Apple’s Fortnite ban, explained

Apple is facing increasing pressure to change its App Store practices. | Greg Baker/AFP via Getty Images

Epic Games is suing the iPhone maker for antitrust violations.

Apple’s App Store war against developers and its ongoing antitrust issues appear to be coming to a head.
Epic Games, the creator of the hugely popular game Fortnite, is suing the company, claiming that its App Store practices violate the Sherman Act. Epic says that Apple’s requirement that all mobile apps come through its App Store (and the 30 percent commission Apple charges for app sales and in-app purchases) is a monopoly, and that Epic — as well as its fellow developers and their customers — should have alternatives.
Apple, a $2 trillion company, has not only refused to consider changing its lucrative business model, but it’s also kicked Fortnite out of the App Store. And now Apple is threatening to cut off Epic’s access to its developer tools program, which could affect any apps that use the company’s Unreal Engine — and therefore, any consumers who use those apps.
As Recode’s Peter Kafka explained last week , apps on Apple mobile devices have to go through the company’s App Store, which charges a 30 percent commission for app purchases as well as any purchases made within the app itself. As a “freemium” game, Fortnite makes all of its money through in-app purchases of its virtual currency, and Apple gets a cut of that. When Epic attempted to get around this by offering customers the option of purchasing Fortnite currency directly from Epic at a discount, Apple kicked Fortnite out of the store for violating its terms of service. Epic responded with a lawsuit, joining an ever-louder chorus of developers and legislators who have accused the App Store of monopolistic practices, given its total control over the apps offered on its devices.
The outcome of all this could significantly change the app ecosystem Apple helped create, possibly to developers’ and consumers’ benefits. Right now, however, everyone is losing.
The App Store can be mutually beneficial to Apple and app developers
When the App Store launched on iPhones in 2008, it was pitched as a win-win. Developers would have easy access to Apple users as well as tools to create and sell the apps they made — all of which was especially good for small developers that didn’t have the resources to do so otherwise. In return, Apple would get a rapidly expanding roster of apps to offer its consumers and a steady stream of cash from commissions it took off the purchase price of paid apps as well as in-app purchases. This concept has largely been a success. The App Store now offers millions of apps, and Apple says that in 2019 alone it generated more than $500 billion , most of which was not subject to the 30 percent commission Apple takes off in-app purchases and paid apps.
Because the App Store is the only way consumers can...