Apple pulls the plug on Epic

The Big Story

Apple pulls the plug on Epic

At first it looked like Apple was playing checkers while Epic was playing chess. By marshaling millions of Fortnite players, Epic was going to topple the App Store monopoly! But actually, Apple's out there playing Risk, and it just moved all its armies into Epic's territory.

• Epic says that Apple is now threatening to remove its developer license and cut off its access to all iOS and developer tools on August 28.
• "Not content simply to remove Fortnite from the App Store, Apple is attacking Epic's entire business in unrelated areas," Epic wrote in a legal filing asking for a court to undo the action. "Epic is likely to succeed on the merits of its claims, but without an injunction, Epic will be irreparably harmed long before final judgment comes."

One advantage Epic had in its fight with Apple was that it could survive without Fortnite on the App Store. Now the stakes are different. Epic's main product is the Unreal Engine — in fact, Fortnite was originally just a tech demo for Unreal — and now that business has been threatened by the largest company in the world.

• The Unreal Engine underpins some of the most popular games on the App Store, including PUBG, Mortal Kombat and, of course, Fortnite. And as Epic notes in its filing, Apple's never had an issue with Unreal before: It's been featured at Apple launch events, and is even used in some Apple Arcade games.
• And it's not just games. "The Unreal Engine is used to develop a wide array of products including games, films, biomedical research and virtual reality," Epic's filing says. "Millions of developers rely on the Unreal Engine to develop software, and hundreds of millions of consumers use that software."

It's a particularly bad time for this to happen to Epic. It's been showing off Unreal Engine 5, the next generation of the software, and one of its big selling points is its cross-platform abilities. Epic was setting it up as the cross-platform, cross-device entertainment platform of the future. That sales pitch doesn't really work without iPads, iPhones and Macs.

• Who stands to gain if Epic loses here? Well, Unity's the obvious choice, but CryTek's CryEngine is also popular. And don't sleep on Amazon: Its CryEngine offshoot, Lumberyard, could be a player too.
• If you're an Unreal client, I might start at least looking around a bit. Maybe Amazon can't make a game anyone wants to play, but I bet it can build a game engine.

Apple's been told to respond by Wednesday, and a hearing is scheduled for Aug. 24. Mark your calendar and bring popcorn, because things are about to get wild.

Search

'A dramatically worse Google'

Shakeel Hashim writes: The third season of "Succession" has been delayed, but no matter: On Monday, Google took aim at Logan Roy Rupert Murdoch, with a giant warning message on the Australian Google home page. "The way Aussies use Google is at risk," the message read, directing users to an open letter from Google's Australia and New Zealand Managing Director Mel Silva about proposed legislation that Google claims will ruin search for everyone.

This is the latest step in a protracted dispute between Big Tech and Australian media companies — most notably Murdoch's News Corp. and Nine Entertainment Co. The financially struggling media companies blame Google and Facebook for their travails and want the tech platforms to pay them for their content. The tech platforms … don't want to.

But, partly thanks to Murdoch's hefty political influence in Australia, the Australian competition authority proposed a code that would allow publishers to bargain for payment, with compulsory arbitration if they can't agree on terms.

• The code also requires Google and Facebook to meet "minimum standards," which includes giving publishers 28 days advance notice of changes to the ranking algorithm (something publishers have been burned by in the past), and allowing publishers to moderate users' comments on Google and Facebook.
• Those two clauses are contentious among some tech folk, to say the least.

The draft code is under consultation until the end of this month, and Google's clearly not going down without a fight. In the open letter, Silva said the code would make Google and YouTube "dramatically worse" by having to prioritize publishers' content and would put users at risk by giving their data to publishers. The competition authority hit back: It said the letter "contains misinformation" and argued that Google will not be required to share data with publishers.

Australia isn't the only country to be doing this: France is pursuing a similar avenue. On a call with investors earlier this month, News Corp. CEO Robert Thomson said "there are obviously more deals to come … I suspect in some ways, influenced by Australian regulatory thinking." Google had better start working on its rap song for Round 2.

Politics

How to pull off a virtual convention

Issie Lapowsky writes: Monday night, as the first ever virtual Democratic National Convention kicked off on a screen near you, Democrats began their attempt to pull off an unprecedented act of political showmanship. It required, they said, perhaps the most complex event in the history of livestreaming.

Democrats will host 11 hours of programming between Monday and Thursday of this week, including hundreds of different video feeds. Some of it will be live, some prerecorded. It'll be on multiple channels, set-top boxes, even Spotify and Alexa.

• Merging hundreds of remote video streams over a multi-day period is a production challenge unlike anything television has seen before, said Andrew Binns, chief operating officer of the Democratic National Convention Committee.
• "No one has ever done what we are going to do here," Binns said. "All of those remotes coming into a live broadcast in real-time and being sent out for four nights is an amazing feat that hasn't happened yet."

Then, there's the official party business — you know, like voting on a nominee and a platform — that the DNCC also had to figure out how to handle remotely. Throughout the month of July, the platform committee met on Zoom and broadcast their meetings on YouTube. In early August, delegates received individualized ballots by email, which they were to fill out and return to their state Democratic Party last week.

Meanwhile, outside of the party apparatus, tech giants are on the lookout for new threats and disinformation campaigns that could coincide with the convention.

• On a call with reporters last week, Facebook's head of cybersecurity policy Nathaniel Gleicher said that the conventions were a big topic of conversation when tech companies recently met with government officials to discuss election security.
• "Critical civic moments like that can often be a magnet for an operation," Gleicher said. "And in a time like this where the conventions are going to be different than they've ever been because they will be online, we need to think about does that change our posture?"

Join us Wednesday

During the 2020 national political conventions, Protocol will host a two-event series on the tech and policy needed to enable a diverse future workforce and a strong economy. Join us at noon ET tomorrow for the first event in the series, hosted in partnership with ITI.

Register here.

People Are Talking

Old Hollywood is dying, Barry Diller said, but one company's going to stick around:

• "Disney will remain relevant into the future. All of the rest of them are caddies on a golf course they'll never play."

President Trump said, again, that the Post Office's problems are all Amazon's fault:

• "Amazon and other companies like it, they come and they drop all of their mail into a post office. They drop packages into the post office by the thousands and then they say, 'Here, you deliver them.' We lose $3 and $4 a package on average. We lose massive amounts of money."

Request for product, courtesy of Kanye:

• "A VISION JUST CAME TO ME... JESUS TOK I WAS WATCHING TIK TOK WITH MY DAUGHTER AND AS A CHRISTIAN FATHER I WAS DISTURBED BY A LOT OF THE CONTENT BUT I COMPLETELY LOVED THE TECHNOLOGY"

Making Moves

American Express bought Kabbage, as the fintech landgrab continues. But this one wasn't a repeat of the blockbusters we've seen before: Bloomberg reported that the deal valued Kabbage somewhere just below $1 billion, less than when SoftBank invested in it in 2017.

DJI is undergoing big layoffs. The company told Reuters its structure "was becoming unwieldy to manage," and that it has been steadily laying off staff around the company since March.

Amazon is hiring 3,500 new corporate employees across the U.S., including 2,000 people in NYC. VP of workforce development Ardine Williams said the company's still an office-based one, despite allowing WFH until January.

Panos Panay is joining the board at Sonos. Microsoft's chief product officer is a sensible addition — like Sonos, he likes building and selling slightly-too-expensive gadgets — but it's also a bit awkward, given Microsoft's newly close relationship with Google and Sonos' increasingly heated legal battle with Google.

Rishi Dave is MongoDB's new CMO. He comes from Dun & Bradstreet, and has a long history in tech. He'll run MongoDB's whole marketing org.

In Other News

• Oracle is interested in buying TikTok, according to The Financial Times. The company may have one big advantage over Microsoft in the politically sensitive deal: Larry Ellison is a Trump supporter.
• Trump tightened restrictions on Huawei, requiring suppliers to get a license before selling it any chips made with U.S. software or machines. (Previous restrictions only applied to Huawei-designed chips.) One analyst called the move a "death sentence," and chipmaker stocks plunged on the news.
• On Protocol: Developers are using TestFlight to get around App Store restrictions. Well, that, and also to take advantage of the buzz of exclusivity: TestFlight screenshots are the hot new status symbol.
• DOJ employees are arguing about the Google antitrust case, according to The Wall Street Journal. Some think William Barr's being too hasty, and want more time to prepare a case. That could lead to a two-part lawsuit, with the first focused on search and an advertising-suit coming later.
• China's expanding its digital yuan trials to Beijing, Hong Kong and Shenzhen. This Fortune article is a great explainer of China's ambitious plan, which basically seems to be "use blockchain to usurp the dollar."
• Documents confirmed that the Secret Service is using LocateX, news first reported by Protocol in March. Babel Street's product uses consumers' location data to help law enforcement track criminals — and is, obviously, controversial.
• Verizon and Apple both launched streaming bundles. Verizon is giving some subscribers free Hulu and ESPN+ in addition to the already-announced Disney+, while Apple TV+ subscribers can now get CBS All Access and Showtime for a steeply discounted price. Wonder how long it'll be before a disruptive tech startup comes along and unbundles everything again?
• Robinhood continued its insane fundraising spree, this time netting $200 million at a $11.2 billion valuation. That's up from $8.7 billion last month, and way up from $7.6 billion in October.
• Silicon Valley execs are getting into plastic surgery in an effort to appear young. According to one doctor, lots of people specifically ask to look like Elon Musk, which, OK.

One More Thing

The WeWorkification of Starbucks

So you might not be going into the office anytime soon, but you're desperate to look at something other than your kitchen table all day, right? Well here's the future: a new Starbucks concept in Japan that has private phone booths for video conferencing, tables and couches for meetings, and a thing called a "ThinkLab" that you can book for 15 minutes at a time and I'm not even going to try and figure that one out. It's basically a WeWork, except the coffee's not free. And the company that runs it actually makes money.

Join us tomorrow

During the 2020 national political conventions, Protocol will host a two-event series on the tech and policy needed to enable a diverse future workforce and a strong economy. Join us at noon ET tomorrow for the first event in the series, hosted in partnership with ITI.

Register here.