Facing new Fortnite lawsuit, Apple slices its app commission rate for most developers
Fortnite video game maker Epic Games filed a new lawsuit against Apple on Tuesday in Australia
Apple announced on Wednesday that it is slicing its App Store commission fee from 30% to 15% for small developers as the tech giant faces a new lawsuit from Fortnite video game maker Epic Games.
The reduced commission fee comes as part of Apple's new "App Store Small Business Program," which the company describes as "a new commission structure to support small and individual developers and spur innovation for the next chapter of apps."
"With the new App Store commission structure, small and individual developers who earn up to $1 million in revenue for the calendar year are eligible for a reduced 15[%] commission rate — half of the App Store’s standard commission. The savings mean small businesses and developers will have even more funds to invest in their businesses," Apple wrote in a Wednesday blog post.
iTunes Store and App Store on an iPhone 4 running iOS 7. (iStock)
Apple and Epic Games have been in an ongoing legal battle since August when Epic filed a lawsuit against the $2 trillion company over its "anti-competitive restrictions on mobile device marketplaces."
Epic filed the complaint after Apple said the game maker had violated its rules by attempting to find a way around iys 30% App Store commission fees by offering a direct payment system to users.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 222.01 | -0.90 | -0.40% |
Apple revoked Epic's Fortnite game from the App Store in August and later that month it removed its access to app development tools offered to creators who offer their products on the App Store. Since then, Epic has made efforts to draw attention to the issue through its #FreeFornite campaign on social media.
APPLE MUST FACE SHAREHOLDER LAWSUIT OVER CEO TIM COOK'S CHINA SALES COMMENTS
Epic filed a new lawsuit against the tech giant on Tuesday in Australia for similar reasons.
"Today we took legal action in the Federal Court of Australia to end Apple’s App Store monopoly and make digital platforms fairer," the company said in a Wednesday tweet. "We’re extending the fight to Australia where the impact of Apple’s anti-competitive policies is among the highest in the world."
Epic CEO Tim Sweeney said in a Wednesday statement that its ongoing legal battle with Apple "goes to the heart of whether consumers and creators can do business together directly on mobile platforms or are forced to use monopoly channels against wishes and interests."
"Apple were pioneers of the personal computer, and their original products were open platforms. Anyone could write code, anyone could release software and users could install software from sources of their choosing. Today’s digital platforms must be similarly open to fair competition," he wrote.
Apple criticized Epic's complaints in September as a "marketing campaign designed to reinvigorate interest in Fortnite."
This illustration picture shows a person logging into Epic Games' Fortnite on their smartphone in Los Angeles on Aug. 14, 2020. (Photo by Chris DELMAS / AFP)
"If Epic were truly concerned that it would suffer reputational injury from this dispute, it would not be engaging in these elaborate efforts to publicize it," Apple wrote in a September opposition brief. "From all appearances (including the #freefortnite campaign), Epic thinks its conduct here will engender goodwill, boost its reputation, and drive users to Fortnite, not the opposite. That is not harm.”
Epic rejected those claims and said it is only trying to "offer consumers an alternative payment processing service that allows consumer choice and lower prices while this litigation proceeds without retaliation."
The Fortnite maker is not the only company complaining about Apple's App Store practices, however. Facebook and Microsoft have also condemned the company and its strict app store policies. A number of publishers and advertisers also filed an antitrust complaint against the company through France’s competition authority.
CLICK HERE TO GET THE FOX BUSINESS APP
In a Wednesday statement, Apple CEO Tim Cook said the tech giant is launching its new App Store Small Business Program "to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love."
"The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea," he said. "Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives."