Fortnite's Success Calls into Question Apple's 'Monopoly'

Fortnite — the popular game developed by Epic Games — can be found in households worldwide. However, due to an ongoing antitrust lawsuit between the company and tech giant Apple, the game is missing from the App Store. Despite its absence, the game boasts over 350 million users worldwide and shows that big tech platforms are not as dominant as U.S. lawmakers believe.

The antitrust suit between Apple and Epic Games centers around Apple’s requirement that apps on its store use Apple’s payment system and the prohibition of external payment platforms. Judge Yvonne Gonzalez Rogers ruled that Apple could require the use of its sales system in the App Store but prohibited Apple from preventing the use of outside links that would go to alternative systems. Additionally, the ruling stated that while Apple’s actions are anti-competitive, its large market share and profits were not enough to show it’s a monopoly. Epic games appealed the ruling, claiming that Apple is an illegal monopoly preventing competition.

Mandating the use of Apple’s payment system was not only the center of this antitrust suit, it was a central pillar of the House Judiciary’s report on digital competition. The October 2020 report alleged that big tech platforms like Apple established monopolies and depressed competition, in part due to the mandated use of specific payment platforms.

The report stated that “Apple leverages its control of iOS and the App Store to create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings.”

Following the release of the House report, lawmakers in Washington have sought to impose constraints on how companies like Apple operate. Senator Amy Klobuchar’s American Innovation and Choice Online Act (AICOA) is a notable example. If passed, AICOA would prohibit big tech platforms from self-preferencing their goods and services, including payment platforms, even if they benefit consumers.

These proposals are perilous because they erroneously presume big tech companies are monopolies and run the risk of leaving sensitive consumer data in the hands of cybercriminals.

While Apple does charge a 30% commission on each transaction, the company has also created one of the most secure payment platforms on the market. Aside from double encrypting each transaction, Apple also requires payments to be authenticated by fingerprint, Face ID, or password.

With less capital to invest in data privacy and cybersecurity, smaller companies cannot generally offer these protections to consumers. These protections ultimately mean that sensitive financial data like credit card information remains out of the hands of criminals.

House Democrats alleged that Apple’s requirement that apps on its store use Apple’s payment platform is anti-competitive. While it is true that Apple has a significant market share — with 47 percent in phones and 24 percent in computers — it does not necessarily follow that developers are beholden to Apple for success.

At least until the Northern District of California rules on Epic Games’ appeal, its most popular game, Fortnite, will continue to be absent on Apple devices. However, this has not spelled disaster for the game or company, something that should be expected if Apple was as dominant as alleged.

Despite losing access to the over 100 million iOS users and the 73 million who played solely on Apple devices, Fortnite still boasts over 80 million monthly users, has been nominated for 40 gaming awards, and broke the record for the most concurrent viewers on the video streaming platform Twitch. These achievements would have been hardly possible if Apple was a monopoly.

Regardless of its absence from iOS, Fortnight is still available on Android devices, which make up a larger market share of the mobile operating system market. While Apple has 113 million U.S. users, Android boasts over 129 million U.S. users as of 2020. Fortnight’s continued availability on android devices also shows competition exists between big tech companies and mobile operating systems, a fact seemingly ignored by lawmakers and Epic Games.

While it’s undeniable that Apple is a tech giant, the antitrust suit brought by Epic Games over its payment platforms questions lawmakers’ monopoly allegations, who continually criticize the company’s perceived power. Moreover, the security offered by Apple’s payment platform also shows that big tech companies can offer real benefits for consumers. Taken together, the case should highlight that current legislative proposals will leave consumers worse off. 

Tirzah Duren is a Policy Analyst at the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.