What has happened? They have done it! Epic has struck it's first major blow on, in their view, anti-competitive App stores. US courts found in favour of Epic on every count in their recent legal battle with Google. Unsurprisingly, Google have appealed against these rulings, but it still marks a potentially seismic moment in the industry.
What does this mean for iOS? This is particularly important as it comes following a loss in the courts to Apple. That ruling is in the process of being appealed and it seems likely that yesterday's ruling will give their arguments additional weight to challenge those conclusions. After all, Apple and Google often point at one another as their biggest rivals and a clear example of competition in the sector. How can one be a market manipulating monopoly and the other not?
What are the implications of the ruling? In the short run, nothing will change as the appeals process takes place.
If the ruling is upheld, the key issue here is the 30% commission that Google/Apple charges on all transactions through their App stores. Epic want to be able to have their own App Store on phones and thus be able to cut out this significant cost from game developers. This fee is a material issue even for firms as big as Apple and Google, with both generating tens of billions of dollars from these transaction fees. One alternative here could be the reduction in this rate, though both Stores are known to offer more favourable rates to bigger developers, including Epic, who were clearly still unsatisfied with the suggested concessions.
This does spell trouble for the App Stores. Whilst we do not know what resolution to the problem will look like, the implications are hugely material for both Apple and Google that generate billions of dollar from this 30% commission revenue stream.
There are wider implications here. One of the key things that both Apple and Google provide is security when it comes to their stores. If they are forced to allow other App stores on their phones, they will not be able to police what is offered on those stores in the same way. The number of scam games, or game that simultaneously download malware onto your mobile alongside a game could potentially scale massively. Obviously, Epic is big enough and established enough to have its own policies in place to stop this. However, users looking for a bargain may be attracted to less legitimate sources in search of a bargain, something they are currently protected from.
Is there a chance this expands beyond Apple and Google? We know other stores such as Steam also charge a c.30% commission on games- will they be the next in Epic's crosshairs? The chances of this are minimal given the differing dynamics between computer game sales and mobile phone game sales. Epic can offer their game store online in direct competition to Steam, which all users can access, therefore there is no enforced monopoly in that market. What could be interesting is the read across into consoles. Microsoft have stated their ambition to bring Game Pass to each console, which will likely face opposition from its rivals. However, given this ruling, why should rivals be able to restrict users access to Game Pass? Could that be seen as anti-competitive? Only time will tell.