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Epic Games’ Ongoing Legal Battle With Apple and Google, Explained

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  • Epic Games, Apple, and Google have been engaging in their own battle royale to see if the tech giants are indeed monopolies.
  • Epic Games claims that both companies, through their associated app stores, restrict what users can access and force fees that amount to an unnecessary tax.
  • Additionally, Epic Games accuses the platforms of forcing this to be the case by not allowing, or heavily restricting, how apps can be accessed outside of the approved play stores.
  • Apple and Google both claim that the stores are for user data safety, and that their pricing models are in-line with industry standards.

Epic Games announced on August 17 that Apple has threatened to block access to developer tools, increasing the stakes of Epic Games’ recent decision to sue Apple.

The situation started last week, when Epic Games, the creator of the popular game Fortnite, was booted off the App Store for not paying Apple its 30% cut on in-App purchases within the Fortnite app. In response, Fortnite released a video that riffed on an old Apple ad and suggested the company was leading society to an Orwellian future.

This video coincided with Epic Games serving Apple an antitrust lawsuit. Almost right after all of this happened, Apple received an unexpected ally; Google. The other tech giant decided to also remove Fortnite from the Google Play story for essentially the same reason, leading Epic Games to file a lawsuit against it as well.

Past Criticisms

For longtime observers of the situation, none of this is particularly surprising. Tim Sweeny, the CEO of Epic Games, has been extremely vocal about his distaste for both Apple and Android. In fact, in response to a June 2020 change to the App Stores policies, he wrote on Twitter, “Here Apple speaks of a level playing field. To me, this means: All iOS developers are free to process payments directly, all users are free to install software from any source.”

However, the largest criticism from the CEO has been about the possible monopolies Apple and Google have with their app distribution platforms, and how that allows them to force developers to pay exuberant fees.

The fees cover 30% of both the purchasing of apps and in-app purchases. Sweeny says that having other app distribution platforms would mean that users could receive a substantial savings. To this effect, Epic Games put out a statement between suing Apple and Google that said, “Epic believes that you have a right to save money thanks to using more efficient, new purchase options. Apple’s rules add a 30% tax on all of your purchases, and they punish game developers like us who offer direct payment options.”

Lawsuit Arguments and Issues

In their various lawsuits, Epic Games lays out the same arguments, saying that the restrictive nature of the app stores means that Google and Apple arguably have monopolies. Yet, in the case of Google, Epic might face the argument that Google Play technically isn’t the only app store or way to get apps on Android.

Other app stores do exist, with the largest competitor being the Galaxy Store for Samsung Devices. Additionally, users can download apps directly from developers, something Epic Games offers on their Fortnite App.

It could be noted that Google Play is such a big platform and so heavily promoted on Android that most users don’t even realize there are other ways to get apps. Additionally, Google gives their store other advantages, like rolling out updates that restrict what type of location data can be accessed by non-Google Play apps, although there hasn’t been any limitations on in-app payments for those apps.

However the arguments against monopolization of the app ecosystem holds more water against Apple. The company’s platforms are a notoriously closed ecosystem, which is why Epic Games had originally focused their criticisms and efforts on Apple.

Easy Fix, Just Concede

For their parts, both Apple and Google have told various outlets that they want to work with Epic Games to have them on their app stores, but neither seem willing to concede on their guidelines, including the 30% cut. For example, Apple told The Verge that “The problem Epic has created for itself is one that can easily be remedied if they submit an update of their app that reverts it to comply with the guidelines they agreed to and which apply to all developers.”

Google largely has the same argument: that these rules are equally enforced on everyone and that Epic Games won’t get an exception. Regarding why the guidelines are even necessary, both companies have similar justifications.

The companies argue that by requiring apps to be on their app stores allows for a safer and cleaner experience for the user, additionally that having the same rules for everyone means that no one can claim they were treated unfairly.

However, that still leaves the elephant in the room and the big issue for everyone involved: the 30% commission, something that Apple and Google aren’t unique in having. Apple commissioned a study that found the 30% price tag is nearly ubiquitous among Apple and its peers. Notably a direct competitor to Epic Games, Steam, also charges 30%.

Notably though, Epic Games only charges a 12% fee for games on its platforms.

Epic Games isn’t alone in their frustration over the imposed prices. One of the biggest app developers out there, Tinder, has been extremely vocal about the issue, while Spotify launched a complaint with the European Commission about the fee.

The EU launched two investigations into the matter and have said:“It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices. We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books.”

In the U.S., lawmakers have increasingly applied pressure within the last year for both companies to explain the 30% cut.

Apple’s Retort

This situation has culminated in Apple’s threat to restrict Epic Games from accessing Apple Developer Tools. Epic Games claims they were told they until August 28 to fix the issues their apps had with the App Store or face losing their developer tools access.

Apple didn’t just cite the issue of cutting Apple out of their 30% fee. It also said Epic’s update descriptions were too vague. Either way, this could be a massive problem for Epic because without access to the developers tools, they’re barred from working on anything that goes onto the App Store.

Obviously that means no more Fortnite for iOS or Mac users, but that’s hardly the only thing Epic does on the App Store. The biggest casualty will be the Unreal Engine.

Gamers will recognize that name, but it’s one of the most accessible ways for developers to make games, and Epic owns it. The engine is used for more than just video games, but even film and television projects like “The Mandalorian” use it. It’s a mainstay in the entertainment industry.

No access to developer tools means no more updates for the Unreal Engine, and that means developers who rely on the Unreal Engine will be stuck using the same version, or possibly not even allowed to use the Engine at all on iOS and Mac devices.

This has put Epic in a hard spot, and so they went to the courts again. This time they’re asking for an injunction against Apple’s recent move, writing, “Apple’s actions will irreparably damage Epic’s reputation among Fortnite users and be catastrophic for the future of the separate Unreal Engine business.”

The company also added that without an injunction, there would be irreparable harm to itself, the Unreal Engine, and Fortnite.

See what others are saying: (CNBC) (Forbes) (The Verge)

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Instagram Testing New Tools To Verify Users Are Over 18

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The new tools include AI software that analyzes video footage of a person’s face to verify their age.


Instagram Cracks Down on Underage Users

Instagram is testing new features in the United States to verify the age of users who claim to be over 18 years old. 

According to a statement from Instagram’s parent company, Meta, the tools will only apply to users who seek to change their age from under 18 to over 18. The platform previously asked for users to upload their ID for verification in this process, but on Thursday, it announced there will be two new methods for confirming age. 

One of the strategies was referred to as “social vouching.” Using this option, people can request that three mutual Instagram followers over the age of 18 confirm their age on the platform.

The other method allows users to upload a video selfie of themselves to be analyzed by Yoti, third-party age verification software. Yoti then estimates a person’s age based on their facial features, sends that estimate to Meta, and both companies delete the recording. 

According to Meta, Yoti cannot recognize or identify a face based on the recording and only looks at the pixels to determine an age. Meta said that Yoti “is the leading age verification provider for several industries around the world,” as it has been used and promoted by social media companies and governmental organizations. 

Still, some question how effective it will be for this specific use. According to The Verge, while the software does have a high accuracy rate among certain age groups and demographics, data also shows it is less precise for female faces and faces with darker skin tones. 

Issues With Kids on Instagram

Meta argues that it is important for Instagram to be able to discern who is and is not 18, as it impacts what version of the app users have access to.

“We’re testing this so we can make sure teens and adults are in the right experience for their age group,” the company’s statement said. 

“When we know if someone is a teen (13-17), we provide them with age-appropriate experiences like defaulting them into private accounts, preventing unwanted contact from adults they don’t know and limiting the options advertisers have to reach them with ads,” it continued. 

These changes come as Instagram has been facing increased pressure to address the way its app impacts younger users. 

Only children 13 and older are allowed to have Instagram accounts, but the service has faced criticism for not doing enough to enforce this. A 2021 survey of high school students found that nearly half of the respondents had created a social media account of some kind before they were 13.

The company also recently came under fire after The Wall Street Journal published internal Meta documents revealing that the company knew that it harmed teens, including by worsening body image issues for young girls and women.

See what others are saying: (The Verge) (The Wall Street Journal) (Axios)

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Elon Musk Threatens to Fire Employees Unless They Work in Person Full-Time

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The world’s richest man in the world previously suggested that the popularity of remote work has “tricked people into thinking that you don’t actually need to work hard.”


“If You Don’t Show up, We Will Assume You Have Resigned”

On Wednesday, Electrek published two leaked emails apparently sent from Elon Musk to Tesla’s executive staff threatening to fire them if they don’t return to work in person.

“Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla,” he wrote. “This is less than we ask of factory workers.”

“If there are particularly exceptional contributors for whom this is impossible, I will review and approve those exceptions directly,” he continued.

Musk then clarified that the “office” must be a main office, not a “remote branch office unrelated to the job duties.”

“There are of course companies that don’t require this, but when was the last time they shipped a great new product? It’s been a while,” he wrote in the second email.

Later on Wednesday, a Twitter user asked Musk to comment on the idea that coming into work is an antiquated concept.

He replied, “They should pretend to work somewhere else.”

The Billionaire Pushes People to Work Harder

Musk has a history of pressuring his employees and criticizing them for not working hard enough.

“All the Covid stay-at-home stuff has tricked people into thinking that you don’t actually need to work hard. Rude awakening inbound,” he tweeted last month.

Three economists told Insider that remote work during the pandemic did not damage productivity.

“Most of the evidence shows that productivity has increased while people stayed at home,” Natacha Postel-Vinay, an economic and financial historian at the London School of Economics, told the outlet.

Musk is notorious for criticizing lockdown mandates and went so far as to call them “fascist” during a Tesla earnings call in April 2020.

Not long before that, Tesla announced that it would keep its Fremont, California plant open in defiance of shelter-in-place orders across the state.

In an interview with The Financial Times last month, Musk blasted American workers for trying to stay home, comparing them to their Chinese counterparts whom he said work harder.

“They won’t just be burning the midnight oil. They will be burning the 3 a.m. oil,” he said. “They won’t even leave the factory type of thing, whereas in America people are trying to avoid going to work at all.”

That same day, Fortune published an article detailing how Tesla workers in Shanghai work 12-hour shifts, six days out of the week, sometimes sleeping on the factory floor.

See what others are saying: (CNBC) (Electrek) (Business Insider)

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Apple Raises Worker Pay as Unions Gain Ground

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The company’s vice president of people and retail was caught trying to dissuade employees from unionizing in a leaked video.


Labor Squeezes Apple into Submission

Apple announced Wednesday that its U.S. corporate and retail employees will see a pay increase later this year, with starting wages bumped from $20 per hour to $22, though stores in certain regions may get more depending on market conditions.

Starting salaries are also expected to increase.

“Supporting and retaining the best team members in the world enables us to deliver the best, most innovative, products and services for our customers,” an Apple spokesman said in a statement. “This year as part of our annual performance review process, we’re increasing our overall compensation budget.”

Some workers were told their annual reviews would be moved up three months and that their pay increases would take effect in early July, according to a memo reviewed by The Wall Street Journal. Furthermore, they were told the increased compensation budget would be in addition to pay increases and special awards already received within the past year.

Feeling squeezed by low unemployment and high inflation, tech companies like Google, Amazon, and Microsoft have changed their compensation structures in recent weeks to pay workers more, and Apple is the latest to bend to market pressure.

Unions Gaining Traction

On Wednesday, The Verge received a leaked video of Apple’s vice president of people and retail, Deirdre O’Brien, explicitly dissuading employees from unionizing.

“I worry about what it would mean to put another organization in the middle of our relationship,” she said. “An organization that does not have a deep understanding of Apple or our business. And most importantly one that I do not believe shares our commitment to you.”

She vocalized more anti-union talking points, like the idea that the company will not be able to make important decisions as quickly with a collective bargaining agreement.

O’Brien has been personally visiting retail stores over the past few weeks in an apparent bid to combat budding union activity.

Apple stores in three locations — New York, Georgia, and Maryland — are currently pushing to unionize, with the latter two set to vote in elections on June 2 and 15, respectively. In response to these efforts, Apple has hired anti-union lawyers, given managers anti-union scripts, and held anti-union captive audience meetings.

In the United States, unionized workers make about 13.2% more than non-unionized workers in the same sector, according to the Economic Policy Institute.

As of Wednesday, Apple’s shares had fallen 21% since the start of the year, but sales grew 34% last year to almost $300 billion.

See what others are saying: (The Wall Street Journal) (CNBC) (The Verge)

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