back to article We were 'blindsided' by Epic's cheek, claims Apple exec on 4th day of antitrust wrangling

An Apple exec has spoken of his shock after Fortnite creator Epic Games installed a hotfix that allowed it to deploy its own payment methods, thus skirting the 30 per cent App Store tax. Testifying on the fourth day of the bench trial, Apple's vice president of App Store, Matt Fischer, said he had been "blindsided" by the …

  1. Zolko Bronze badge
    Holmes

    Safari and Internet Explorer

    What I don't understand in all this is how can Apple force any and all Web rendering through it's own Safari engine ? Doesn't the InternetExplorer -vs- Netscape on Windows serve as precedence ? This is a genuin question, and may-be much more important for Apple.

    1. Snake Silver badge
      FAIL

      Re: Safari and Internet Explorer

      Because the America [that I live in] follows the Golden Rule:

      He who has the gold, makes the rules

      How does Apple get away with restricting competitive web browsers on the iOS platform? Because, quite flatly and without American pro-business apologetics, both regulators and politicians look the other way. Apple has money, lots and lots and lots of it, so they get a Pass Go without any harassment.

      It is disgustingly corporatist, but that's the America that far too many of our inbred electorate thinks works for them. They believe this whilst their wages stagnate for 2+ decades, then complain about how they can never get ahead.

      But keep doing the same thing. Expecting different results, of course.

      1. John Brown (no body) Silver badge

        Re: Safari and Internet Explorer

        "How does Apple get away with restricting competitive web browsers on the iOS platform?"

        Market share. Over recent years, it's been other countries and/or the EU that has been chipping away at big IT companies bending of rules, enforcing of onerous contract terms, snaffling of personal data etc. Those actions outside of the US trickle back to the US, helping the US consumers too, over time. But in Apples case, they are not the biggest platform in much of the rest of the world and so are less of an issue. People can and do choose other non-Apple platforms in places other than the USA and so Apple are not even close to a monopoly there while in the US, they getting there.

        iOS is 60% in US, 51% UK, 30% EU and 10% Asia.

        (The 51% UK market share surprised me. I'd not realised they'd grown so much here! Must be all the free iPads getting handed out in schools and universities.)

    2. Tessier-Ashpool

      Re: Safari and Internet Explorer

      My gaff, my rules.

      Apple do not license iOS to any other party, and also have direct control over the hardware on which it runs.

      They also have to be very sure that any installed software doesn't compromise the security or performance of the platform. Can you imagine what would happen if Porky's Bloaty Browser were to be installed from the Mogadishu App Store? People would be turning up at Apple Stores demanding to know why their email stopped working.

      1. Zolko Bronze badge

        Re: Safari and Internet Explorer

        "what would happen if Porky's Bloaty Browser were to be installed from the Mogadishu App Store?"

        it might render web pages not to 100% to web standards ? Would that be such a novelty ?

        "why their email stopped working"

        hold-on, SMTP and HTML are different standards, aren't they ?

      2. SImon Hobson Silver badge

        Re: Safari and Internet Explorer

        They also have to be very sure that any installed software doesn't compromise the security or performance of the platform.

        You do realise that isn't an argument for not allowing competing browsers, don't you ?

        Apple already vet software, and reject stuff it "doesn't like" - where "doesn't like" seems to come without rules or a need to tell the developer exactly what the alleged problem is. But that's not a reason to disallow a different rendering engine.

        Put a browser in it's own sandbox, as all apps are, and it can more or less do what it likes while rendering pages - all without compromising the security of the system.

        No, the ONLY reason for disallowing alternative rendering engines is their "nothing that competes with something we do" policy - which personally I think is anti-competitive.

        1. Tessier-Ashpool

          Re: Safari and Internet Explorer

          Your arguments are full of guff.

          Adobe Flash was banned from iOS because its wonderful rendering engine killed off the battery. That's the kind of world you can look forward to with arbitrary browser engine installation.

          There *are* Apple competitor apps on the App Store, for example numerous email clients, so the "nothing that competes with something we do" policy is all in your fevered mind.

          WebKit is a core component shared by multiple apps on iOS.

          If Apple allowed arbitrary browsers to have full control of the networking stack and rendering capabilities, you'd end up with browsers like full-fat Chrome on iOS that use decidedly privacy-hostile web standards. Apple can't permit that at the same time as advertising that they protect your privacy.

          1. SImon Hobson Silver badge

            Re: Safari and Internet Explorer

            Adobe Flash was banned from iOS because its wonderful rendering engine killed off the battery

            That's not a security issue. That's an argument for the system having the facility to alert the user to applications that eat battery power - then the user can decide for themselves whether they want the battery power or to access the content they want to.

            Seriously, over the years I've had no end of problems caused by vendors "we don't think you should use that because ..." when for the job I have in hand, doing what they have decided is verboten is exactly what I need. Admittedly that's caused by other f'wits creating UIs in (for example) Java that only runs with an older Java engine - but if your task is to (for example) reconfigure that network switch, and the tool you have to use to do it is "something", then it's far from helpful when you find some clueless f'wit other vendors has determined that you should not be allowed to run that tool, ever, at all. I've seen a number of situations where people have to keep old computers around just to do this sort of admin task.

            If Apple allowed arbitrary browsers to have full control of the networking stack

            Err what ? A browser wouldn't have control of the network stack, it would simply have the ability to make outbound connections using the system's network stack - just like every other application that does network connections. That's just a false claim pulled out of a rear orifice.

            you'd end up with browsers like full-fat Chrome on iOS that use decidedly privacy-hostile web standards

            Well a "full fat" alternative might be a useful thing to have, especially given Safari's reputation for not supporting the latest standards well/at all.

            And Apple could still allow competing rendering engines while still having privacy rules. They set a rule along the lines of "though shalt not track users on our platforms" and kick the application off if it's not followed - like they do with lots of other applications. Having a "full fat" rendering engine and tracking users are two different things, you can have either without the other.

          2. doublelayer Silver badge

            Re: Safari and Internet Explorer

            "Adobe Flash was banned from iOS because its wonderful rendering engine killed off the battery. That's the kind of world you can look forward to with arbitrary browser engine installation."

            Lots of apps kill the battery. That's not against the rules. You can either discard them as bad apps or decide that you like them even though they won't let you run very long. That's not Apple's decision to make, and they repeatedly don't make it when it's a different kind of app. They didn't like Flash because: A) Adobe didn't port applications to OS X until after a long delay and Steve Jobs held a grudge, B) it killed the battery and they didn't like it, and C) they didn't like the structure and wanted to encourage adoption of other alternatives. I agree with their reasons B and C, but that doesn't mean it should be their decision what I'm allowed to run on my hardware.

            "There *are* Apple competitor apps on the App Store, for example numerous email clients, so the "nothing that competes with something we do" policy is all in your fevered mind."

            They have banned apps which compete with other parts of their system repeatedly. See the screen time feature and all the apps which did it and got banned for another example. So they didn't bother when it was a mail client. That doesn't mean they always allow it. They don't.

            "WebKit is a core component shared by multiple apps on iOS."

            Correct. That's just fine. Any app that wants to use it can. No argument here.

            "If Apple allowed arbitrary browsers to have full control of the networking stack"

            They wouldn't. Same access as any other app.

            "and rendering capabilities,"

            Sorry? "Full control of rendering capabilities"? What does that even mean?

            "you'd end up with browsers like full-fat Chrome on iOS that use decidedly privacy-hostile web standards."

            Agreed. I wouldn't be installing it.

            "Apple can't permit that at the same time as advertising that they protect your privacy."

            They could ban any app that tried under their privacy rules, not the rendering engine rules. You don't have to ban specific kinds of apps if you can just say that tracking without permission is forbidden whatever app is used to do it.

        2. martyn.hare

          Try counting the copies...

          Steam, Discord, Teams, Slack, TeamViewer, Edge and Chrome....

          Each of the above run their own private copies of WebKit or Blink on my Windows machine, wasting tons of RAM while simultaneously weakening security. Linux probably fares a bit better thanks to system wide libraries for all distro-shipped packages but when Flatpak takes hold, the situation will be far, far worse... probably worse than on Windows....

          Apple are right to insist on one system-wide HTML/CSS rendering engine.

          1. SImon Hobson Silver badge

            Re: Try counting the copies...

            Apple are right to insist on one system-wide HTML/CSS rendering engine

            And that's a way to stifle development. Remember the days when Microsoft insisted you had to have IE6 as your browser, and gave it away free to kill off Netscape. We had a looooooooong period when f'all happened in terms of web development as once there was little choice, then there was no incentive for MS to work on it. And "the web" had to work with IE6 so there was little out there to cause users to demand "IE6 doesn't work with (something), please fix it MS".

            OK, things are different now, but having one system wide rendering engine, especially when that can't be replaced, leads to a similar situation where wen site developers are forced to code to "what works in Safari on IOS" and things can only develop as whatever pace Apple can be bothered to improve the rendering engine.

            If you allow competing rendering engines, the user can switch browsers when stuff doesn't work - and then it becomes obvious to the user when a browser isn't up to the job. "Site doesn't work in Safari, works in Chrome" - user can moan that Safari is rubbish and Apple have some incentive to fix it.

            And just because "it's rubbish on Windows" doesn't mean it has to be rubbish everywhere. Lots of stuff is crap on Windows - perhaps some century they'll figure out how to handle shared libraries properly and the demand for multiple private copies will reduce.

          2. doublelayer Silver badge

            Re: Try counting the copies...

            "Each of the above run their own private copies of WebKit or Blink on my Windows machine, wasting tons of RAM while simultaneously weakening security."

            That's a problem with people using those engines to do their GUI work. If your OS had one of those as the only option, it wouldn't prevent the machine spinning up separate copies for each app. The main reason why is that you want them separated for security reasons, exactly opposite to the problems you think you have. If a bug is found in your browser's rendering engine, they can't get your Teams engine to cough up data because they're not the same unit. There's one good reason they should stay separate.

            "Linux probably fares a bit better thanks to system wide libraries for all distro-shipped packages but when Flatpak takes hold, the situation will be far, far worse... probably worse than on Windows...."

            The only downside as far as rendering engines are concerned is that there may be multiple copies of the files. That's more disk space than you need to use, but it doesn't do much else.

        3. John Brown (no body) Silver badge

          Re: Safari and Internet Explorer

          "No, the ONLY reason for disallowing alternative rendering engines is their "nothing that competes with something we do" policy - which personally I think is anti-competitive."

          Especially when an app does something Apple doesn't do which they later decide to do, and only then kick out the competing apps based on their non-compete clause.

  2. Pascal Monett Silver badge
    Flame

    30% is extortion, pure and simple

    As a freelance consultant, and a consultant for the past 25 years, I can vouch for the fact that 10% is an acceptable fee when someone is offering you a post somewhere.

    And I'm talking about real work being done by a person through someone else's contacts.

    If someone told me that I could have a contract somewhere but they were taking 30% I would laugh out loud and tell them to get stuffed. Yes, they have the contact, but I'm doing the work. I'm the one with the expenses.

    In Apple's magic land, Apple believes it has the right to demand 30% of someone else's work which it is only just selling and reselling endlessly, having done nothing more than provide the platform to do so.

    Come on. Apple is one of the companies in the world that has the most money in the bank. It's platform is proven and all it's doing is selling bytes. Bytes that someone else sweated to create. 5% is what Apple should be getting. Not a cent more.

    1. John Robson Silver badge

      Re: 30% is extortion, pure and simple

      "Yes, they have the contact, but I'm doing the work. I'm the one with the expenses."

      But Apple are the ones hosting the content, and providing a trusted (for certain values of trust) environment for users to acquire your goods (not services).

      So they are the ones with ongoing expenses, not you.

      1. DevOpsTimothyC Bronze badge

        Re: 30% is extortion, pure and simple

        "But Apple are the ones hosting the content, and providing a trusted (for certain values of trust) environment for users to acquire your goods (not services)."

        No they are not !!!!!

        Apple are providing the store which is used to deploy the app to a device. Once the app is downloaded onto a users phone the app is free to make API calls where ever it likes. It's up to the companies running the apps to then have sufficient capacity elsewhere for the app to function.

        If I create an el-reg app that allows you to read the content, login, vote and post Apple are not magically going to magically host all of the content. Additionally I'd have serious issues if Apple proxied all requests through their servers.

        I'm all for Apple charging fees directly related to their store and for offering a payment service, but those should be reasonable. Bandwidth on the backbones is cheap so the store costs shouldn't be that much. The payment service should be on par with what Visa and Mastercard cost (probably a little extra for the convenience of not needing to process the transactions yourself). The cost to Apple is no where near 30%

        1. John Robson Silver badge

          Re: 30% is extortion, pure and simple

          In terms of the app purchase they are.

          The point was merely that a blanket "I work in a services industry, and wouldn't accept this contract term in a non services industry" doesn't change the fact that the agreement *was* made.

          Do I think 30% is fair and reasonable - no. Not even close to it, but then I don't write and sell stuff on their platform. Presumably those who do see it as a cost of doing business, and it's hardly a secret when you sign up to use the store.

          1. Zolko Bronze badge

            Re: 30% is extortion, pure and simple

            "doesn't change the fact that the agreement *was* made."

            so ... IF we made a contract stating that you're my slave (because you were drunk at that time) would that be a binding "agreement" ? No, thought-not. This means that just because you signed some "agreement" that doesn't mean that this "agreement" is binding. The general rule is that the constitution is stronger than the law, which is stronger than the contract

            1. John Robson Silver badge

              Re: 30% is extortion, pure and simple

              I don’t think Epic were incapacitated at the time.

              You comment on the constitution amuses me - mostly because it seems to be the attitude of USians that amendments are inviolate.

              But that’s rather off topic, even for here.

        2. Potemkine! Silver badge

          Re: 30% is extortion, pure and simple

          The cost to Apple is no where near 30%

          Value != Cost.

          Is value worth 30% of the price is another debate.

    2. Anonymous Coward
      Anonymous Coward

      Re: 30% is extortion, pure and simple

      Try being a photographer selling images through Getty.

      I see 45% of the sale price.

      1. Snake Silver badge

        Re: Getty

        That does not make it right, that only makes it allowed in the marketplace due to lack of competitive options. How many stock photographers want to use Getty Images and pay that kind of commission?

        Same with both Amazon and eBay. When the gateways to markets are mostly controlled by large players, they'll set the rules and you don't have very much choice in the matter - either play with them, or go your own way but suffer from lack of market. There's technically a choice, but it isn't a great one (cough, Standard Oil, cough).

    3. Tomato Krill

      Re: 30% is extortion, pure and simple

      Well then your App Store is going to corner the market I should imagine, look forward to you bringing it to market!

  3. Jim Willsher

    I think the IE vs Netscape as about MS promoting its own browser and making it the default. They never actually prevented people using Netscape, they just made it harder for the people who thing browser == computer == internet == www etc. Whereas Apple flatly block it. You can't install apps without going via App Store, and you can't pay for them (or in-app purchases) without also going through same store.

    1. gnasher729 Silver badge

      Jim, please. Epic can sell whatever they like on their website. Without giving a penny to Apple. Like Netflix does, and they are doing quite well. Or Amazon Prime, which is also doing quite well. If they sell on the AppStore, it’s apple’s terms.

      1. Adam Azarchs

        That would be a reasonable argument if there were an option to sell you app by means other than their app store; that is to say, if the iTunes app store operated in a competitive environment. It does not. There are, arguably, good reasons to restrict app installs to the app store, but if that is the case then the app store needs to be regulated against abuse if this position, just like any other natural monopoly.

  4. Mishak

    Lack of "good will"?

    Hard to say from this, but doesn't this make it look like Epic simply decided to break the terms of their agreement with Apple without even trying to negotiate a change?

    1. Anonymous Coward
      Anonymous Coward

      Re: Lack of "good will"?

      Yeah, Epic's kind of a bad actor here too, and two wrong positions that could set precedent for future court cases aren't going to fix things.

      The remedies that Epic have pushed for seem pretty narrowly focused on their OWN interests, not reform that benefits the broader industry. After watching their predatory behavior during the push of the much "loved" Epic Games Store, I'm not rooting for either side on this one.

    2. doublelayer Silver badge

      Re: Lack of "good will"?

      Yes, they did exactly that. They didn't want to follow Apple's rules so they just broke them. I don't agree with most of Apple's rules, and maybe legal action is the only way to have them changed, but Epic isn't a sympathetic entity in my view.

      1. jemmyww

        Re: Lack of "good will"?

        From what I understand, Epic had to have a contract and then break it and get it cancelled by Apple in order to bring legal action, because they had to have standing. i.e. the only way to sue for the contract being unfair is to sign the contract and break the terms. Epic's actions were not just "oh we don't like the rules" they steps taken were specific to being able to take legal action.

        I'm not particularly interested in Epic because I don't play games. But it seems to me that only a large enough company was going to be able to bring this challenge, and no large company completely smells of roses.

  5. Claptrap314 Silver badge

    It is a subsidy

    Of the smaller players. The cost to Apple for a title that sells for $.99 is the same as for I Am Rich. I'm not claiming that Apple is losing money on the $.99 apps (although they might be), I'm pointing out that the economics for an Indy shop make a lot more sense than they do for Epic.

    So, one large and successful company (Epic) thinks it can dismantle the business model of one of the FAANGs. Get your popcorn, but don't get too attached to either side. There are very serious technical justifications for the walled garden. The temptations to abuse it, however, are beyond the ken of mortals to resist.

    1. DS999 Silver badge

      Re: It is a subsidy

      Given that Epic charges $0 for their games, if Apple didn't get a cut anywhere else they would be getting more from the little guy selling 10 copies of a 99 cent app than they do from a multi billion dollar gaming giant.

      Would Walmart (or ANY retailer) provide self space for a product that retails for $0, and makes all its money after purchase? Of course not, the only way such a product would reach their shelves would be if they made some sort of a deal where they got a cut of the after sale revenue.

      1. Snake Silver badge

        Re: It is a subsidy

        Epic are not arguing that Apple should not be able to charge. Epic are arguing that Apple has a rather substantial charge and then absolutely forbids, both buyer *and* seller, from seeking or creating alternatives.

        That is 100% anticompetitive.

        1. John Brown (no body) Silver badge

          Re: It is a subsidy

          I was thinking along similar lines. Across most of industry, and even life in general, the more you buy of something, the lower the unit cost. So the big players on iStore bringing in millions or even billions, are still paying out 30% to Apple. I can sort of see Epics point. By being available on iOS, they are bringing a lot to Apple in intangibles, as are other big players. If those big players were not available on iOS, would iOS have as big a market share? iOS users don't care about Billy Joes 99c app that does the same thing as 100 other 99c apps. But iOS users DO care they have access to Fortnight or Netflix on iOS.

          Epic are, obviously, doing this out of their own interests, not as a test case for the little guys, and how they went about it is a bit suspect too, but I can see that their points are not bad per se.

          1. DS999 Silver badge

            Re: It is a subsidy

            Yes but on the flipside, Apple built the entire iOS infrastructure and App Store. Shouldn't they get to be compensated for that by the companies who benefit from it? It is a symbiotic relationship, neither can thrive without the other.

            1. doublelayer Silver badge

              Re: It is a subsidy

              Apple gets benefits from app developers, namely that people stay on their platform because apps are available. We've seen how it works without developers on board. Windows Phone was a platform that worked, and many people here have posted praise for it as a good one (I never used it myself). It's dead now and one of the major reasons is that many apps were not available so people didn't buy the devices. Should Apple be rewarding developers for providing this assistance to their platform and keeping them competitive?

              Developers and Apple are supporting each other with users providing a flood of money for Apple already. Meanwhile, most of Apple's work helps the individual users who pay for Apple's hardware. Why is it the developers which have to give Apple gratitude in the form of a bunch of cash when Apple doesn't have to do the same for the benefits they get?

            2. Alumoi Silver badge

              Re: It is a subsidy

              Apple built the entire iOS infrastructure and App Store and decided to force everybody to install software only form their store. Google may be evil but it's easy to install software on your phone from outside their store.

              Plus, rooting, reclaiming and securing your phone it's easier in Androind.

              I'll keep buying Android for myself and my family, thank you very much.

          2. ADC

            Re: It is a subsidy

            > By being available on iOS, they are bringing a lot to Apple in intangibles, as are other big players. If those big players were not available on iOS, would iOS have as big a market share?

            On the other hand, Apple have already shown that they are more than willing to remove Fortnight from the app store. It's Epic who are desperate to keep it on the store and complained when it was blocked for a time.

  6. Richard Cranium

    Anyone old enough to remember VisiCalc?

    Back in the 1980s I was involved in the emergence or personal computers into a global bank. We were using the Sirius Victor. Financial modelling was a major need, some of that was being done on IP Sharp dial-up (acoustic coupler) timeshare system.

    On the Victor we had an alternative, I don't recall the name but it was pre-spreadsheet and not for the faint hearted.

    The minute anyone in finance saw VisiCalc they wanted it, and to get it they had to have an Apple computer. At the time it was regarded as "the killer app", the decision was not "what's the best hardware/operating system?" but "what do I need to run VisiCalc?". The Apple kit was expensive (inflation adjusted price probably over £4000) but we soon found a functional alternative to run on MsDos (might have been MS MultiPlan, again I don't recall).

    I'm not a gamer but seems that Fortnite may fall into the "killer app" category and the answers to "what do I need to run Fortnite?" seem to include PC, £200 Android, Nintendo Switch.

    1. Claptrap314 Silver badge

      The app is all that matters

      Everything else--hardware & OS is overhead.

      Of course, in our over-connected world, you have a collection of apps to manage. That...complicates things.

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