Epic vs Apple

Story of the week is Epic fighting Apple and Google for forcing users to use the in-app payment system and thusly getting a 30% middleman cut.

Here’s what the Epic’s CEO is saying:

we’re fighting for the freedom of people who bought smartphones to install apps from sources of their choosing, the freedom for creators of apps to distribute them as they choose, and the freedom of both groups to do business directly

The story is larger than that, of course, on one hand it is costly to ensure a curated malware-free experience for downloading apps (Apple’s claim for charging 30%) and on the other it seems unfair that Apple should charge for services that do not require Apple’s resources and forcing developers to use Apple’s payment as a gateway in the name of security.

I don’t think the main problem is having to pay a distribution fee or the number per se i.e. 30% but the fact that the number is not worth it in the value creation breakdown, as Apple mostly acts as a dumb greedy middle man.

That number should reflect the value Apple creates in the ecosystem of the products it distributes and there’s hardly a way to calculate a ROI close to that value.

The problem is that Apple Store grew and now has scaling problems - the way it was envisioned by SJ 10 years ago simply doesn’t fit the way business is done today. Things have evolved a lot in a decade. Btw, this also applies to App Store’s byproducts, the Analytics, the ASO and ASA, which are badly implemented, far from being at par to how business is done today.

This head-in-the-sand, our-way-or-the-highway attitude of Apple from its monopoly position will only further alienate developers and business people altogether and at some point a change needs to be made.

That point seems to be now.

Apple is increasingly altering business models (see Guardian’s example above), shaking down entire industries, and in some cases using its power against direct competitors (hello Spotify).

In Europe we have Spotify pushing, a month ago it was Hey, Airbnb, Tinder and ClassPass, 2 weeks ago Apple (and Google, in the same position) had a chat with the US Congress about anticompetitive conduct, and now we have Epic, also joined by Facebook btw, which chimed in and complains about it. Now we have a party.

Obviously Epic is more financially equipped for a fight (they actually sued in a court of law) and better prepared too.

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