SAN FRANCISCO, United States – While Apple chief Tim Cook praises the brand’s App Store as an economic miracle, Fortnite maker Epic Games says developers are suffering from its tyranny.
The online store – the only way software applications can reach iPhones or other Apple mobile devices – is at the center of a trial that will open on Monday in a federal court across San Francisco Bay.
‘AN APPLICATION FOR IT’
Apple opened its App Store in July 2008, a year after the launch of the first iPhone.
The store, stocked with mobile apps adapted for devices powered by iOS mobile software, was quickly imitated by rival smartphone makers.
This sparked an entire economy where developers, large or small, could make money from “an app for that,” from games or social media to car rides or food orders.
Apps are only allowed on Apple mobile devices through the App Store, which requires them to comply with privacy and security rules.
The App Store – the only gateway to the more than one billion iPhones in use worldwide – has grown to include more than 1.8 million applications.
Hundreds of billions of dollars worth of transactions take place on the App Store each year in what Apple’s chief Cook called an “economic miracle”.
Apple receives a commission of up to 30 percent of financial transactions on the App Store, where most applications can be downloaded for free.
In January, Apple reduced its commission to 15% for newbies and developers who earn less than $ 1 million a year.
Apple had already cut its 30 percent commission in half for paid subscriptions after the first year.
Some services, like the music streamer Spotify, have tried to persuade would-be subscribers to avoid using the App Store. While popular services like Netflix can rely on people doing business on their own websites, small developers don’t have that kind of attraction.
Amazon was a rare exception, negotiating a special deal on the App Store for subscriptions to its Prime television broadcast service.
Epic Games was launched from the App Store last year after it triggered an update to its Fortnite game that bypassed Apple’s payment system that collects commissions.
Epic has filed a lawsuit in the United States federal court against Apple, accusing the iPhone maker of monopolistic behavior due to its tight control of the App Store and charging a “tax”.
Apple countered that the commission reflects industry standards and amounts to fair compensation for providing a secure online store worldwide.
Epic and other app makers accuse Apple of tyrannically imposing App Store rules for the benefit of the Cupertino-based company.
Spotify argued that Apple gives its own in-store music service advantage.
On Friday, the European Union formally accused Apple of using the App Store to unfairly squeeze streaming music rivals in one of the biggest competition cases ever to hit the iPhone maker.
The payroll falls as Apple faces a rebellion from companies that want to get rid of its store’s strict terms and fees, while authorities in the US, Russia, Britain and South Korea are also surrounding the world’s largest company.
Facebook is among the critics of the App Store, saying the new rules, which block tracking users’ online activity for targeting ads without express permission, are an abuse of their power.
Google runs a mobile app store with Android technology and collects commissions, but it also allows users of devices to get apps elsewhere.