credit card transactions but not for gift card credit which A LOT of people use. Far more than you’d assume. Apple doesn’t get all $50 when you buy an Apple gift card. I’d be surprised if they even got net $40 per $50 card.
The physical cards cost money to produce and the retail stores will insist upon a decent cut. And then the cards are often discounted by 10, 15 or even 20%.
The difference is that if Fortnite abuses its power, it is relatively easy to build another MMORPG competitor. If Apple abuses its power, it's practically impossible to build another mobile platform to compete today. Even Microsoft failed with that.
The bottom line is that Fortnight can have practical competition (that for example offer 3rd party plugins or lower prices), while the iPhone only has Android as competition, which is taking the exact same 30% cut.
> it is relatively easy to build another MMORPG competitor.
Oh no it isn't. There are very few successful (and even fewer wildly successful) MMORPGs and countless failed attempts.
Games are not really fungible. It's not like I'm going to go out of Fortnite to buy items in WoW instead and treat them as the same. They are two completely different markets.
> The bottom line is that Fortnight can have practical competition (that for example offer 3rd party plugins or lower prices)
No, unless things change, you need to use the Epic store.
Sure, but if the community got sick of Epic's walled fortnite garden, they can play other games. Could be WoW, could be Call of Duty, could be Pubg, could be the latest Mario. It doesn't really matter. Fortnite competes for your time with all other games, and the main thing keeping people there, besides basic enjoyment of the game, is that a lot of people play with their friends. And not many people will say that certain in app purchases are essential item (unlike, say, having an email app on your phone).
iOS on the other hand has a single serious competitor, Android, and if you have an iPhone you can't install Android on it when you get mad at Apple - you need a whole new phone. From a developer's perspective, you would miss out on all the iPhone users if you ship and Android app and not an iOS one. In that sense, Apple has significant monopoly-like power over the app market; solidified by the fact that you can't just install Google play store and start downloading Android apps on your iPhone if you get fed up with Apple' App store. The switching costs are too high for most users to consider it, except when buying a new phone.
A lot of this comes down to what a meaningful market is. E.g. Border's and Barnes and Noble learned the hard way that they were in the same market as online book selling - you couldn't usefully look at their book store models and ignore Amazon in the last ~decade.
Regardless of the context, this is so good and hilarious on so many levels. Meme worthy! I’m going to have to try to work this quote into a conversation.
Fortnite is free. They release patches to the game weekly, with major patches every month or so, which are also free. The _only_ revenue stream in fortnite is cosmetic skins, which as a player you could ignore entirely and still play 100% of the game.
In fact, you can earn small handfuls of the premium currency every season, which actually allowed people to purchase premium skins or the "battle pass" with currency obtained for free.
There is no comparison to be made with Apple, who won't let you do a thing on the app store without giving them money.
Games have a limited shelf life. I don’t really care about Epic. Fortnite won’t be around much longer when the next big game du jour comes out.
Whether or not Epic charges for their store is immaterial to whether one of the largest and most important general purpose computing platforms in the world is performing highway robbery.
Not really sure why people are voting this down. It's self evident that Fortnite's "platform" is far more ephemeral than iOS. Team Fortress 2 is probably an example of a skins market that has been around the longest (since 2007), but very few games last this long and run a market that is still selling a lot.
This line of thinking is very reminiscent of “Facebook won’t be around much longer, it will be gone like MySpace”, many people still believe that as FB is now one of the most valuable companies in the world.
There is no reason to believe this will be true. Grand Theft Auto V is now 7 years old at this point and has seen 2 almost 3 console generations as generates an incredible amount of money for TakeTwo. The longevity of these platforms have clearly changed
Facebook is indeed not around much anymore, users have moved to Instagram. In fact I can't remember the last time I've seen someone under 30 using Facebook.
Give it 10 years and there will be again another large social network. Teenagers won't be on the same network as their parents.
I hear this argument often, but there are counterexamples like Minecraft, CSGO, World of Warcraft (one of the few MMOs that still have a subscription).
So it's entirely possible that Fortnite will stay.
Minecraft has arguably evolved into its own "platform" with people building and sharing their own worlds (some on Minecraft's own managed Realms, many not) and tons of third-party games built on top of Minecraft accessible to the public. Fortnite may evolve in this direction some day, but it hasn't yet.
It's all about updates. If there is new stuff to do, people will come back eventually. Maybe not every year but there are some games I've come back to every 2 years.
I don't follow. The game is free, "V-bucks" you buy, I think you just get character/weapon skins that aren't required. I don't love the setup, but since kids are hanging out on fortnite having it free lets everyone who wants into that world.
I think they're referring to swapping in funny money to obfuscate customer ability to estimate the costs.
It's similar to how slot machines require tokens, but I don't think that's quite gambling. The gambling part comes in with loot boxes, where you're essentially paying to roll the dice to get something of value.
Token slot machines used to be common prior to the early 2000s, but they were phased out mostly for cost reasons (minting tokens, refilling tokens, handling tokens, theft, etc). Cash ticket/cards quickly replaced them.
Some casinos still have an aisle or two of coin machines for nostalgia though. People collect these tokens, but I'm sure that hobby is on the way out since new mint is pretty rare.
It takes work to implement an ingame premium currency. The only reason to perform that work is because some business person thinks they have discovered a new way to claim that what they are doing "isn't gambling."
[0] https://venturebeat.com/2020/06/15/epic-games-shareholders-s...