Apple Epic Trial

Don’t expect the Fortnite trial to change Apple’s tune at WWDC, devs say

The Fortnite antitrust trial concluded last month, but WWDC might be business as usual.

Apple CEO Tim Cook speaking during the keynote stream of last year's all-virtual WWDC.

Apple's second all-virtual WWDC kicks off on Monday. But don't expect the recent Epic v. Apple trial to change the tone or message.

Photo: Andrew Harrer/Bloomberg via Getty Images

Apple will host its second all-virtual Worldwide Developers Conference starting Monday, giving the iPhone maker its annual opportunity to showcase upcoming changes to its software platforms and maybe some new hardware, too. But more important than in years past is that Apple communicates it cares about developers and actively wants to make their lives easier.

Because looming over this year's conference is the Epic v. Apple antitrust trial that concluded just a couple of weeks ago. At the heart of the case were accusations Apple illegally monopolizes app distribution on its platform, unfairly siphoning off profits from developers and locking consumers into an ecosystem Apple controls with an iron fist.

We won't have a verdict in the case for weeks or maybe even months. But while the trial often provided Apple an opportunity to make a rather convincing case for how it built the iPhone and the App Store and why it runs its mobile business the way it does, the trial also gave Epic and its legal team plenty of opportunities to paint Apple as the greedy overlord of iOS. In the picture Epic painted, Apple has been unwilling to change its behavior to protect profits, and exists in a market devoid of competition that would force it to.

Business as usual

The timing proves tricky for Apple. The company has to square many of the revealing comments its executives made both in private emails and in testimony while on the stand with the often polished, rosy message it sends to the world during events like WWDC. Perhaps most telling were responses from CEO Tim Cook in court where he characterized the App Store's 30% commission as "a return on our IP," and said he believes Apple creates "the entire amount of commerce on the store," justifying whatever commission it chooses.

One might think Apple would feel pressure to reassure developers or possibly throw them a bone. But that may be unlikely, said Ben Bajarin, CEO and technology analyst at Creative Strategies. "I don't think anybody expects them to make some drastic change in IAP," he said, referencing Apple's payment system, which enables its 30% cut. "[Developers] realize they're all stuck with some commission, and it varies between 15 [and] 30%."

Bajarin said Apple may lean on the pain points it feels it can change in subtle ways, like speeding up app review and ironing out inconsistent App Store policy enforcement. But the company likely won't acknowledge its fight with Epic or the dissatisfaction of big developers, even implicitly.

App Store satisfaction

Bajarin is in the process of conducting an iOS developer survey to measure satisfaction with Apple and the App Store, and he told Protocol that early results indicate figures similar to a study cited during the trial, which showed that roughly one-third of all developers feel some level of dissatisfaction. "You're seeing that a lot of really small developers for the most part are pretty happy," he said. But once they're a certain size, Bajarin added, and they no longer qualify for Apple's commission reduction down to 15%, then you start to see some grumbling.

This is consistent with developer Ben Sandofsky's experience working with Apple and building apps for iOS. Sandofsky, who built popular camera apps Halide and Specter with his business partner Sebastiaan de With under the company Lux, said he is still largely happy with how Apple has treated developers over the years.

"Every business owner, in every industry, would jump for joy at lower processing fees. I guess the core question is whether Apple's fees are reasonable for what they deliver," he said. "We're very happy with what we get out of the App Store in exchange for the fees. Compare it to Google Play, or even Nintendo's eShop, which are basically a search field and some lists."

Even the most successful iOS developers have voiced complaints about Apple in recent years, mainly focusing on app review delays and onerous App Store policies that force developers to jump through hoops. But Sandofsky said he tries to put them in the context of what Apple provides, how that offering has improved over the years and the company's core philosophy around closed ecosystems. "I feel like a lot of complaints come from people who expect something like web development. iOS is a closed and proprietary OS, which sounds bad, but it's all about trade-offs," he said.

Because of Apple's tight control of hardware and software, Sandofsky added, developers don't have to worry so much about supporting older versions of iOS thanks to high adoption rates and stable updates. "Compare this to Android or the web, where new feature adoption is incredibly slow and you have to support old things for what seems like forever, and iOS feels like a developer paradise," he said.

In Sandofsky's eyes, the feud between Apple and Epic was "mostly a distracting reality show" hashing out what are largely settled matters. "At its core, Apple justifies its cut by the fact it offers much more than payment processing. It provides an ecosystem. Given consumers spend way more money on the Apple App Store than Google Play, they clearly have a point," Sandofsky said. "In the end though, the case will not impact 99.9% of the developer community. It's a war between billion-dollar companies that happen to make apps."

Perspectives like Sandofsky's are pretty common among small to medium-sized developers, Bajarin said, and those are the people Apple is largely focused on catering to during WWDC.

"There is the idea that you acquired a customer you probably wouldn't have," he said of the App Store. By his estimation, Apple does seem to genuinely believe the creation of the iPhone, iOS and the App Store — in addition to the tools it provides and its ongoing and massive R&D spend — justifies a significant return in perpetuity. "That sentiment is to some degree reflected within the developer community. It does make sense. But it makes sense to your small to midsized developers," he said.

Spotify, another rival of Apple and routine critic of the App Store, feels much differently. Just as Epic in many respects represents the sentiment of large game developers, Spotify has often come to represent the argument against the App Store from the music industry. Some of the complaints are not the same; Spotify isn't all that interested in alternative app stores, for instance, but it does care about the 30% cut. Still, the large themes are the same: Apple has too much control and too little competition.

"It is clear to me that when it comes to their policies on app stores and the way in which they're treating [not just] competing apps, but a whole variety of apps on their App Store, is just unfair, and I think it deserves regulatory attention, and I think they're getting regulatory attention for it," Horacio Gutierrez, Spotify's chief legal officer, told The Verge's Nilay Patel on the Decoder podcast last week. Spotify's complaint against Apple in the EU ultimately resulted in antitrust charges from the European Commission back in April.

"You can love a company and at the same time be able to point out things that they should be doing differently," Gutierrez added. "The issue is not whether the rate is 30[%] or 15[%] or 10%. The issue is that the rate is arbitrary and they get to set it unilaterally because they've insulated themselves from competition."

'Developers really have no other options'

Steve Troughton-Smith, a macOS and iOS developer who tweets often about the Apple developer community, said he sees an "incredibly positive" relationship between the company and its developers of late thanks to Apple's new M1 chips and the ease with which you can now build apps for multiple Apple platforms. But again, this is the sentiment among small to medium-sized app makers.

"For the higher-profile developers who have followed the Epic lawsuit, and the prior Hey furor, opinions appear to have soured dramatically, but, realistically, what are any of us going to do? It's not like we can viably leave the App Store and go someplace else," Troughton-Smith said. "Few have the kind of resources that Epic has to fight against the system in this way, even if they're not the hero we wanted." That, he added, is the core problem he sees with Apple's ecosystem: You need to be there if you want to make any money at all, Apple knows this and Troughton-Smith thinks the company takes unfair advantage of that.

"For me, it seems very clear that Apple thinks it owns the platform and the users, and thus can demand whatever it wants from developers with little to no recourse available to said developers," Troughton-Smith said. "In their own research, they seemed to identify pretty early on that developers build for Android to try and gain users at scale, and then build for iOS to monetize the app or service off the back of that scale. This means that Apple is acutely aware that developers really have no other options if they want to participate in the modern app-driven economy. If you're not on iOS, you don't exist."

The judge in Epic v. Apple will be the one who decides whether any of Apple's behavior or its business model justify intervention from the court. But it's also clear Apple does care deeply about its public image, both among consumers and the developer community. It strategically released a press release in the middle of the trial touting how much fraud the App Store caught in 2020, not to aid its courtroom fight (witnesses were instructed not to read anything in the media) but as a method to combat Epic's public claims that the App Store is rife with scams.

"The Tim Cook testimony on the final day really rubbed developers the wrong way, when it seemingly became clear that Apple views the App Store as a way to monetize its IP and that if they had to give up control, they would find some other way to squeeze developers for what they 'owe,'" Troughton-Smith said. "It feels like a toxic relationship, and is dramatically asymmetrical: Developers bend over backwards to fit within Apple's ever-changing rules, knowing Apple can end their businesses overnight."

Whether Apple decides it needs to address views like those, or can afford to ignore them, will illustrate on a deeper level how it views challenges like Epic's. In the courtroom, the Fortnite trial was an unprecedented assault on the iPhone, Apple lawyers argued. But at WWDC, it seems more likely than not that developers with similar concerns will be met with business as usual.

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