Epic Games CEO Tim Sweeney Criticizes Apple's iPhone Settings

Epic Games CEO Criticizes Apple's Advertising Practices

Tim Sweeney, the CEO of Epic Games, currently involved in an ongoing appeal regarding his significant antitrust lawsuit against Apple, has voiced concerns about the iPhone manufacturer’s advertising strategies. He alleges Apple is granting itself an advertising advantage unavailable to its competitors.

Advertising Placement in iPhone Settings

Specifically, Sweeney points to Apple’s practice of displaying advertisements for its own services directly within the iPhone’s Settings screen, positioned prominently below the user’s Apple ID. This practice was observed by some iOS 15 users.

The advertisements presented are tailored to each user, seemingly based on their existing subscriptions. For instance, individuals without an Apple Music subscription might encounter an offer for a complimentary six-month trial.

Potential Anticompetitive Behavior

Sweeney contends that this type of first-party advertising presents an anticompetitive risk for Apple. He highlights that the advertised services often directly rival third-party applications available on the App Store.

However, these third-party applications are unable to secure advertising space within the iPhone’s Settings; their only option is to compete for ad placements within the App Store itself.

Sweeney's Public Statement

Sweeney stated: “From the creators who removed Fortnite: advertisements within the settings screen for their music service, appearing before the actual settings, and inaccessible to other advertisers like Spotify or Sound Cloud.”

Origin of the Observation

Sweeney shared his concerns while re-posting commentary from Eric Seufert, an analyst at Mobile Dev Memo. Seufert initially shared an image credited to Francesco Zucchetta, the co-founder of Glassfy.

Zucchetta reported discovering the advertisement on an iPhone 8 running iOS 15. Further reports indicate that other users have also observed these ads on more recent iPhone models, and some have even received them as push notifications.

Nuances of the Issue

The situation is complex, as Apple’s promotion doesn’t always directly disadvantage competitors. For example, a prompt to add AppleCare+ coverage, as seen on an iPhone 13 Pro Max running iOS 15.1, can be viewed as informative.

Unlike Apple Music’s competition with Spotify, there aren’t direct third-party equivalents to AppleCare. Instead, warranty providers like Asurion collaborate with mobile carriers such as AT&T and Verizon to offer iPhone insurance plans, rather than selling directly to consumers through the App Store.

Potential Benefit to Users

Some may even consider a reminder to add warranty coverage a helpful feature, rather than an unwelcome interruption.

History of Apple's Advertising in Settings

It’s important to note that these first-party promotions within the Settings screen are not a new development.

Apple has consistently utilized the iPhone’s Settings to market its services to customers. Last year, promotions for Apple Arcade, AppleCare, and Apple TV+ were also observed within the Settings app.

Furthermore, Apple has employed other promotional methods, including push notifications and cross-promotion within its own applications, such as offering Apple Music subscriptions through iTunes.

Regulatory Scrutiny

Currently, regulatory bodies are increasing their scrutiny of platforms and their potential misuse of market dominance. Google is appealing a substantial penalty imposed by the EU regarding its requirement for device manufacturers to preinstall Google apps.

Samsung has also announced it will cease running advertisements in its first-party apps on Galaxy devices, including ads for both external companies and its own products.

Epic Games' Future Actions

Epic Games has not provided any additional commentary regarding Sweeney’s statement, nor has it indicated whether this information will be incorporated into its upcoming appeal. A request for comment was sent to Apple, but a response has not yet been received.