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epic games founder tim sweeney likens fight against apple to fight for civil rights

AVATAR Connie Loizos
Connie Loizos
Editor in Chief & General Manager, TechCrunch
November 18, 2020
epic games founder tim sweeney likens fight against apple to fight for civil rights

Apple revealed earlier today that it will be lowering App Store fees for qualifying small businesses. Specifically, developers who earn less than $1 million annually will now be subject to a 15% commission on purchases made within their apps, a reduction from the standard 30% rate.

Tim Sweeney, the founder of Epic Games, expressed that this adjustment—which appears to be a response to ongoing antitrust investigations by Congress, the European Union, the Justice Department, and the Federal Trade Commission—is insufficient. He communicated to the Wall Street Journal this morning that Apple is simply “attempting to appease enough critics to continue its restrictions on competition and the 30% levy on most in-app transactions. However, consumers will continue to encounter elevated prices due to the Apple tax.”

Sweeney—whose company has been engaged in a dispute since implementing a direct-payment system within its widely popular “Fortnite” game to circumvent Apple’s fees—expanded on his views today during a conversation with Dealbook at a two-day event.

When questioned about Epic’s conflict with the technology company—which originated in August with its payment system, resulting in Apple removing Fortnite from the App Store, and subsequently leading to Epic initiating a civil lawsuit against Apple in the U.S. and similar legal action in Australia based on the claim that Apple is operating as a monopoly—Sweeney was direct in his assessment. He even drew a parallel between Epic’s current efforts and the historical fight for civil rights in the United States.

Sweeney stated: “It is the responsibility of everyone to challenge this. It’s not merely a decision for legal counsel to consider, but a genuine obligation to oppose it. Had we complied with all of Apple’s stipulations and accepted their 30% payment processing fees, passing the cost onto our customers, Epic would have been complicit in Apple’s efforts to suppress competition on iOS and inflate prices for consumers. Therefore, agreeing to Apple’s terms would be the incorrect course of action. This is the reason Epic initiated a challenge, and it mirrors civil rights struggles where unjust laws existed, and people rightfully disobeyed them, as compliance would have perpetuated the problem.”

While this comparison may have been met with skepticism by some in attendance, Apple’s announcement today indicates that Epic, which has itself grown into a substantial and profitable platform—valued at $17.3 billion in August following a $1.78 billion investment—is influencing the situation.

The ultimate outcome remains uncertain. During an interview, Andrew Ross Sorkin pointed out that Epic has its own pricing structure within its app store and inquired if Sweeney believed there was any “reasonable price” Apple could charge.

Sweeney explained that Epic itself incurs transaction costs of 2% to 3% in developing nations, an additional 1% for payment support, and “approximately 1%” of revenue to cover bandwidth expenses, suggesting that an 8% Apple fee—as it has become known—might be acceptable in return for the services Apple provides to developers.

Sorkin also noted, in fairness to Apple, that Sweeney frequently refers to “Fortnite” as a platform, one that “currently lacks a competitive marketplace where others can readily develop on top of it to create their own in-app purchases.” Sorkin asked if this might be changing.

Sweeney indicated that the company is “progressing in that direction.” He highlighted Fortnite Creative, a feature within Fortnite that enables users to create and share content freely, stating that “tens of millions of creators are sharing their work with friends and the public, and a business model is beginning to emerge. However, it is still in its initial phases of development.”

 

#Epic Games#Tim Sweeney#Apple#App Store#lawsuit#antitrust

Connie Loizos

Loizos began her coverage of Silicon Valley in the late 1990s, starting her career with the pioneering Red Herring magazine. Before becoming Editor in Chief and General Manager of TechCrunch in September 2023, she served as the publication’s Silicon Valley Editor. She also established StrictlyVC, a well-regarded daily electronic newsletter and lecture program, which was integrated into TechCrunch as a sub-brand following its acquisition by Yahoo in August 2023. For contact or to confirm communications originating from Connie, please reach out via email at connie@strictlyvc.com or connie@techcrunch.com, or connect through encrypted messaging on Signal at ConnieLoizos.53.
Connie Loizos