In Battle Royale against Apple, Spotify and Match Group throw support behind ‘Fortnite’-developer Epic Games

In Battle Royale against Apple, Spotify and Match Group throw support behind ‘Fortnite’-developer Epic Games

14 Aug    Finance News

“Fortnite” creator Epic Games is geared up for a bona fide dust-up against Big Tech, and it is winning the support of other prominent app developers in the process.

Spotify Technology Inc. SPOT, -0.92% and Match Group Inc. MTCH, +1.15% recently issued statements in support of Epic, which filed suit against Apple Inc. AAPL, -0.08% and Alphabet Inc.’s GOOG, -0.70% GOOGL, -0.79% Google late Thursday alleging monopolistic practices.

The tech giants, which represent the world’s two dominant smartphone operating systems, pulled “Fortnite” from their app stores for violating their rules on in-app payments after Epic tried offering discounts on in-game currency for players who bypassed Apple and Google with their purchases.

“We fully support Epic Games’ efforts…to show how Apple uses its dominant position and unfair policies to hurt consumers, app developers and entrepreneurs,” a Match Group spokeswoman said in a Thursday statement. “Regulators across the globe have expressed similar concerns and are examining” what some describe as “Apple’s arbitrary practices.”

A Spotify spokesperson said that the company “applaud[s] Epic Games’ decision to take a stand against Apple and shed further light on Apple’s abuse of its dominant position.” The streaming music giant argued in its Thursday statement that “Apple’s unfair practices have disadvantaged competitors and deprived consumers for far too long.”

Facebook Inc. joined in on the criticism as well, with an executive telling Bloomberg News that Apple didn’t waive its 30% fee or allow Facebook to use its own payments tool on a new feature that the social-media giant was rolling out to allow businesses to host virtual events. Alphabet also isn’t waiving the fee but will allow Facebook to use its own payment processing tool, according to the Bloomberg piece, and Facebook isn’t taking a revenue cut from this feature.

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Microsoft Corp. weighed in even before the Epic saga after Apple determined that the company couldn’t list its xCloud game streaming service in the App Store because Apple wouldn’t be able to review all of the games made available through the service. Microsoft argued that Apple “consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content,” according to a statement quoted by The Verge.

Both Apple and Google keep as much as 30% of all purchases of digital goods made in apps that were downloaded through their app stores, a practice that is garnered increasing pushback from developers and government officials. Spotify filed an antitrust complaint against Apple in Europe last year, arguing that the company’s App Store payment policies made it difficult for other apps to effectively compete against Apple Music.

Regulators are looking into Apple’s App Store practices, which were also a focus of a House of Representatives antitrust hearing last month. Lawmakers questioned Apple Chief Executive Tim Cook on the company’s App Store “take rates” and what would prevent the company from increasing its cut of App Store-related purchases down the line.

Read more: Antitrust questions bruise but don’t break Big Tech CEOs in historic hearing

Apple said in a Thursday statement following “Fortnite’s” removal that its App Store guidelines are “designed to keep the store safe for our users” and that the company “will make every effort to work with Epic to resolve these violations so they can return ‘Fortnite’ to the App Store.”

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Match Group, which operates Tinder and other dating apps, could be a prime beneficiary of more developer-friendly app store practices, analysts have said. In general, developers pay Apple a 30% cut of digital service revenue for the first year of a recurring subscription and 15% for all remaining years, but many dating app users aren’t signing on to paid plans for multiple years, meaning Match may be paying the full 30% more often than some other developers.

Apple shares have gained 48% over the past three months as the Dow Jones Industrial Average DJIA, +0.12% has risen 18%.

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