Fight

Fortnite leads an epic movement against Apple and Google's 30% App Tax

Snacks / Sunday, August 16, 2020
_Are you not entertained by Fortnite's epic battle?_
_Are you not entertained by Fortnite's epic battle?_

So meta... Fortnite-maker Epic Games started a Battle Royale on Thursday by adding its own in-app payment system to bypass the "App Tax." The privately-owned video game maker, worth over $17B after a fresh fundraise this month, knowingly defied the App Store Empire:

  • Apple and Google take a 30% cut of in-app purchases, downloads, and subscriptions from non-Apple/Google apps.
  • Fortnite hates that. So it added its own in-app payment option, offering a 20% discount to players who used that instead of Apple/Google's. In response...
  • Apple and Google expelled Fortnite from their app stores for violating rules by bypassing the 30% fee. Then, Epic promptly filed War and Peace-sized lawsuits against both tech giants. It also dropped a Pixar-worthy video to troll Apple: "Nineteen-Eighty Fortnite."

Don't hate the player... hate the platform-player. Epic's lawsuits try to establish the App and Play stores as competition-crushing monopolies. This isn't a revolutionary call-out: for years, Apple has been getting heat for being a player in a marketplace it also controls. The Fruit has been accused of playing favorites with its own apps.

  • Epic's bold PR campaign is drawing more scrutiny than ever on Apple and Google's app store dominance. Facebook, Spotify, and Tinder-owner Match have come out in support of Epic against the “App Store tax.”
  • If Epic wins, Apple and Google might have to reduce or remove their fees. Apple made ~$15B in sales from the App Store last year (around 5% of its total sales).

The App Store isn’t just a marketplace — it’s more like a public utility... We use apps to communicate, travel, shop, and eat. Google's Android controls 85% of the global operating system market, while Apple's iOS has 15% — every mobile app goes through their stores. These stores have created an explosion of opportunity for developers, but with caveats: Developers have to swallow Apple/Google's 30% sales tax on the mobile economy. Even Apple TV takes a 30% cut of $30 digital rentals for Disney's Mulan. All that could change with Epic's movement.

Get Your News

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.