Apple's Filings in Epic Games Case Argue It Has Reduced Industry Commissions, While Third-Party App Stores Would Compromise Privacy and Security

Prior to its upcoming bench trial with Epic Games, Apple filed hundreds of pages of documents covering findings of fact, which include some interesting and previously unknown tidbits about ‌Epic Games‌.

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‌Epic Games‌ planned its rebellion against Apple for at least two years ahead of when it opted to brazenly violate Apple's App Store rules, with Apple's ‌App Store‌ fees at the heart of the dispute. Epic is of the opinion that it should not have to pay Apple a 30 percent cut to distribute apps on iOS devices, but court filings show that Epic itself used to charge much higher fees.

Back in the 1990s, when Epic initially agreed to distribute games from other developers, it collected a 60 percent commission. According to Apple's documents, Epic CEO Tim Sweeney said at the time that the 60 percent fee Epic collected was a "fairly favorable royalty," as most distributors at that time charged 70 percent commissions.

Prior to when digital distribution platforms like the ‌App Store‌ existed, Sweeney commented that it was "so daunting" trying to sell games through brick and mortar locations.

"See, you put a huge amount of effort into developing a program. If you have to release it, then that's basically doubling the effort, because of all the polish and documentation that's needed. And unless you're going to make serious money from that, then it's not worth it."

According to Apple, the ‌App Store‌ "upended the status quo" and introduced a "frictionless marketing, distribution, and transaction system" for both developers and users. Apple claimed that its model revolutionized payment for developers, who kept a 70 percent cut from the ‌App Store‌ instead of having to pay 70 percent to a distributor for typical retail sales.

In its filing, Apple pointed to Epic's own high fees that it charged are evidence that deals negotiated prior to the ‌App Store‌ were much inferior to the 30 percent cut that it takes, while also informing the court about the reduced 15 percent fee that small developers are now eligible for.

Though Epic CEO Tim Sweeney has spent a lot of time maligning Apple on Twitter, he is a fan of Apple's privacy practices. According to Apple's court filing, Sweeney said that he "found Apple's approach to privacy superior to Google's approach to customer privacy and customer data," and that Apple does a "great job."

Apple claims that Epic's lawsuit could have a direct impact on the security and privacy of the iPhone as customer privacy is one of the reasons that Apple wants to oversee apps that are allowed on iOS devices. Apple is planning to soon implement App Tracking Transparency rules that will limit the data that developers can collect from users. If alternate app stores were made possible, there would be no rules on the information that could be sourced from ‌iPhone‌ users.

Apple believes sideloading iOS apps would create "unacceptable vulnerabilities" that would risk exposing customers to viruses and malware. Epic at one point apparently considered disregarding Apple's Enterprise certificate policies to get apps on devices without the ‌App Store‌, but Epic's own engineers had previously expressed concerns about sideloading apps on Android devices.

There was a series of leaks in the binaries for the Fortnite installer after Epic launched it on Android devices via sideloading in August 2018, which led to malware and fraud. And as a programmer noted on another occasion, '[o]verall a bit worried about the security aspect of this all, a lot of malware already doing the rounds impersonating the Fortnite app.'

The court filings feature some clear indications why ‌Epic Games‌ wants lowered ‌App Store‌ fees - it's not making money from the ‌Epic Games‌ Store. Epic lost around $181 million in 2019, and was projected to lose $273 million in 2020. Epic committed $444 million in minimum guarantees to developers, but made only $401 million. Epic said that it will lose around $139 million in 2021, but Sweeney has said that it's an investment into growing the business.


Apple claims that Epic is funding the ‌Epic Games‌ Store through other parts of its business, such as Fortnite, which are more profitable.

There are plenty more details about how ‌Epic Games‌ planned its attack on Apple and Google, which can be found in the court filing embedded below. We're also sure to hear additional information when the two companies meet in court on May 3.

Apple CEO Tim Cook and several other Apple executives will testify, as will ‌Epic Games‌ CEO Tim Sweeney and executives from Facebook and Microsoft. Former Apple executive Scott Forstall will also be called as a witness by Epic.

Top Rated Comments

Solomani Avatar
19 months ago
Back in the 1990s, when Epic initially agreed to distribute games from other developers, it collected a 60 percent commission....... Epic CEO Tim Sweeney said at the time that the 60 percent fee Epic collected was a "fairly favorable royalty," as most distributors at that time charged 70 percent commissions.

LOL. Epic's hypocrisy and greed knows no bounds.
Score: 33 Votes (Like | Disagree)
natnorth Avatar
19 months ago

Based on this information provided by Apple:
“Apple believes sideloading iOS apps would create "unacceptable vulnerabilities" that would risk exposing customers to viruses and malware.”

Which also applies to macOS devices!
Same SoC, Kernel, frameworks, libraries, just a different UI.

Apple should immediately stop selling macOS devices, or completely block their access to iCloud, and immediately lock-in macOS by disallowing side loading, just like iOS - to make sure their customer data and privacy stays safe.

Specially because macOS has access to the same data pool that is provided and shared over iCloud by iOS/iPadOS to the “unacceptable vulnerable” macOS.

But no, they prefer to spread fud and security through obscurity.
I see your side but I think it's also ignoring the other side of the argument. Computers have been around forever and to walk-backwards with them when it comes to them being general-purpose to specific-purpose handle all use cases and software devices would be very difficult. There is an expected way to use them.

When the smart phone came out it was a phone that could do lots of stuff people were using computers for... and apps and improved processing has made them power devices in the palm of your hand.This was a new paradigm and Apple used that opportunity to define it as more "safe" or "locked down" depending on the camp you pitch your tent in.

I know a lot of people who own ONLY a phone, no computer, and use is exclusively as their only digital device. So while computers and malware/viruses/anti-virus software have all become the norm because of the decades of history.. I'm glad that my smartphone hasn't, and it's because of the more locked-down approach.
Score: 18 Votes (Like | Disagree)
GizmoDVD Avatar
19 months ago
Epic - we are all embarrassed by you. You're golden goose is losing steam, and your storefront is trash
Score: 17 Votes (Like | Disagree)
WiseAJ Avatar
19 months ago
Can't wait for the inevitable Epic Bankruptcy
Score: 15 Votes (Like | Disagree)
robco74 Avatar
19 months ago

Based on this information provided by Apple:
“Apple believes sideloading iOS apps would create "unacceptable vulnerabilities" that would risk exposing customers to viruses and malware.”

Which also applies to macOS devices!
Same SoC, Kernel, frameworks, libraries, just a different UI.

Apple should immediately stop selling macOS devices, or completely block their access to iCloud, and immediately lock-in macOS by disallowing side loading, just like iOS - to make sure their customer data and privacy stays safe.

Specially because macOS has access to the same data pool that is provided and shared over iCloud by iOS/iPadOS to the “unacceptable vulnerable” macOS.

But no, they prefer to spread fud and security through obscurity.
Most users don't carry their Macs around with them everywhere they go, constantly connected to the network, with a built-in GPS chip.

You could potentially learn quite a bit about someone based on what is on their Mac and their usage. But I'd wager that would pale in comparison to the amount of data you could collect from a smartphone. Smartphones are also much more likely to be misplaced or stolen. There are quite a few security risks that are either don't exist, or are greatly diminished compared to a desktop or even a laptop.
Score: 13 Votes (Like | Disagree)
DocMultimedia Avatar
19 months ago
There is still the very simple fact that if you create your game to run on the web then you can entirely skip Apple. You just need to be a good programmer. As a programmer for the past thirty years, I think Apple has a plan that is really good for both sides. I've done the 70% thing, and I've done the full web-based approach. The Apple one is a great balance with many benefits to developers. IMO of course.
Score: 11 Votes (Like | Disagree)

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