In August 2020, Epic Games, creator of the hit video game, Fortnite, released a parody of the iconic Apple TV ad called Apple 1984. The mission was for David to take down Goliath and Epic Games’ parody was a play on the famous book ‘1984’ by George Orwell, with the video game publisher painting the tech giant as Big Brother.
The case for the need to regulate big tech is stronger today than ever before.
This feud began last year, when Apple removed Fortnite from its app store after Epic Games tried to avoid the 30% cut that the company takes from transactions. Users were given the choice to pay Epic directly for their purchases and receive 20% in savings as payment processing savings were passed onto the consumer. This has resulted in Fortnite also being removed from the Google Play store, with new users being unable to purchase the game on their devices. In a statement titled ‘Free Fortnite,’ the developer explains that users should have freedom of choice when installing games and choosing who to pay for a product. They also accused Apple of collusion, suppressing free market competition and price inflation, pointing out that Apple’s policies are so restrictive that they directly impact innovation and stifle creativity within the gaming world. Epic Games has now taken the fight forward and filed an antitrust complaint against Apple with the European Commission, which is set to go to trial in May. Epic Games’ CEO, Tim Sweeney explains how this is a breach of EU law, with Apple’s anti competitive measures can be seen as an abuse of power as smaller developers and studios cannot keep up with or fight Apple, which has long been criticised in the EU and US under antitrust or competition law. Fellow tech giant Microsoft has backed Epic Games, arguing against the suspension of Epic Games’ technology ‘Unreal Engine,’ which is key for many developers including Microsoft itself and would result in substantial costs for those relying on the framework. Having Microsoft in its corner will provide the Fortnite creator with some much needed firepower and help in its fight. When it goes to court, Epic Games does not expect to ask for damages, but instead wants fairer practices to be established and adhered to and for dominant players to be prohibited from imposing practices which are unsustainable for others. In its statement, the developer also calls for a more equal playing ground to be created and highlight their commitment to continue fighting in order to ‘secure lasting freedoms.’
Power moves, such as binding those who sell their apps via the App store and unfair pricing have long been part of Apple’s strategy to maintain their market position. In July 2020, Telegram, which has quickly become an attractive rival to Whatsapp, also filed an antitrust suit in the EU, against Apple’s 30% commission fee. The ‘Apple tax’ has also been criticised by Spotify and Rakuten, with the former claiming that this gives Apple Music an unfair advantage over other music streaming services. Apple has argued that the commission that it charges help keep the App Store running and released a report stating that in 2019, the App Store brought in more than $500bn in sales and billings worldwide.
Unfortunately, Big Tech has the financial strength and the clout to stamp out competition and potential rivals are left without much choice and do not have the ability to fight them. The case for the need to regulate big tech is stronger today than ever before. Markets alone have not proven to be a sufficient impetus for the power equilibrium and there remains a dire need for the influence and position of these companies to be checked by a regulator with a specific mandate.