Tracking the Apple App Store Saga (Updated)

Ever since Spotify filed an antitrust complaint against Apple last year, it appears like the floodgates have opened. In the past few months alone, the escalating fight over mobile app store policies has found new traction, what with companies like Microsoft, Facebook, ProtonMail, Telegram, Basecamp, Rakuten Kobo, Match Group, and WordPress chiming in to decry Apple's 30% fee for all digital transactions on the iOS (and iPadOS) platform, infamously known as "the Apple tax."

Then there's the elephant in the room: Epic Games, which had its Fortnite game banned from Apple and Google's app stores for introducing a direct payment option in direct contravention to their policies. Here are all the latest developments in the saga -

• Epic Games reveals Apple notified the company that it intends to terminate its developer accounts and revoke its access to iOS and Mac developer tools by removing it from the Apple Developer Program effective August 28 if it fails to comply with App Store guidelines
• Apple says it won't make an exception for Epic and that "the problem Epic has created for itself is one that can easily be remedied if they submit an update of their app that reverts it to comply with the guidelines they agreed to and which apply to all developers."
• Apple accuses Epic Games of anticompetitive behaviour in a new legal filing, producing three emails from the company's CEO Tim Sweeney to show that Epic asked for a special deal.
• "In the wake of its own voluntary actions, Epic now seeks emergency relief. But the 'emergency' is entirely of Epic's own making. Developers who work to deceive Apple, as Epic has done here, are terminated," Apple says in the legal brief, adding "Epic's actions are putting the entire App Store model at risk."
• "If developers can circumvent [in-app purchases] to avoid paying Apple the commissions it is contractually due, Apple will be unable to continue its on-going investment in the App Store," the iPhone maker warns. "If developers can avoid the digital checkout, it is the same as if a customer leaves an Apple retail store without paying for shoplifted product: Apple does not get paid."

Apple's response to Epic Games' lawsuit

• Epic CEO Tim Sweeney calls Apple's statement that Epic tried to procure a special deal for themselves, and only themselves, is misleading, as he says he initially requested in an email that the App Store concessions Epic sought be made available to all iOS developers.
• "Apple's statement is misleading. You can read my email in Apple's filing, which is publicly available. I specifically said in Epic's request to the Apple execs, "We hope that Apple will also make these options equally available to all iOS developers...," Sweeney tweeted.
• Microsoft steps into the brewing legal battle between Apple and Epic Games over the former's policies with regard to its ubiquitous App Store. In a new legal response filed by Epic Games, the game maker says Apple's plans to remove developer support is "an unlawful effort to maintain its monopoly and chill any action by others who might dare oppose Apple."
• "Denying Epic access to Apple's SDK and other development tools will prevent Epic from supporting Unreal Engine on iOS and macOS," says Microsoft, "and will place Unreal Engine and those game creators that have built, are building, and may build games on it at a substantial disadvantage."
• U.S. District Court denies Epic Games' motion to temporarily restore Fortnite game to the iOS App Store, but also orders Apple to not block the gaming giant's ability to provide and distribute Unreal Engine on iOS.
• Epic confirms Fortnite gamers on iOS and macOS will not be able to play the game's next season, Chapter 2: Season 4, and will lose cross-play with non-Apple platforms.
• "Apple is asking that Epic revert Fortnite to exclusively use Apple payments. Their proposal is an invitation for Epic to collude with Apple to maintain their monopoly over in-app payments on iOS, suppressing free market competition and inflating prices. As a matter of principle, we won't participate in this scheme," Epic says. "You, as a mobile device owner, have the right to install apps from sources of your choosing. Software makers have the right to freely express their ideas and to compete in a fair marketplace. Apple's policies take these freedoms away."
• Apple rejects Facebook's attempt to inform users the iPhone maker would take a 30% cut of sales for a new online events feature, forcing the social media company to remove the message in order to make the update available on the App Store. (Facebook had earlier submitted a version of the Facebook app which said "Apple takes 30% of this purpose," but Apple reportedly "cited an App Store rule that bars developers from showing 'irrelevant' information to users.")
• Facebook CEO Mark Zuckerberg calls Apple's App Store monopolistic and harmful to customers in a company-wide meeting, adding Apple "blocks innovation, blocks competition," and uses the ‌App Store‌ to "charge monopoly rents." (It however appears that buying ads in Facebook via the app doesn't incur a 30% cut to Apple. So an ad is not a digital good?)
• Apple terminates Epic's App Store developer account following Fortnite dispute, but leaves untouched the alternative account it uses to manage Unreal Engine. Epic CEO Tim Sweeney takes to Twitter to dispute Apple's ban. "They chose to terminate Epic's account; they didn't *have* to."
• Japan's antitrust regulator Fair Trade Commission announces its plans to scrutinise Apple's App Store practices in the wake of Epic's high-stakes lawsuit against the company, as game developers raise alarm over Apple's inconsistent enforcement of its own App Store guidelines and unpredictable content decisions.
• Epic claims "daily active users on iOS have declined by over 60% since Fortnite's removal from the App Store," in new filing urging Apple to allow Fortnite back on iOS and restore access to its developer account.
• Apple sues Epic Games for breach of contract and seeks damages in counter filing, alleging Epic's lawsuit is an "orchestrated legal and public relations strategy to avoid the commissions to which Apple is contractually entitled," and if "left unchecked, Epic's conduct threatens the very existence of the iOS ecosystem and its tremendous value to consumers." The iPhone maker calls Fortnite a "Trojan horse" designed to "bypass Apple's app review process and ability to collect commissions by directing app users to pay Epic instead, cutting Apple out entirely."
• Apple says it will no longer allow users to sign into Epic Games accounts using "Sign in with Apple" login system starting September 11, 2020, amid escalating spat between the two companies. (This has been indefinitely extended, according to Epic. Given the ability to sign in with Apple ID has been marketed as a privacy-enhancing feature, the fact that Apple could strip away that feature and lock users out runs counter to the whole idea of using single sign-ons.)
• Australia's antitrust watchdog, the Australian Competition and Consumer Commission, launches sweeping inquiry into Apple and Google's app stores with a focus on "collection and use of consumer data by app marketplaces, and whether consumers are sufficiently informed about and have control over the extent of data that is collected." It aims to examine how the companies bundle their own products with their online marketplaces, its effect on businesses (aka competition), the fees charged to businesses on the app stores, the transparency surrounding how app rankings, and whether the processes in place to protect people from harmful apps are actually working.
• Apple accuses Epic of "starting a fire and pouring gasoline on it" in new filing, arguing that Fortnite can return to iOS at any time by simply adhering to the contractual terms. "Epic could have avoided any further harm involving both Fortnite and Unreal Engine — with a simple keystroke," adding the company is "holding its own customers hostage to gain leverage in a business dispute." It says it wants to retain the right to close all of Epic's iOS developer accounts, counting those used to develop and maintain Unreal Engine on the platform.
• It's worth pointing out that Epic filed a lawsuit against Apple claiming it places illegal restrictions on the distribution of iOS apps after its app was pulled from the App Store.
• Apple's App Store policy mandates that apps that offer paid services or content must include in-app purchases, which are also required to be processed through Apple's payment system — which it uses it to extract its 30% cut — and that all the paid features a service makes available on other platforms (web, Android) should be made available on its iOS app.
• It's one thing for Apple to charge a 30% cut for Spotify or Netflix subscription made via iOS, but as the WordPress case highlights, it's an entirely different thing to arm-twist a third-party developer and hold app updates hostage until paid features are implemented so that it could levy its toll. (Update: Apple has issued a rare apology on Saturday and said that WordPress will not be forced to add in-app purchases.)
• As Apple increasingly benefits from its pivot to the services business, of which the 30 percent "Apple tax" forms a huge chunk, the latest development is a clear sign that the company is exploiting its tight integration of software and hardware to control app installation and payment processing, and in doing so, guard its cash cow and drive profits to itself.
• "The entire point is that Apple is leveraging its exclusive access to a huge chunk of the world," Tinder co-founder Jonathan Badeen tweeted. "How dare anyone else do the same."
• All of this ultimately boils down to a simple question: Should Apple get to control what apps consumers download on their iPhone? It's a proprietary platform, so legally and technically it can. But the question is, should it.
• If anything, the tussle is another reason why I have always been a firm believer of open-source and the web. Native apps are good, sure, but when a marketplace that's meant to help even the smallest developer reach every iPhone becomes a liability, it's time web apps are given a serious thought again.

(The post has been updated on Sept. 16 to reflect the latest developments.)