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Fortnite: Microsoft sides with Epic in fight against Apple

(Image Credit: Forbes)
(Image Credit: Forbes)
Izaak
ANALYST
Modified 26 Aug 2020, 00:48 IST
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Some of you may remember when it was Microsoft on the receiving end of monopoly accusations. Now, the tech company responsible for Windows and the rise of the use of computers in everyday life has joined with the makers of Fortnite against Apple.


Microsoft’s anti-trust lawsuit

Back in the ‘90s Microsoft was on everybody’s mind. Its CEO at the time, Bill Gates, became the richest person alive in 1995. A few years later in 1998 Microsoft was sued by the United States of America under accusations that it violated U.S. law in attempting to create a monopoly by bundling and tying Microsoft produced products with its Windows operating system.

At the time, Windows was one of the only mass-market operating systems in the world, and it was believed that Microsoft was using this dominance to push its other products. 

In 1999 it was concluded that Microsoft ran a monopoly on operating systems and was actively attempting to crush its opposition (which included Apple at the time). In 2000, Microsoft was ordered to split its company into two parts, one which would handle just the operating system and one which would produce software and other products.


But then why aren’t there two Microsofts today?

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Following the ruling, Microsoft appealed and had the judge’s orders overturned. During the appeals process, the original judge stated that: 

“[Microsoft Executives] proved, time and time again, to be inaccurate, misleading, evasive, and transparently false. ... Microsoft is a company with an institutional disdain for both the truth and for rules of law that lesser entities must respect. It is also a company whose senior management is not averse to offering specious testimony to support spurious defenses to claims of its wrongdoing.”

Despite this, by September 6th, 2001, the DOJ announced it was no longer interested in breaking up Microsoft, and that it would instead seek a lesser penalty. Microsoft later decided to settle by allowing PC manufacturers to adopt non-Microsoft software.


Apple blocks Fortnite from its App Store

It’s hard not to see the similarities between what happened to Microsoft two decades ago and what is currently happening with Apple and Fortnite. Both companies stand accused of using their market share to reinforce their control and extract greater profits than they would be able to in a truly competitive field.

And indeed, Apple policy is to limit what apps work on iOS devices, Fortnite or otherwise. An iOS user can not choose to use an iOS device with the Google Play Store, for example. They can only use Apple’s App Store.

Therefore, when Apple decides that Fortnite is no longer welcome on its store, the net effect is that Fortnite is no longer welcome on any iOS devices at all. It would seem that the only option for consumers is to abandon iOS altogether.

The key differences, however, lie in each company's actual dominance over their individual markets. A 2006 survey of the most popular operating systems are as follows:

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2006 Operating System Market Shares

  1. Windows XP 86.80%
  2. Windows 2000 6.09%
  3. Windows 98 2.68%
  4. Macintosh 2.32%
  5. Windows ME 1.09%
  6. Linux 0.36%
  7. Windows NT 0.24%
  8. Macintosh Power PC 0.15%

Total accounted for - 99.73%

Source


As you can clearly see, Microsoft, even in the wake of its antitrust penalties, still retained around 96.9% of the total market share. It would be fair to say that someone who purchased a personal computer back in the mid-2000s would have little actual choice in terms of what they could get.

A computer with Windows would be compatible with almost all available programs, while a Mac would only work with certain, specialized programs. This is why many games, such as Fortnite, frequently start with a Windows version, and create a Mac version later.

But the difference between a monopoly and a trust is that, while a monopoly has all or most of the power controlled by a single entity (like Microsoft), a trust allows for multiple entities working in conjunction with each other to achieve the same goals.

Source: businessofapps.com/guide/app-stores-list/#1
Source: businessofapps.com/guide/app-stores-list/#1

To this end, it is worth pointing out that the App Store’s biggest competitor, the Google Play Store, has a large majority on Android devices that rivals Microsoft’s majority on operating systems back in the mid-2000s.

Source: businessofapps.com/guide/app-stores-list/#3
Source: businessofapps.com/guide/app-stores-list/#3
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Between the App Store (100% of iOS devices) and the Google Play Store (almost all Android devices), consumers and developers have no choice but to work with one or both of these massive companies, a situation that allows both companies to enforce massively unequal contracts on these developers, which Epic argues inhibits their ability to profit off their own product, Fortnite.


Is Fortnite really the victim of a trust agreement?

Simply judging by the numbers, it’s obvious that app developers really only have one option for Android and one option for iOS if they intend for their app to see a mass-market release.

Fortnite is in a fortunate position in that it has already achieved massive mainstream appeal. That means that it is in a rare position to circumvent the Google Play store on Android devices by releasing its own installer. This is similar to the way Fortnite got around Steam’s dominance in the digital games market. Fortnite was popular enough that players were willing to download an entirely new client, oftentimes just for the one game.

But for Apple products, there is simply no hope. Fortnite for iOS must go through Apple. In a way, Apple treats its customers as though they are licensing their Apple devices, rather than purchasing a product, and maintains very strict controls over what they can and can’t be used for.

This is why Fortnite and Epic has focused much of its attention on Apple more than Google. For smaller companies who have not yet released a product with the same reach as Fortnite, however, Google and Apple are one in the same. Both extract the same 30% “tax,” and developers must work with both if they expect their product to see a wide release.

Published 26 Aug 2020, 00:48 IST
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