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Epic CEO: App Store changes offer 'no relief to customers' from 'Apple Tax'

Epic CEO: App Store changes offer 'no relief to customers' from 'Apple Tax'

November 18, 2020 | By Alissa McAloon

Epic Games CEO Tim Sweeney says that Apple's 2021 changes to its fee structure are great for indie developers, but largely won't fix the core of his complaints against the App Store's "Apple Tax".

That change, announced this morning, sees Apple reducing its normal 30 percent share of all App Store revenue to only 15 percent starting in 2021, but only if an App Store publisher saw less than $1 million in revenue during the previous fiscal year.

Apple says that its App Store Small Business Program is a boon to the "vast majority" of its developers, but Sweeney argues over Twitter that this isn't the case.

Apple's 30 percent share of all App Store revenue is one of a handful of complaints at the center of Epic Games' lawsuit against Apple. While lower fees for smaller developers do seemingly address part of the issue raised in Epic's lawsuit, Sweeney maintains that most in-app purchases come from high-earning publishers.

Because of that, publishers will continue to price their in-app purchases higher to offset what he calls the Apple Tax and ultimately pass the added cost for Apple's share on to players.

"It’s great that Apple is giving indie devs a better deal," tweeted Sweeney in response to criticism on Twitter. "But 95 percent of in-app purchases are in bigger apps that Apple still taxes at 30 percent, so this will provide no relief to consumers who are paying inflated prices for items."

Epic used Fortnite as an example of what it believes in-app purchases would look like without that mandatory Apple Tax earlier in the year by adding its own, Apple-bypassing payment processing service to Fortnite on mobile and offering lower priced in-app purchases through that option only.

That addition by Epic and Apple's resulting removal of Fortnite from the App Store is what kicked off the current legal battle between the two companies. Epic Games argues, among other things, that iOS should be a more open platform and allow for other storefronts and payment processing services that don't go through Apple.

Epic has maintained throughout the resulting legal filings that its lawsuit isn't so much about padding its own pockets as it is about pushing back against what it views as Apple's unfair treatment of the larger development community. While he calls Apple's recent decision "one positive step towards a better approach" in another tweet, his comments show that Epic isn't satisfied with only that one change.

"We’re not fighting for a lower commission. Epic is fighting for fair competition among mobile platform companies, stores, and payment processors. If iOS were open to competing payments and stores, we’d happily return, even if Apple’s own payment service still charged 30 percent," reads another series of replies on Twitter. "Apple’s 30 percent commission is not wrongful, it’s just a bad deal. What is wrongful is Apple blocking competing stores and payment processors, to ensure that good deals can’t be offered to developers at all."

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