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Fortnite’s Epic Games brings Apple legal fight to Australia

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Epic CEO Tim Sweeney told The Sydney Morning Herald and The Age that while smartphone app stores were a novelty 12 years ago, and a 70 per cent take was a good deal for developers, a huge chunk of the world’s economy would soon be processed through mobile platforms and change was sorely needed.

“Apple has said they have the legal right to do whatever the hell they want because they make the devices. Under Apple’s legal theory they could charge 90 per cent. The very notion that they’re standing on is antithetical to free markets and competition,” he said.

“Apple is essentially using its control of the hardware to force all commerce to go through them, against the will of developers and also against the will of consumers. What’s happening in the tech industry is really destructive. It needs to change rather fast.”

Epic CEO Tim Sweeney says Apple's App Store practices breach Australian concumer law.

Epic CEO Tim Sweeney says Apple’s App Store practices breach Australian concumer law.

Epic – which in addition to publishing games operates a storefront on PC and makes the popular 3D creation tool Unreal Engine – is not seeking damages but wants to see mobile platforms opened up to alternative stores and payment processing methods, on equal terms for all developers, forcing Apple to compete in a free market.

Epic chose to expand its litigation in Australia specifically, Mr Sweeney said, because of its strong legal system and regulatory framework.

“It’s another set of laws under which Apple’s practices are clearly in violation. And another chance to get this issue really throughly examined,” he said. “And also there’s a really big and growing mobile software industry in Australia, a lot of great game developers, and they all suffer dearly by Apple and Google’s 30 per cent tax. I doubt there’s a single developer in Australia who makes more profit from their own games then Apple and Google make from their games.”

In a statement, Apple defended the App Store commission structure and indicated it would vigorously defend its position. “Epic has been one of the most successful developers on the App Store, growing into a multibillion dollar business that reaches millions of iOS customers around the world, including Australia,” it said.

“In ways a judge has described as deceptive and clandestine, 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 that apply equally to every developer and protect customers. Their reckless behaviour made pawns of customers, and we look forward to making this clear to Australian courts.”

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iPhones make up an estimated 55 per cent of all mobile devices used in Australia. In September the Australian Consumer and Competition Commission said it was taking a closer look at Apple and Google’s tight grip on mobile app marketplaces and in-app purchases

In the US Epic has also made complaints against Google, which it says engages in similar anti-competitive behaviour by creating friction on Android devices when users choose to use alternatives to its own Play Store. In Australia the complaint is focused on Apple, but notes the duopoly of smartphone ecosystems means developers and consumers have no material way to avoid the issue.

“You have two companies that together are dominating commerce, and extracting taxes that are a factor of 10 higher than free market competitive payment processing services like MasterCard and Visa,” Mr Sweeney said.

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Since the inital conflict in August, Epic has been leveraging Fortnite‘s popularity to desseminate campaigns likening Apple to the dystopian regime in George Orwell’s 1984. Mr Sweeney, who founded Epic off the back of games he wrote himself on an Apple II and disseminated via floppy discs, said the younger generation deserved the same opportunities and freedoms he had in 1991.

While Mr Sweeney praised Apple’s mobile operating system as the most secure ever for consumers, he said the company’s claims that it opposed a free market on its devices because of the risks to users’ data privacy were “total baloney”.

“It’s the permissions based security model that keeps an app from siphoning your data away without your permission, and that will remain completely robust in the presence of store competition,” he said.

“That FUD (fear, uncertainty and doubt) that Apple tries to create really irks me. Apple’s out telling everybody that their platform would be ruined and be insecure if other stores were allowed to compete with their store, and that’s complete BS. Apple programmers know that’s not true.”

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Mr Sweeney says he’s keen for Fortnite to return to iPhones as soon as possible, but that Epic was totally committed to letting users pay directly at a lower rate.

“We feel that if we don’t do that, then we’re really at that point colluding with Apple to protect their monopoly on software distribution,” he said.

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