Fight

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

Monday, August 17, 2020 by Robinhood Snacks |
_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 TAKEAWAY

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.