PROVO, Utah — Epic Games is suing Apple claiming it's being anti-competitive with the way it leverages the App Store's exclusivity to charge monopoly rents to game developers.
This comes after Apple removed Epic's Games from its app store in fall 2020 for trying to bypass Apple's payment system and commission fee.
James Czerniawski, the Tech and Innovation Policy Analyst at the Libertas Institute said, "Apple’s going to argue in the case and has argued that their practices are no different than industry standards and that they have a right to curate their app store as they see fit."
Apple used to charge a 30% commission fee for all businesses that host apps on its store, but it changed it to 15% for small businesses at the beginning of 2021.
The lower fee is only for app developers making up to $1,000,000.
"There are many developers out there that are okay paying the fees to Apple because they see a value in the service that Apple provides, from the tools and the support and everything else that Apple does to promote the apps within their store," said Czerniawski.
If Epic wins the lawsuit, Apple could be forced to change its policies and give users more options about where they get their apps from.
An app developer who would like to see changes from this lawsuit is Joon Beh, the Co-Founder & CEO of the Utah-based company Hallo.
"Honestly, I am on Epic’s side," said Beh.
The language learning platform offers private lessons and group lessons.
Because of how the App Store policies work, private one-on-one lessons can be paid for with PayPal or Stripe, which only takes a commission between 4% and 7%, but group lessons with Hallo have to process payments through the app store, which is subject to the higher commission fee.
"How much we pay to Google and Apple means a lot to us and that’s exactly what affects how much we’re going to be able to share with our teachers," said Beh.
Hallo takes a 30% commission fee from its teachers and teachers take the remaining 70%.
If students are paying through Google or Apple, Hallo is paying 30% to those companies and Beh said there’s no way for his company to share more profits with language teachers on the platform and make prices more affordable for our students if the app stores keep charging higher commission fees.
The CEO of Hallo said he agrees the App Store does allow him to reach more customers, but he still feels like the commission fee is stopping companies like his from reaching their full potential.
Beh said, "Because of that cut, we can’t really have enough profit to be able to innovate and provide better services for our customers."
If policy changes were to be made, because of a ruling in Epic's favor or otherwise, Beh said it could help companies like his become more successful because they could lower operation costs and pay their teachers more.