Do you play Fortnite? If not, the odds are a friend, a relative, a coworker or even 'all of the above' probably do.
Since its release in 2017, the survival video game created by software developer Epic Games, Inc. has garnered more than 350 million registered accounts, a staggering number that roughly equates to one account for every man, woman, and child in the United States. And with approximately 116 million of those accounts on mobile devices, companies like Apple and Google who provide the installation platform for the game have reaped huge benefits, taking 15%-30% commissions on Fortnite in-game transactions made through their respective app stores.
While it would have been hard to predict the popularity of Fortnite when it was first released, Epic has been less than pleased by how much money the game has made these distributors since then simply for the privilege of being sold through their apps and in August 2020 it filed lawsuits against both Apple and Google. In its California district court case against Apple, Epic is challenging the tech behemoth's in-app purchasing restrictions and has alleged monopolistic practices in violation of the federal Sherman Antitrust Act.
In its California district court case against Apple, Epic is challenging the tech behemoth's in-app purchasing restrictions and has alleged monopolistic practices in violation of the federal Sherman Antitrust Act.
On September 10, 2021, U.S. District Judge Yvonne Gonzalez Rogers, who is presiding over the California case, rendered a 185-page decision on competing motions in which both parties came away with wins while not resolving the case in its entirety. Since then, Epic already has filed a notice of appeal challenging the decision. The case is being closely watched by users, app developers, and others in the gaming and mobile device industries because the outcome of the appeal and of the case itself almost certainly will have a significant impact on how consumers will pay for their mobile games in the future.
Judge Gonzalez Rogers ruled that Apple no longer can prevent companies like Epic from directing users to payment methods outside Apple's digital system. However, she also ruled that Epic still cannot conduct these purchases in their own app and that developers will have to route users to an outside website to complete the transactions.
Then, on September 22, Apple denied Epic’s request to reinstate its developer account, which would have allowed it to bring Fortnite back to the App Store. Instead, Apple will not allow Fortnite back on the App Store until the judge’s ruling is final, until the exhaustion of all court appeals, which could be as long as five years.
With billions of dollars in potential revenue at stake, there are numerous issues left to be decided (indeed, Apple is likely to file its own appeal), but one thing is for certain: Fortnite and its creators are looking to effect a lasting impact on how the tech industry handles digital transactions and, ultimately, who profits from those transactions.
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