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Epic Games CEO Tim Sweeney Condemns Apple and Google’s “Gangster-Style” Business Practices
Tim Sweeney, the Chief Executive Officer of Epic Games, the company behind the popular game Fortnite and the Unreal Engine development platform, has strongly criticized Apple and Google, labeling their operations as “gangster-style businesses” engaged in unlawful conduct. Speaking at a Y Combinator event, Sweeney asserted that the practices of these tech giants directly impede Epic Games’ business by deterring users from installing the Epic Games Store and hindering the platform’s ability to attract game developers. These remarks underscore the ongoing antitrust tensions between Epic Games and the dominant mobile app store operators, Apple and Google.
Epic Games Spearheads Fight Against Tech Monopolies
Epic Games has become a prominent figure in the escalating debate and legal challenges against perceived monopolistic practices of major technology corporations over recent years.
Legal Battles Over App Store Policies
The game developer initiated lawsuits against both Apple and Google, contesting their app store policies as monopolistic. While Epic Games secured a victory against Google, its case against Apple was less successful. However, the court ruling in the Apple case mandated changes to App Store regulations, requiring Apple to permit developers to incorporate links to alternative payment systems outside of Apple‘s own.
Despite this ruling, Epic Games remains engaged in a legal dispute with Apple, alleging that the company’s compliance with the court order is insufficient. Epic Games argues that while Apple allows developers to utilize their own payment processing, the minimal commission reduction (3%) does not provide a meaningful incentive for developers to bypass Apple‘s payment system.
Sweeney Accuses Tech Giants of “Malicious Compliance”
During his public address, Sweeney reiterated his accusations against the tech corporations, denouncing their “malicious compliance” with judicial decisions.
“The regrettable reality is that Apple and Google no longer operate as reputable, law-abiding entities,” Sweeney stated. “In many respects, they function as gangster-style businesses that exploit any perceived loopholes. If they calculate that the financial penalty for illegal conduct is less than the revenue generated from that conduct, they will invariably persist with the illicit behavior and absorb the fine.”
Impact on Epic Games Store and User Acquisition
Sweeney elaborated on how these operational methods employed by tech companies negatively impact Epic Games’ business operations.
Specifically, he pointed to the warning messages displayed on Android devices when users attempt to install the Epic Games Store directly. Google cautions users that the application originates from an “unknown source” and could potentially harm their device. Sweeney characterized this “scare screen” as a tactic designed to discourage users from installing applications outside of the Google Play Store. He claimed this warning screen leads to a significant abandonment rate, with 50-60% of users halting the installation process.
Similar user drop-off rates are observed on iOS. Although regulations in Europe permit the Epic Games Store, Apple presents comparable warnings to users attempting installation, resulting in comparable 50-60% abandonment rates, according to Sweeney.
He described these warning screens as “textbook self-preferencing,” asserting that these major companies are successfully “getting away with it.”
Calls for Stronger Regulatory Enforcement
“Crime pays for big tech companies,” Sweeney asserted. “Realistically, we should not anticipate any change until enforcement mechanisms become considerably more robust,” he conveyed to the audience.
Developer Hesitancy and App Store Fees
Furthermore, the Fortnite executive emphasized that the complexities and associated fees linked to alternative app stores on iOS have deterred major game developers from distributing their games through the Epic Games Store. While Apple reduces its standard 30% commission for alternative app stores, it imposes a “core technology fee” of 50 cents per install annually for any application exceeding one million downloads.
“Unless your application generates exceptionally high revenue per user, the ‘free-to-play’ model becomes largely unviable,” Sweeney explained. “The cost is prohibitive for them. Apple‘s fee structure would bankrupt them if they pursued that route.”
Future Expansion of Epic Games Store
He acknowledged that the Epic Games Store on iOS has successfully attracted some older, back-catalog games. Looking ahead, Sweeney indicated that the store will begin accepting submissions from developers later in the year, a move he anticipates will further enrich the game catalog on both Android and iOS platforms.