Microsoft Backs Epic in Ongoing Battle with Apple

Microsoft release 564 page document in support of Epic's ongoing dispute with Apple, and continued availability of the Unreal Engine for developers in Apple App Store

[Notellin]

Typo corrected. Comment edited.

[Olly_S]

Ooof thanks for pointing that out - I'll update. Thanks!

[Notellin]

No Problem hahaha

[Kabaneri]

Not an Apple fan but Epic is in the wrong here. Acting like they're for the players when they really just want more MT revenue.

[Olly_S]

I personally think there's a lot of criticism to be made on both sides. Epic holding access to Unreal above Apple like a Damocles sword is using hundreds of would be developers as leverage, which I think is pretty questionable. Then again, they charge 5% to devs looking to utilise the engine, compared to Apple's 30% for simply owning a distribution platform. Sad truth is, no one is in this for the players, not that anyone expected them to be, of course.

[Name Last Name]

Too many people think Apple will win just because a TOS was signed. None of that will matter if the court considers OS system history and determines that Apple’s market is too closed or restrictive.

Obviously Epic is just thinking about the money but I would argue that it benefits consumers that they win.

[mali1]

I'm confused on why Microsoft thinks they have any right to get in this situation ( I don't see Nintendo or Sony jumping in). Didn't Epic violate T.O.S with Apple? This is a situation between those 2 companies not any of the other ones . I mean it is extremely excessive what Apple is doing but how else are they going to get the point across with Epic?

[Tacoboto]

To my understanding this is just regarding Apple not disabling Epic's developer account (and therefore Epic's official ability to update and maintain Unreal Engine for Apple platforms), not the Fortnite payment system that started this whole thing.

[mali1]

Thanks for that reply.

[Deathdeliverer]

The Apple App Store is THEIR store. How does someone come and negotiate a deal to pay half the bills to live in your guest bedroom. A couple years pass by then they start paying just their part of the light bill. You go to ask them what this is about and you see a letter on your nightstand. They tell you they appreciate everything you’ve done and how much they admire you BUT in the same breath tell you that they won’t be paying bills anymore because they are too high OR they feel that you can’t lawfully kick them out. They do want you to continue being friends though.

Wtf.

Nobody is wrong in this but epic. Microsoft is piggy backing because they want to try to force their XCloud on Apple and are using Epic to try and help get the door open. The popularity of fortnite has gone to Epics head and they feel like they have a must have on their hands that gives them leverage. Apple didn’t budge now they are holding Unreal hostage? That’s going to affect programmers and developers more than anything and hit them square in the pocket. That’s a petty and weak move by epic and Microsoft is really showing their inner scumbag by using them as a vehicle for their own gain. Apple shot them down too.

[Atom666]

While a reduction in the "Apple Tax" may be a strong reason why these suits are filed, remember that relief requested was to open up user access to other app services.

The issue is whether you can force all users to pay via their store. You buy the device, but are you then relegated to only utilize their store? What if want to buy and use a non-Apple piece of software with it.

Does Apple have the right to force everyone into its walled garden after that? That's ultimately what it comes down to.

We see the difference on the desktop OS front. This is why the MS suit from the 90s is referenced. Now, you can freely buy and download a variety of 3rd party apps and tools as you want on Windows and MacOS. Epic and others believe the same should be true in the mobile space.

We'll see how it plays out, but I'm confused as to why consumers would defend Apple here.

Imagine if the only software available on Windows had to be bought from the Windows store. You could tell Steam or others to go build your own OS if you don't like it. That wouldn't be a very popular sentiment, but for whatever reason, that's the excuse I keep hearing from Apple defenders.

[Deathdeliverer]

You can only use the PlayStation store on your PlayStation you bought. Why are you forced to into their walled garden. You bought it. 99% of your purchases go through there. Same for Xbox store. Same for Nintendo. And yes they could go build their own store. In fact, epic has accounts linked. You can buy ANYWHERE and just play on iPhone and cut Apple out that way. Why not let people login and buy on the epic store. Also in game advertise the benefits of doing so. Doing the contract, making the deal, and then trying to force the homeowner to change the deal because you don’t want to do it their way is totally wrong. Period. Hell, employment works that way. You can’t go raising hell because Todd makes more than you for the same job. Todd made his deal and you made yours. If you don’t like it, take your business/ talents/ ass somewhere else. There’s no “human element” in business. Sucks, but it is what it is.
Also your windows thing is totally different. Windows isn’t a “platform” it’s a operating system. It’s the most popular by far and wide but that’s all it is. Helps open files, runs programs, organizes things alll with a user friendly interface. If they limited you in anyway, there’s tons of other OS’s that would gobble up that market share like fresh cookies. People would deal with them working out the kinks as they made more money all for the sake of freedom of choice, of which there are many. That’s why androids are so popular.

With Apples store on apples Platform using apples OS or the PlayStation store on PlayStations platform using Playstations OS it’s totally different. They can allow and deny as they see fit. You can’t go run the Xbox OS on your PlayStation if you don’t like how it works.

[rainslacker]

"What if want to buy and use a non-Apple piece of software with it."

Then you can't do this officially. As agreed upon when you signed onto the device, and clicked agree to the ToS which you didn't read.

Apple is a closed platform. At best, the courts can prevent Apple from not allowing jail breaking, but that isn't always easy to do, and there is precedence with closed systems with Sony from about 10 years ago. The courts put out a judgement that since jail breaking was primarily for piracy, Sony wasn't required to not try and prevent it. And Apple's devices are no different, but since phones or mobile devices may not fall into the same spectrum as "jail-breaking is for piracy" as I believe there are cases which say that a person can jailbreak such devices from before as well(not well versed there), then that may become a thing.

But, this kind of judgement isn't likely to benefit the devs, Epic, or anyone who wants what Epic is trying to achieve here. The percentage of people who actually jailbreak their devices is pretty marginal in the overall picture.

"Does Apple have the right to force everyone into its walled garden after that? "

Yes, because that is what you are buying when you buy the device. You don't buy a new UHD player and get mad it doesn't have Dolby Vision when it wasn't sold as a DV enabled UHD player. Just because the hardware is there to allow it, doesn't mean you are entitled to it. Google allows other store fronts, Apple doesn't. It's the prerogative of the company. There are no third party OEM vendors which they are manipulating to prevent competition. They control the entirety of their devices and OS. Since they are nowhere near a monopoly on the larger market, there is no real anti-trust going on here. The anti-trust investigations against Apple now are because of the things they've done which prevent competition on their platform for apps and services that they themselves have an interest in. Apple isn't preventing Epic from publishing because of it's own product or service. It's just Epic isn't following the rules to publish on the platform. Apple restricting them in this case isn't anti-trust.

"We see the difference on the desktop OS front. This is why the MS suit from the 90s is referenced"

that was a much different case to this one. That case was MS stipulating to OEM vendors that they could not install other internet browsers other than IE with their OEM windows installs. They also strong armed vendors to not do dual boot configurations.

Apple is doing none of this with what Epic is fighting against, and I cited above what Apple's anti-trust is about, which is actually similar to what MS did, but also different. You could always freely download 3rd party on Windows and MacOS, but iOS isn't not MacOS or Windows. Epic wants it to be, but it isn't.

"Imagine if the only software available on Windows had to be bought from the Windows store."

This would require MS changing what they actually offer in Windows, and if they applied it to already existing versions of Windows, they would probably get slapped with anti-trust lawsuits. If they made a new product that tried this, then the consumer may not go for it, but if they did, then tough sh*t for the consumer.

[Atom666]

Which is what is to be determined in the suit. Have mobile devices like the iPhone reached a new level where the free market requires that you be permitted to allow 3rd party apps and yes, monetization methods? Maybe. That's what the court is going to look at.

It is no different than an OS in principle, which is why those old cases are cited. Remember where we came from. But for the free market and the laws protecting it, Windows could do the same thing ios is doing.

Consoles get by with it because they're not as popular and wide spread as mobile devices like Apple. Could you try making the same argument against PSN? Maybe. We saw glimpses of it earlier with Epic's push of a button cross-gen actions, right? Why didn't Sony want to allow cross-gen? And MS before it? While probably never rising to the same level as the present situation, there was enough pushback to cave a bit.

But the big sticking point with this suit is that mobile devices are pervasive, and have become necessary in our daily lives. When that occurs, and you have that walled garden, you're treading awful close to the antitrust line.

[ApocalypseShadow]

Cell phones aren't necessary. They're just useful to have.

Epic just wants more money on Apple's platform. Any argument in favor of Epic is ridiculous. Microsoft riding on this is obvious in that they too, want to make more money with Xcloud on Apple's platform since windows phones failed.

How a company thinks they can defy a policy, cut out the middleman and create their own deal, when the middleman owns the product, is a twisted world we live in.

[Atom666]

Well businesses want money, that's certainly true.

A bit ironic that 2 of the biggest antitrust suits in history involved phones (AT&T) and Operating Systems (Microsoft), yet people still say something like "Cell phones aren't necessary. They're just useful to have."

Cell phones are utilities at this point. Regardless, even that doesn't predicate being found to be a monopoly.

Go read the complaints and better understand the arguments made. Or don't and continue to shout at the clouds, whatever you think is best for you, I suppose. But please don't lick the horse shit off of corporate boots and then try to argue that THESE boots taste better than THOSE other boots. Your breath stinks either way.

[rainslacker]

Anti-trust isn't always about breaking up monopolies. Breaking up the bells was, but MS suit was about actual anti-competative practices that MS tried to do based on their dominance of the market.

The facts are though, is that Apple actually doesn't dominate the market. They are certainly a major player, and they definitely set up the business plan for how the whole market profits, but they are nowhere near a monopoly. Google offers some of what you are talking about, and is more successful. MS with their mobileOS actually was even more open about such things, and it failed miserably, despite being pretty good quality phones and OS.

These kinds of cases have already been tried in the past. The whole jailbreaking thing was passed down due to potential anti-trust issues, and with mobile devices it was deemed allowed for devices which were licensed out. But Apple doesn't license out it's OS. It controls the entire production of the hardware, software, and distribution. They aren't strong arming competition in this case, because they are their own product and service within the greater whole. A Sony case for PS3 said that since it was closed, jail-breaking didn't have to be an expectation for the system.

Many who use the app store to sell products would agree that Apple is probably the worst when it comes to support, but they actually aren't out of line for what they ask for as their cut of the revenues. While we could discuss if that amount is right, that's besides the point. But the court is going to look at that and say, well, they're not charging excessively more within their closed system, but going by industry standard. Even MS supporting them, but also taking the same amount renders the amount of revenue cuts argument moot in the court of law.

Epic wants to change that cut, and I really believe, and hope, that they manage to make that revenue split more agreeable across the board. I'm not against what they want to achieve by getting Apple to open up their system more. But, I think they are not doing this in a productive way. It seems too antagonistic, and they're trying to hard to win in the court of public opinion, hoping that will cascade as bad press for Apple, which they will care about enough to change their policies. But this isn't how Apple typically operates. They know it'll pass in the public, then people will keep buying their products, and devs will keep publishing their wares.

The courts can't dictate to Apple how much to charge. It's outside their purview. Apple isn't withholding a necessity(price-gouging). They aren't profiting excessively over being a monopoly(the bell breakup). They aren't strong arming competition to prevent other competing products(MS case from the 90's).

Apple is currently under investigation for anti-trust violations, but that has to do with what they've done within their own store, which is prevent or remove apps which would compete against their own products, sometimes after those competing products were already successful. But, that isn't what happened here with Epic, as Epic basically just violated the already agreed upon, and currently effective terms of service that they agreed to when they decided to publish on the system.

One can agree with what Epic is doing, or trying to do here. But that doesn't mean that Apple is in the wrong. Maybe morally or ethically, but that's based on our own ideals, not legalities or standard practices.

[Atom666]

@rainslacker
I’d say that yes, generally the term “monopoly” gets misused and misconstrued a bit. I think that is what tripped up OP here. Obviously you can’t say that Apple has a monopoly on cell phones when Epic itself is also suing Google for much the same criticisms.

Apple does dominate the market, but it depends on which market you are referring to. The stats utilized by Epic in the complaint are a bit skewed, but they make it a point to outline revenue share. At least superficially, they did that to show that Apple is “dominant,” but it also lends itself nicely to their other big talking point.

You touch on this when you tried to differentiate the old AT&T, saying Apple isn’t excessively profiting, and not price gouging. I do wonder if you typed that with a straight face, but regardless, Epic intentionally speaks at length about the obscene margins and profitability of the iphone. The whole vertical integration model of theirs is teetering atop of a dangerous cliff.

Epic knows that antitrust jurisprudence (at least in modern history) focuses heavily on consumer fairness. This is why they speak of the pervasiveness of the Apple device and the anticompetitive market and app payment system within it. This is also why they were sure to offer the two different price schemes prior to filing suit. They didn’t just circumvent the Apple system. They offered a choice: Pay $10 through Apple or forgo the “Apple tax” and pay $8 for the same items. That was clever.

We’ll see how that holds up, but their sticking point is that a billion users in the world (a figure they repeat throughout) are forced to stay in Apple’s market, and devs, which by extension = users, are being charged 30% more than the alternative (direct purchases), with no recourse available to them. The “stickiness” of the Apple system is a particularly interesting talking point of Epic’s, too.

While the courts cannot force a change in royalty split, Apple can be enjoined from blocking access to other payment systems. I agree that industry standards certainly aids Apple’s defenses, but if Epic draws enough attention to this, we could be looking at regulatory control being asserted down the line. Fear of any kind of government influence will result in Apple caving, at least that is my prediction.

Now, blocking competitor services is an issue. Epic is trying to argue that Apple maintains full control over not just apps, but other stores or markets altogether. It was ultimately the bundling of software that was the only real sticking point against MS, right? That begins to mirror the Spotify complaints over in the EU a bit, and they may have something there for Epic as well.

The morals and ethics of what Apple does do not concern me. I’m more interested to see what the courts do. They try to tow the line between unfair antitrust behavior and stifling innovation in the tech sector. Retaliating against Unreal won’t bode well for Apple, but I suspect this suit is only being used to get the DOJ’s attention, thereby getting the House’s attention, and then watching Apple back down.

Apple may see it as an important stand they have to take, but we’ll see if they don’t blink first. Either way, I don’t understand gamers on N4G defending any of them.

[Kaedro]

Lol at Microsoft for being a hypocrite. Microsoft also charges 30% of revenue. So does Sony and Nintendo.

[King_Noctis]

Microsoft support Epic in allowing the developers to keep using Unreal Engine and still be able to release those UE games onto the Appstore (because MS also use UE to develop some of their games). They say nothing about the 30% cut revenue.

[FanboysKiller]

Tim Cook is not Steve Jobs, not even close.

[franwex]

I read Tom Nook.