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When the once-popular video game, Snake, was first available on cellphones in 1997, it was only available on select Nokia phones on which it was predownloaded from the factory.[3]<\/a> Today, Apple offers its users over 278 thousand gaming apps, available for download from its virtual, mobile-app storefront, the App Store.[4]<\/a> Google\u2019s equivalent, Google Play, offers over 385 thousand.[5]<\/a> Together, the two account for nearly 100% of the global smartphone market.[6]<\/a><\/p>\n <\/p>\n For an app to be made available on the App Store, a game developer must, among other things, agree to Apple\u2019s rules and meet its standards.[7]<\/a> The App Store then distributes the apps to Apple devices and continues to profit from the apps by taking a percentage of the sales made therein \u2013 30% during the app\u2019s first year and 15% during subsequent years.[8]<\/a>Apple requires these purchases to be made via In-App Purchase, which is a tool that \u201callows [a developer] to offer users the opportunity to purchase in-app content and features. Customers can make the purchases within [the developer\u2019s] app, or directly from the App Store.\u201d[9]<\/a> In 2019, the App Store reportedly paid out $35 billion to app developers after taking its share.[10]<\/a> Because of Apple\u2019s massive customer base and successful App Store, these transaction fees have grown Apple into one of the top-five largest gaming companies in the world despite not having made a single game of its own.[11]<\/a><\/p>\n <\/p>\n The rent that Apple charges for a spot in its marketplace, however, has been a topic of discussion for a few popular app developers who initiated antitrust inquiries into Apple\u2019s policy.[12]<\/a> Fittingly, Epic Games, the developer of Fortnite, has taken charge in the fight.[13]<\/a> Fortnite is a household name in the gaming world: it is a free-to-play, battle-royale game that offers multi-million-dollar prizes and, through its over 250 million users, brought in $1.8 billion in 2019.[14]<\/a> On August 13, 2020, in Epic\u2019s strategic approach to voice dismay with Apple, the developer: breached its App Store contract by including in its Fortnite update a workaround to the App Store\u2019s transaction fees; launched an anti-Apple campaign, which included a parody of Apple\u2019s \u20181984\u2019 ad; and filed suit after Apple delisted Fortnite from the App Store.[15]<\/a> The subsequent lawsuit has drawn widespread attention as Epic has gained support, not just from the gaming-app community, but from other app markets as well.[16]<\/a> It even gained support from Microsoft as it too has fought with Apple over the introduction of Microsoft games to the App Store.[17]<\/a><\/p>\n <\/p>\n Tim Sweeny, founder and CEO of Epic, argues that Epic\u2019s victory in the lawsuit would allow for consumers to pay less and for developers to earn more.[18]<\/a> In contrast, Douglas Vetter, Apple\u2019s Vice President and Associate General Counsel, argues that result would undermine the principle of the App Store\u2019s standards \u2013 \u201cto provide a safe, secure and reliable experience for users and a great opportunity for all developers to be successful.\u201d[19]<\/a> The suit may serve as a precedent for the similar suit that Epic filed against Google when Google Play delisted Fortnite for the same workaround.[20]<\/a> It follows that if it wins both cases, Epic will effectively change the entire smartphone industry.<\/p>\n <\/p>\n [1]<\/a> S. O\u2019Dea, iPhone Users as Share of Smartphone Users in the United States 2014-2021<\/em>, Statistica (Sept. 10, 2020), https:\/\/www.statista.com\/statistics\/236550\/percentage-of-us-population-that-own-a-iphone-smartphone (providing statistics of active iPhone users); Hirun Cryer, Here’s Everything We Know About the Epic vs Apple Lawsuit<\/em>, Games Radar (Nov. 3, 2020), https:\/\/www.gamesradar.com\/epic-vs-apple-lawsuit (providing anticipated trial date).<\/p>\n [2]<\/a> Josh Taylor, Apple to Reduce its Cut from In-App Purchases as it Faces New Lawsuit from Fortnite Maker<\/em>, The Guardian (Nov. 18, 2020), https:\/\/www.theguardian.com\/technology\/2020\/nov\/18\/apple-to-reduce-its-cut-from-in-app-purchases-as-it-faces-new-lawsuit-from-fortnite-maker.<\/p>\n [3]<\/a> 10 Things You Didn\u2019t Know About Mobile Gaming<\/em>, Windows (Jan. 16, 2013), https:\/\/blogs.windows.com\/devices\/2013\/01\/16\/10-things-you-didnt-know-about-mobile-gaming-2\/#:~:text=One.,called%20the%20Hagenuk%20MT%2D2000.<\/p>\n [4]<\/a> Christina Gough, Number of Gaming Apps in the Apple App Store from 1st Quarter 2015 to 3rd Quarter 2020<\/em>, Statistica (Oct. 27, 2020), https:\/\/www.statista.com\/statistics\/780238\/number-of-available-gaming-apps-in-the-apple-app-store-quarter\/#:~:text=This%20statistic%20gives%20information%20on,compared%20to%20the%20previous%20quarter.<\/p>\n [5]<\/a> Christina Gough, Number of Gaming Apps at Google Play from 1st Quarter 2015 to 3rd Quarter 2020<\/em>, Statistica (Oct. 27, 2020), https:\/\/www.statista.com\/statistics\/780229\/number-of-available-gaming-apps-in-the-google-play-store-quarter\/#:~:text=Google%20Play%3A%20number%20of%20available%20gaming%20apps%20as%20of%20Q3%202020&text=As%20of%20the%20third%20quarter,compared%20to%20the%20previous%20quarter.<\/p>\n [6]<\/a> Jason Cohen, iOS More Popular in Japan and US, Android Dominates in China and India<\/em>, PCMag (Sept. 4, 2020), https:\/\/www.pcmag.com\/news\/ios-more-popular-in-japan-and-us-android-dominates-in-china-and-india.<\/p>\n [7]<\/a> App Store Review Guidelines<\/em>, Developer<\/em>, Apple (Sept. 11, 2020), https:\/\/developer.apple.com\/app-store\/review\/guidelines\/#reader-apps.<\/p>\n [8]<\/a> Julia Alexander, A Guide to Platform Fees<\/em>, The Verge (Sept. 22, 2020, 8:05 AM), https:\/\/www.theverge.com\/21445923\/platform-fees-apps-games-business-marketplace-apple-google.<\/p>\n [9]<\/a> In-App Purchase<\/em>, Developer Documentation<\/em>, Apple (last visited Nov. 28, 2020, 6:00 PM), https:\/\/developer.apple.com\/documentation\/storekit\/in-app_purchase.<\/p>\n [10]<\/a> Kif Leswing, Apple\u2019s App Store Had Gross Sales Around $50 Billion Last Year, But Growth is Slowing<\/em>, CNBC (Jan. 8, 2020, 12:30 PM), https:\/\/www.cnbc.com\/2020\/01\/07\/apple-app-store-had-estimated-gross-sales-of-50-billion-in-2019.html.<\/p>\n [11]<\/a> Ross Krasner, Apple v. Epic Lawsuit Could Open Door to Third-Party Payments \u2014 Led by Esports<\/em>, Venture Beat (Nov. 3, 2020, 7:17 AM), https:\/\/venturebeat.com\/2020\/11\/03\/apple-v-epic-lawsuit-could-open-door-to-third-party-payments-led-by-esports.<\/p>\n [12]<\/a> Isobel Asher Hamilton, Apple Just Got Hit with 2 EU Antitrust Probes into the App Store and Apple Pay<\/em>, Bus. Insider (June 16, 2020, 6:29 AM), \u00a0https:\/\/www.businessinsider.com\/apple-two-eu-competition-investigations-2020-6?r=US&IR=T.<\/p>\n [13]<\/a> Erin Griffith, Apple and Epic Games Spar Over Returning Fortnite to the App Store<\/em>, NY Times (Nov. 18, 2020), https:\/\/www.nytimes.com\/2020\/09\/28\/technology\/apple-epic-app-court.html.<\/p>\n [14]<\/a> Akhilesh Ganti, How Does Fortnite Make Money<\/em>, Investopedia (Sept. 10, 2020), https:\/\/www.investopedia.com\/tech\/how-does-fortnite-make-money\/#:~:text=In%202019%2C%20Fortnite%20brought%20in%20revenues%20of%20%241.8%20billion%2C%20according,to%20250%20million%20Fortnite%20players.<\/p>\n [15]<\/a> Epic Games v. Apple Inc.<\/em>, No. 4:20-cv-05640-YGR, 2020 U.S. Dist. LEXIS 188668, at *12-14 (N.D. Cal. Oct. 9, 2020).<\/p>\n [16]<\/a> Griffith, supra<\/em> note 13.<\/p>\n [17]<\/a> Cryer, supra <\/em>note 1.<\/p>\n [18]<\/a> Epic Games, Inc. v. Apple Inc.<\/em>, at *10.<\/p>\n
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