Friday, August 13, 2021

Today is the first anniversary of app developers' D-Day: #FreeFortnite -- Apple will lose if it doesn't change course and present real solutions

August 13, 2020. One year ago, to the day. At 2 AM local time, Epic Games CEO Tim Sweeney threw down the gauntlet to Apple by email, telling Tim Cook that Epic would from there on out refuse to comply with Apple's in-app payment rule and expressing "the firm belief that history and law are on [the Fortnite maker's] side."

The timing of the email was deliberate. This way, it was going to take a few hours before Apple would see this (and the fact that Epic activated a "hotfix" that presuambly was just a simple server-side value) and made an alternative payment system available in Fortnite. Apple kicked out Fortnite. So did Google, where Epic did the same thing. Epic filed its private antitrust complaints in the Northern District of California that day.

At the end of closing argument in Epic Games v. Apple (in late May), Judge Yvonne Gonzalez Rogers jokingly said she'd try to hand down her judgment by today. She later clarified that she just said so because of the first anniversary of the dispute, but cautioned that this important decision might take time given the complexity of the case.

Looking at the landscape a year after the launch of the #FreeFortnite campaign, it really does seem that the days of Apple's App Store monopoly abuse are numbered.

That's the way it should be according to common sense. Just imagine how totally absurd the current situation is: developers may spend what is a lot of money for them (even if not for the richest company in the world) on the development of an app, and they won't know whether they may actually publish it on iOS until it's done and they submit it to Apple's app review department. Apple's app review is intransparent, and some of the rules are neither fair nor reasonable, and they are not even clear, which results in an inconsistent application all the time.

Apple's abusive conduct is by far the worst that any company has ever done in the history of the technology industry to innovation and creativity. Forget about the IBM mainframe monopoply or the peripheral issues over which the EU imposed a huge fine (by the standards of the 2000s) on Microsoft. No company has ever shown as much disdain for the software developer community as Apple, which is closely followed by Google, though Android is the lesser evil than iOS, and Google is still nerdier, which I like despite everything that I criticize them for.

I wonder what must be going on in the minds of the people who make their company a tyrannical version of "Judge Dredd" (prosecutor, judge, and executioner) over developers' investment of time, energy, and money. Is it just hubris? Do they really believe they know better than everyone only because the late Steve Jobs did the right things at the right time, and because they've built an unprecedent tech empire on that basis, which is of course a huge achievement?

Even the brilliant Tim Cook was checkmated by Judge Gonzalez Rogers when she examined him in May. The facts forced him to acknowledge that the only reason for Apple's 15% cut (small business program) was little more than a response to antitrust pressures. The most important admission was that he, as Apple's CEO, doesn't even get reports on how satisfied developers are with how Apple is treating them. The judge mentioned a survey according to which 39% of developers are dissatisfied, and that's actually flattering for Apple because one could easily ask questions that would lead 99% of developers to confirm that there are real issues.

Let that sink in. The CEO of one of the two companies that have like 1,000 times more power over developers than even Microsoft ever had doesn't even care to know whether developers feel they're being treated fairly. The court knows why: because Apple has to compete with other phone makers for users, but then there's the app aftermarket in which Apple doesn't have to compete for developers. It's a two-sided market in which there's practically no competition at all on one side.

Epic is one of the largest and most profitable game makers. They knew that they weren't necessarily going to be "sympathetic" at the time they launched their #FreeFortnite campaign. I wasn't totally sold in the beginning, but what I immediately liked about Epic's initiative was that they were raising a broader issue than Spotify, which I feared was just going to improve the situation for those who compete with Apple's subscription services (i.e., just a very few players). Still, I do have to give credit to Spotify's Horacio Gutierrez, a former Microsoft IP chief. He had been fighting against Apple's abusive behavior for years, and raised awareness for the issue in important circles. Arguably, Epic was standing on the shoulders of this giant when it launched its fight for app developers' essential freedoms a year ago--and just on the last business day before the Epic Games v. Apple trial, the European Commission handed down its Statement of Objections based on Spotify's complaint.

Shortly after Epic's complaints, Epic, Spotify and others (with the most significant third player being Match Group, which is known for the Tinder app) founded the Coalition for App Fairness. Again, I wasn't initially sold, but I watched the further developments with an open mind and less than a year later I think--in light of the recent announcement by three United States Senators--that the CAF may go down in history as one of the most impactful and important policy efforts in the history of the tech industry.

The tide has turned. Apple may be losing this war much more quickly now than it would have considered realistic when this started a year ago. Legislative, regulatory and judicial developments reinforce each other. Apple and its army of loyalists (though I sometimes wonder how many of those Apple apologists on Twitter are simply Apple employees) can't explain away that the current situation is unsustainable and has to be brought to an end. The sooner, the better for the world in economic and other terms.

I noted on Twitter today that Apple may already have had more negative news cycles--not just in a quantitative but also a qualitative sense--in 2021 than in the decade(s) before. It becomes clearer and clearer that Apple is doing harm now that does not constitute the kind of "creative destruction" under Steve Jobs. Now it's just destruction for Apple's economic gain, with zero benefit to innovation. Ad tracking is an example. Apple has done and continues to do enormous harm to both advertisers and app developers selling their inventory, but third-party app stores can also remedy that problem.

Privacy is a mix of a policy pretext, marketing mantra and PR stunt for Apple. If it's about Apple selling you music, you should consent to GPS tracking. If it's about governments containing the COVID pandemic, Apple doesn't even allow that an app asks users to scan a QR code at the entrance of a venue. Applying such double standards is the "best" way for a company to lose its credibility with decision makers and opinion leaders.

Another example is that Apple seeks to justify its COVID app (mis)guideline with public health concerns while selling homeopathy crap. Homeopathy is fake science, bogus medicine--but never mind as long as Apple can make money with it.

A year after #FreeFortnite and the Nineteen Eighty-Fortnite video (which has almost 8 million YouTube views by now and even understates the problem), and less than a year since the Coalition for App Fairness was founded, the noose is tightening and change is coming.

Apple can counterlobby, defend, appeal. That's what it's currently focusing on. The alternative would be for Apple to realize that

  • it can do even better if it unleashes the app developer community's creativity,

  • it can still do well even with competition in the app distribution aftermarket, though it will face challenges, and

  • if Apple decided to make amends and engage constructively, it might do better than if it just kept opposing the structural change that is inevitably needed. Apple could--if it wanted to--go from app developers' worst enemy to one of app developers' best friends. They could focus on making the cake bigger rather than just focusing on their share and their control. But such ideas as my "contribute-back" licensing proposal aren't going to get traction, realistically. Apple looks set to hold out until the bitter end, because they think it's most profitable.

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