Apple removed the game Fortnite from the App Store on Thursday after its developer implemented a payment option designed to avoid paying the tech giant a commission.
Epic Games announced earlier Thursday it was offering a “Mega Drop” Fortnite discount of up to 20% on in-game purchases. As part of that, it rolled out a new in-app payment option that bypassed the procedures in the Apple App Store and Google Play store. Apple and Google each take a 30% commission on purchases made in their app stores. Fortnite instead offered users the option to save money by paying it directly, in a move that appears designed to force a confrontation.
Apple responded by removing Fornite from the App Store. Epic then announced it had filed a lawsuit against Apple alleging “anti-competitive restraints and monopolistic practices” related to software distribution and payment processing.
“Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app,” the lawsuit alleges.
“Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users,” said an Apple spokesperson in a statement. “As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.”
Epic Games also appeared to taunt the tech giant on Twitter by sharing an image for an event it dubbed “Nineteen Eighty-Fortnite,” an apparent reference to Apple’s famous “1984” ad.
Epic CEO Tim Sweeney previously complained about Apple and Google’s fees to the Verge in 2018.
“It’s time for change,” he said. “Apple, Google, and Android manufacturers make vast, vast profits from the sale of their devices and do not in any way justify the 30% cut.”
Apple’s statement said the company “will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store.”
Fortnite is both a massively popular game and a cultural juggernaut. In May, Epic announced it has more than 350 million registered users.
Don’t expect an ‘explosion of cases’ from China’s antitrust push: Professor
Jack Ma, founder of Alibaba Group, attends opening ceremony of the 3rd All-China Young Entrepreneurs Summit on September 25, 2020 in Fuzhou, Fujian Province of China.
Lyu Ming | China News Service via Getty Images
SINGAPORE — China’s latest antitrust push will not likely lead to a “sudden explosion of cases” against online platforms, according to legal expert Angela Zhang.
Her comments came after shares of Chinese tech giants like Alibaba, Tencent and Meituan were rattled earlier in November following the release of draft rules by Beijing that defined for the first time what constitutes anti-competitive behavior.
“It’s a bit early to tell what is the next step the government is going to take but … at least this is kind of signaling a trend of stricter regulatory enforcement over these tech businesses,” said Zhang, who is associate professor of law and director of the Center for Chinese Law at The University of Hong Kong.
Commenting on the potential impact of the draft anti-monopoly rules, which are currently in a public consultation stage until Nov. 30, Zhang told CNBC’s “Street Signs Asia” on Monday that there are two factors to keep in mind.
Firstly, such investigations typically involve a “lengthy process” and Chinese agencies could take a long time to complete an investigation, Zhang said.
“The last big case that they brought against Tetra Pak took almost five years to complete,” she said referring to the Swedish packaging firm that was slapped with a fine of about $97 million by Chinese regulators over anti-monopoly practices.
Secondly, Chinese agencies are “very thinly staffed,” she added.
“We shouldn’t expect … a sudden explosion of cases against these online platforms,” Zhang said, as it would “consume a lot of time” and human resources for government agencies to bring any big cases against the tech giants.
As for competitors, the professor said they may pursue their cases in court, though so far no plaintiff has successfully launched an antitrust case against the online platforms. It also “remains to be seen” how judges will interpret the issues.
Still, she admitted that many details “remain to be finalized” and it is still not known when the new rules will actually be announced. Even when the new rules are released, they will only be “guidelines” and won’t change existing regulatory frameworks.
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Apple security chief accused of bribing officers in exchange for gun permits
Steve Proehl | Corbis Unreleased | Getty Images
A grand jury in Santa Clara, California, issued an indictment on Monday accusing Apple’s chief security officer, Thomas Moyer, of offering bribes to secure concealed carry permits for Apple employees.
Moyer allegedly promised to donate 200 iPads worth $70,000 to the Sheriff’s Office in exchange for four concealed weapons (CCW) permits “withheld from Apple employees,” according to a press release from the Santa Clara District Attorney Jeff Rosen.
“Tom Moyer is innocent of the charges filed against him. He did nothing wrong and has acted with the highest integrity throughout his career. We have no doubt he will be acquitted at trial,” Moyer’s lawyer Ed Swanson said in a statement to CNBC.
Apple didn’t immediately respond to a request for comment.
The charges filed on Monday are part of an investigation dating back to 2019 into whether or not the Santa Clara sheriff uses concealed carry permits to help solicit bribes and political donations. The sheriff’s office covers Cupertino, California, where Apple’s headquarters is located. Moyer has worked at Apple for 14 years and is now its head of global security, his lawyer said on Monday.
The Santa Clara DA said that while state law says that people who receive concealed carry licenses in California need to demonstrate “good cause,” as well as a firearms course and have good moral character, the sheriff has the final say in determining who should qualify.
“Ultimately, this case is about a long, bitter and very public dispute between the Santa Clara County Sheriff and the District Attorney, and Tom is collateral damage to that dispute,” Swanson said in a statement on behalf of Moyer.
The Santa Clara DA alleges that officials in the Santa Clara County Sheriff’s office, Undersheriff Rick Sung, and Captain James Jensen, were part of a scheme where they solicited bribes in exchange for easier approval of concealed carry permits. An insurance broker with political connections in San Jose was also charged with offering bribes in exchange permits on Monday.
In 2020, an investigation from NBC Bay Area found that donors to the Santa Clara Sheriff’s political campaigns were about 14 times more likely to get a concealed weapons permit than those who didn’t contribute. Sheriff Laurie Smith hasn’t been charged. Previously, four people were charged with conspiracy and bribery in August as a result of the investigation.
The promised donation of the iPads was never fulfilled, according to the Santa Clara DA, because it was scuttled after a search warrant was executed for concealed carry records at the Sheriff’s office in August 2019.