There is no victory here for consumers or workers, but a small victory for independent game designers.
An Oakland, California District Court Judge, Yvonne Gonzalez Rogers, issued her order on the comprehensive antitrust lawsuit brought by Epic Games against Apple, deciding that the App Store is not a monopoly.
The decision was mostly a victory for Apple, which Epic Games CEO Tim Sweeney admitted in a concession tweet. Judge Gonzalez Rogers decided in Apple’s favor on nine counts, but Epic won on a tenth count. Although Gonzales Rogers didn’t find Apple to be a monopoly according to federal and state law, nor that Apple violated antitrust laws, she found Apple in violation of California state “anti-steering” laws.
Epic Games rebelled against the App Store’s terms of service on Aug. 13, 2020, by offering a cheaper option to purchase in-game currency for their widely popular game “Fortnite.” Under previous App Store transactions, Apple took a 30% cut for allowing game developers to offer their games on the App Store. Alternative purchasing methods were banned from the storefront, steering consumers towards Apple’s digital ecosystem with no other options.
Apple attempted to make amends with developers previously by reducing the rate to 15% on the first million dollars developers make, which was a pitiful concession since Apple played no role in developing many of these games.
The Oakland District Courts decided Apple can no longer block developers from offering payment options and better deals outside of Apple’s in-app purchases. Developers can now direct consumers to third-party websites for purchases instead of having them conducted through the App Store.
This decision could lead to losses in revenue for Apple. This is good, as those revenues will now go to third-parties that aren’t likely being challenged by competitors as monopolists. This decision will not break Apple or drastically reduce its power, but it will shift some of their revenue to others.
There is no victory here for consumers or workers, but a small victory for independent game designers. To see actual changes to Big Tech’s growing powers and concentrations of wealth, Congress must do its job. Antitrust laws have been ambiguous for over 100 years and are outdated in today’s digital landscape. State and federal officials must adapt to the new tech environment and legislate accordingly.
In places such as South Korea and the People’s Republic of China, governments have begun to challenge Big Tech’s monopolist practices. Considering Apple’s 55% market share of mobile game purchases, Congress must act swiftly to prevent a monopoly. As Judge Gonzalez Rogers noted, Apple would have been considered a monopoly at 65% percent. However, asking a growingly inefficient Congress to act seems unlikely.
Congress complained about Big Tech’s power for years while doing nothing under both Republican and Democratic administrations. A series of bills released this summer to challenge Big Tech went nowhere. Big Tech donated millions in the 2020 election cycle, with Joe Biden being the top recipient for Apple, Microsoft and Alphabet. With a looming debt-default crisis, it’s safe to say lawmakers challenging their donors’ power is on the backburner.
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