|From: Sr K||7/2/2020 5:46:52 PM|
With $122 billion net of debt, Alphabet raises YouTube TV 30%.
YouTube, the video-streaming outlet owned by Google parent Alphabet Inc., announced Wednesday the latest price increase for its TV service that competes with traditional cable packages. YouTube TV will now cost $64.99 a month, up from $49.99 previously. The company has raised the price every year since launching the service in 2017, though the latest 30% rise is the biggest so far.
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|From: J.F. Sebastian||7/12/2020 7:47:17 PM|
| The game is rigged: A former marketer shows you how Big Tech’s advertising practices harm us all|
by Lisa Macpherson
July 10, 2020
As of this writing, it appears the U.S. Justice Department and a group of state attorneys general likely will file antitrust lawsuits against Alphabet Inc.’s Google for an array of anti-competitive practices in its search and ad technologybusinesses. At the same time, the Federal Trade Commission, Justice Department and a group of 47 state attorneys general have opened inquiries into Facebook, looking at antitrust behavior as well as possible privacy law violations.
It’s about time.
For 23 years, I held a front-row seat to the advent and evolution of digital marketing, witnessing its inevitable rise and twisted consequences. I specialized in helping companies adapt to the digital revolution but abandoned the field when I realized that the capabilities we marketers supported, like harvesting data, profiling consumers and personalizing content, were damaging society and our democracy. This is why I no longer help brands, including several who made their mark bringing people together, tear our communities apart.
I also left because I realized the game is rigged. The field is tilted, in favor of the two dominant players — Google and Facebook — who set the rules. This is the story of how we got here and what we can do about it.
Advertising abandons context for eyeballs: In the 1990s, advertisers negotiated directly with online publishers to place ads on websites in context that was relevant to their products, just as they had with traditional publishers. This was generally a real negotiation on an even playing field. But as we gained more data about our customers’ behavior, we started placing ads wherever we could reach their eyeballs — regardless of the content or location.
As the number of websites exploded, including thousands of small sites reaching niche audiences, we had to automate the process. By the early 2010s, a “negotiation” had transformed into a blind bidding war facilitated by layers of software programs — and every software provider levied a fee. These layers of advertising technology often meant advertisers did not even know where their ads were running or who was actually seeing them.
Ad costs rise while ad value and consumer benefits plummet: In 2017, a scathing book about digital advertising called “ Bad Men” explained how “the amazing world of ‘ad tech’ magically turns a dollar of online advertising into three cents of value.” Fraud provided one explanation for this value loss. Ads could end up on any of thousands upon thousands of small, unknown sites. We were told we were gaining “reach” and finding new audiences. Then we discovered that many of these sites were gaining traffic from bots — software programs designed to repeatedly load webpages — and not actually people. To combat this, we added “verification services” to our ad-tech stack — for another fee.
We also learned that these unknown sites could be toxic. We coined a new phrase, “brand safety,” to refer to managing the risk of advertising on sites that spread conspiracy theories, hate speech and propaganda. Now we needed “white lists” and “black lists” of content and sites where our advertising could or couldn’t appear. And thanks to the opacity and complexity of the supply chain of ad inventory, these lists didn’t always work.
They still don’t. Recently, we’ve seen reports of how Google’s ad tech continues to place advertisements of major, unwitting consumer brands on websites with content pushing coronavirus (and other) conspiracy theories. Advertising also lost value as consumers embraced ad blockers to prevent websites from loading advertisements. Ironically, Google launched its own ad blocker for its Chrome browser, essentially enabling the tech giant to set advertising standards, charge advertisers to place ads in content that may violate those standards and then block those same ads from view.
These issues in the supply chain became so egregious that some of the most prominent marketing executives in the world began calling them out. In 2017, Marc Pritchard, chief brand officer of Procter & Gamble, the world’s largest advertiser with a $7.5 billion annual advertising budget, described the digital display advertising supply chain as “ murky at best, fraudulent at worst.” A year later, Keith Weed, the chief marketing officer of Unilever, at the time the world’s second largest advertiser, referred to the digital media supply chain as the “ digital swamp.”
Advertising technology had become so complex and fragmented that Luma Partners, a consulting firm, invented the LumaScape chart to help marketers figure out all the companies that sold trading services, social media monitoring, verification services and more. This iconic chart was used by other clients to determine which service markets had the greatest opportunities for profitable acquisition or consolidation.
And that happened: Google went on a buying spree, and today their share of the key services in a marketer’s ad tech stack ranges from 40% to 90%. The company also holds a significant portion of the supply of all display ad space (20% is held by their YouTube unit alone). Despite the consolidation — or maybe because of it — things haven’t changed much since “Bad Men.” A recent report from the U.K. found that publishers receive only 51% of the money spent by advertisers to reach readers — leaving ad tech fees to swallow up most of the rest (and about 15% seems to just … disappear). Additionally, each of the 15 advertisers in the study appeared on an average of 40,524 websites, most of them classified as being “non-premium” ad inventory.
In other words, now Google is doing what it used to take thousands of ad tech companies to do: take premium ad dollars and somehow magically drain them of most of their value.
Facebook forces marketers to play its game while invading your privacy: That brings me to Facebook, another advertising-fueled business model and one unrivaled in its ability to target consumers at scale. Combined with its holdings Instagram and WhatsApp, Facebook has a 75% share of the social network market, and mostly thanks to Facebook’s 2 billion users, a 50% share of the total display ad supply. For any marketer that needs scale in social media, Facebook is the only game that matters. And since it has 100% control of access and pricing, marketers have to play by Facebook’s rules.
Some of the ways Facebook plays are deeply troubling. For example, due to its reliance on advertising for its business model, the company has perfected user experience design intended to increase “engagement” — that is, keep people scrolling because Facebook’s “inventory” consists of users’ time and attention. People are more likely to “engage” — like, comment on and share — information that creates a visceral emotional response. So highly partisan content, hate speech and conspiracy theories get upranked by Facebook’s algorithms, spreading far more quickly than dry but authoritative information. Ultimately, the ability to microtarget content — including ads — to more precise slices of the user base means the most inflammatory ideas — some designed to foment divisions in society — are virtually invisible to those who might counter them with the usual antidote to false or inflammatory speech: more speech.
Over time, Facebook even took on the creation of our ads: We would provide their ad sales team with hundreds of individual images, headlines and lines of copy, and the algorithm would optimize combinations that made consumers share, click or buy. Since advertisers pay more when a user takes some sort of action, Facebook has strong incentives to predict and then control users’ behavior. Frustratingly, we often had no idea what our “ads” even looked like or who saw them until a campaign was over.
In fact, advertisers have little visibility into or understanding of any of Facebook’s algorithms. We could communicate with our own customers (a “custom audience”), find customers like them (a “look-alike audience”) or describe what kind of customers we wanted to show our ads. Then the algorithm took over, compounding what we had described. Sometimes, the algorithm predicted what kind of customer you were from your activities on (or off) Facebook, even things about you that you might have thought were private.
We came to realize that the optimization combined with the predictive capability created the potential — and the reality — of bias, discrimination and exploitation. (Recently, a list of more than 500 advertisers, including Unilever, Coca-Cola, Levi’s, Starbucks and Ford, announced they would withdraw their advertising from Facebook — some included other social media platforms — for the month of July or longer, responding to a boycott campaign organized by civil rights groups. I see this is a welcome sign that advertisers are finally beginning to apply their leverage. And a series of civil rights audits — the final one published this past week — showed that the company still has a long way to go to address discrimination.)
Facebook’s voracious data collection practices — not only on its own platform but across many platforms and devices — and how it analyzed, packaged and sold access to that data earned them billions of dollars in government penaltiesfor violating users’ privacy rights. Eventually, thanks to Cambridge Analytica and other scandals, consumers came to understand how their privacy was being violated, and how they were losing autonomy and freedom. It took a while, because Facebook’s terms of service — which theoretically spelled all this out — were so hard to find, to read and to understand that it wasn’t really clear. They certainly weren’t clear enough to make you leave Facebook for another big social network that might have treated your privacy with more respect. And soon, there really weren’t any other big social networks.
To compete, advertisers must play by Google and Facebook’s rules: Today, Google and Facebook combined get just over 60% of every U.S. digital marketing dollar. As you might imagine, that kind of power and dominance in a market makes it difficult for advertisers of any size to negotiate.
To be fair, the ad community was complicit in some of this. We chased our customers in their inexorable migration to the internet for information, entertainment and socializing. We loved and needed the cost efficiency of highly targeted digital media and craved more reach. We wanted to influence our customers at every step of their “purchase journey” (a framework we invented to feel good about tracking consumers across devices and platforms).
So it’s been painful to realize that the very same capabilities we helped create — extracting information about users and their online behaviors; segmenting and profiling users for precision targeting; using algorithms to customize content to individual users; and designing user interfaces to increase time and engagement — are being used to distribute and amplify hate speech and propaganda, negate privacy and autonomy, manipulate and exploit behavior, and contribute to social isolation and addiction. No wonder consumers are losing trust in brands.
Regardless of how antitrust law deals with Google and Facebook, there’s one thing that’s crystal clear. Both companies have accrued so much power that they’ve had a lasting negative impact on advertisers, their relationships with their customers and consumers themselves.
We need a strong referee to change the advertising game and protect consumers: How do we solve the problems perpetuated by the dominance of Facebook and Google in the advertising market? It will probably take a system of solutions. The answer to many market problems is more competition and more choice, and I’m hopeful that antitrust enforcement will bring that about. A dedicated U.S. regulatory agency with specialized expertise and the agility it requires could also set and enforce new rules as a referee. Consumers also seem to be waking up to the harms of the digital platforms and may change some of their social behaviors. And given that 98% or more of these companies’ revenues come from advertising, I hope more of my advertising colleagues wake up to their power, too.
Lisa Macpherson is a senior policy fellow at the Washington, D.C.-based nonprofit Public Knowledge. She is a former consumer marketing executive.
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|From: Glenn Petersen||7/30/2020 6:52:54 PM|
|Alphabet reports first revenue decline in company history|
PUBLISHED THU, JUL 30 20203:31 PM EDT
UPDATED 2 MIN AGO
Jennifer Elias @JENN_ELIAS
-- Google parent-company Alphabet reported its first revenue decline in history. The company beat most expectations with the exception of its Cloud division.
-- Investors were non-plussed, and the stock barely moved after the report.
Google parent-company Alphabet beat expectations for its second quarter earnings Thursday, but marked its first revenue decline in company history as the coronavirus pandemic slowed economic growth and advertisers pulled back spending during the quarter. The company’s stock barely moved after hours.
Here’s how it did against Refinitiv consensus estimates:
EPS: $10.13 (non-GAAP), vs. $8.21 estimated.
Revenue: $38.30 billion vs. $37.37 billion estimated.
YouTube advertising revenue: $3.81 billion vs. $3.78 billion, according to StreetAccount estimates
Google Cloud revenue: $3.01 billion vs. $3.06 billion, as per StreetAccount
Traffic acquisition costs (TAC): $6.69 billion vs. $6.67 billion, as per StreetAccount
The company’s board also authorized the company to repurchase up to $28 billion of its Class C shares.
CFO Ruth Porat said on an earnings call that consumers returned to more “commercial” search queries toward the end of the quarter, and advertisers began increasing their search spending, so search revenue ended the quarter about even from last year.
However, she cautioned that it’s hard to gauge whether those trends will continue. “We believe it is premature to gauge the durability of recent trends, given the obvious uncertainty of the global macro environment,” she said.
As a result of the customer pullbacks amid the Covid-19 pandemic and the general maturing ad market, Alphabet itself cut marketing spending by half and instituted hiring freezes for the second half of the year in anticipation of a slowdown, CNBC reported. Around that time, Alphabet CEO Sundar Pichai said Google would be pulling back on some of its investments for the rest of the year amid the Covid-19 crisis, starting with hiring.
Analysts also peppered execs with question about future growth opportunities, given the slowdown in advertising growth. Pichai briefly pointed to newer businesses he sees longterm growth in such as cloud computing and artificial intelligence, as well as YouTube and shopping.
Google’s “other revenue,” which includes hardware like its Pixel phones, came in at $5.12 billion, compared to $4.08 billion in the same quarter a year ago.
Revenue from “Other Bets,” which includes Alphabet’s self-driving car business Waymo as well as life sciences company Verily, fell to $148 million compared to $162 million in the same quarter the year prior. The Other Bets showed an operating loss of $1.11 billion during the quarter.
Alphabet added approximately 4,000 new employees, making the full-time workforce consist of 127,498 during the second quarter. That doesn’t include contractors. Porat said that the company will continue to decelerate year-over-year headcount growth.
Google is also facing antitrust probes along the same lines by the Department of Justice and 50 attorneys general investigating Google company’s search and Android businesses. That is expected to result in legal action that could span issues ranging from its search product to digital advertising marketplace, according to a recent report from The Wall Street Journal.
When analysts asked about this on the call, CEO Sundar Pichai said “I think the scrutiny is going to be here for a while.” He added that the company will “adapt.”
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|From: Glenn Petersen||8/4/2020 8:32:55 AM|
|Google owner Alphabet issues record $10 billion bond at lowest-ever price|
PUBLISHED TUE, AUG 4 20205:51 AM EDT
Reuters via CNBC.com
-- Alphabet borrowed $10 billion in the investment-grade corporate debt market on Monday, the Google parent’s largest-ever bond issue, which it secured at its lowest-ever cost of financing.
-- Investor appetite was fierce for the tech giant’s six-part bond, as low interest rates and corporate bond buying from the Federal Reserve continues to support issuance.
-- The deal garnered more than $31 billion in demand, according to Refinitiv IFR.
Alphabet borrowed $10 billion in the investment-grade corporate debt market on Monday, the Google parent’s largest-ever bond issue, which it secured at its lowest-ever cost of financing.
Of the $10 billion on offer, the $1 billion five-year tranche was issued at a coupon of 0.45%, the lowest coupon seen at that maturity since Apple Inc issued a $1.5 billion five-year note at 0.45% in 2013.
Investor appetite was fierce for the tech giant’s six-part bond, as low interest rates and corporate bond buying from the Federal Reserve continues to support issuance. The deal garnered more than $31 billion in demand, according to Refinitiv IFR. Previously, Alphabet’s lowest coupon was 1.25% on a $1 billion May 2014 note.
“We’re at a stage where these extremely high-quality issuers - of which Alphabet is one — are going to price very very tight. That’s because there are a lot of buyers who need short-term, don’t-need-to-think-about-it money. You’re getting two times the yield on the five-year Treasury,” said Tom Graff, head of fixed income at Brown Advisory.
Last week Alphabet reported its first quarterly sales drop in its 16 years as a public company. Its share price was largely unmoved however, as the loss in sales was offset by a recovery in Google’s ads business.
“There is a very narrow set of companies that were already super high quality, that are not impacted by this recession we’re going through right now. And Google is one of them,” said Graff.
Alphabet’s five-year tranche priced just higher than Amazon.com’s 0.40% three-year note issued in June, among the lowest corporate coupons ever recorded. Alphabet’s 0.45% five-year tranche was however cheaper than Amazon’s June 2020 offering at the same maturity, which priced at 0.80%.
Of the $10 billion offered, $4.5 billion from the seven-, 20- and 40-year tranches will be used for general corporate purposes, including acquisitions. The remaining $5.5 billion will be used for green initiatives, the company said, the largest-ever issue of corporate debt for environment, social and governance endeavors.
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|From: Glenn Petersen||8/14/2020 5:03:05 PM|
|Applicable to both AAPL and GOOGL:|
APPLE HAS FINALLY MET ITS FORTNITE MATCH
Apple’s walled garden gets an epic test
By Tom Warren @tomwarren
Aug 14, 2020, 10:12am EDT
Epic Games executed its most ambitious Fortnite live event yesterday, leading both Apple and Google to remove one of the world’s most popular games from their app stores. It was a well choreographed sequence of events designed to highlight the power Apple and Google hold over app stores, especially Apple’s walled garden. Epic Games has now filed lawsuits against both Apple and Google in a battle that’s likely to last months. Epic Games is uniquely positioned to pull off a stunt like this, and now poses a serious threat to how Apple, in particular, operates its App Store and iOS operating system.
Apple originally launched the App Store as a way to add value to the iPhone and sell more of its handsets. “It costs money to run it,” explained Steve Jobs in a Wall Street Journal interview at the launch of the App Store in 2008. “Those free apps cost money to store and to deliver wirelessly. The paid apps cost money, too. They have to pay for some of the free apps. We don’t expect this to be a big profit generator. We expect it to add value to the iPhone. We’ll sell more iPhones because of it.” Apple’s App Store is now a massive $519 billion developer ecosystem. It’s also a key part of Apple’s growing services business, which is the second biggest revenue driver for the company, behind the iPhone.
Yet Apple has maintained a lucrative 30 percent cut of in-app purchases for digital goods for more than a decade now. It’s a policy that continues to annoy developers and the basis for a fresh and very visible challenge from Epic Games.
The latest controversy kicked off when Epic implemented a “permanent discount” yesterday on the V-Bucks digital currency used within Fortnite to purchase skins and other virtual goods. The roughly 20 percent discount was made possible this week because Epic Games now offers its own in-app payment scheme within Fortnite on iOS and Android, blatantly bypassing Google and Apple app store guidelines. Both Apple and Google have, for years, forced developers to use their own in-app payment schemes that require developers to hand over a 30 percent cut of in-app purchases on digital goods, which is only lowered to 15 percent for long-term subscriptions after someone subscribes for at least a year.
Apple and Google both argue this huge 30 percent fee is necessary for them to maintain their app stores and the security and simplicity they provide, but developers don’t agree. Others have tried to fight Apple’s 30 percent tax in the past by encouraging customers to sign up to services or purchase digital goods outside of Apple’s App Store. Some have compromised by jacking up their iOS prices to help recoup the lost 30 percent.
While this policy is central to the battle between Epic Games and Apple and Google, the fight is ultimately about power, control, and Apple’s approach to games and the App Store. Epic Games is uniquely positioned to fight Apple and Google with a game that’s played around the world by more than 350 million people. The game maker demonstrated its own power yesterday.
While most iOS and Android apps have to be approved and updated through Apple’s App Store or the Google Play Store, both companies make exceptions for games to allow developers to regularly update them within a shell app. You download a smaller container app, and then this app downloads the larger game files. Epic used this exception to its advantage, implementing its in-app purchase system without Apple or Google having to approve or deny it.
This blatant disregard for the rules left Apple and Google no choice but to remove Fortnite from their app stores. Epic’s quick, calculated response shows that the real target of its attention (and attention seeking) is Apple.
To start with, the company immediately launched a protest video inside the game designed to mock Apple’s iconic “1984” Macintosh commercial.
Apple originally used this Super Bowl commercial to highlight IBM’s dominance back in 1984, comparing the corporation to the dystopian novel by George Orwell that focuses on totalitarian political systems. “Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation,” says Epic Games. “Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear.”
Epic’s also encouraging Fortnite players affected by the ban to tweet at Apple with the #FreeFortnite hashtag. Epic is using all of its own power to execute a marketing campaign designed to highlight Apple’s control and power.
Epic made no such viral video or campaign targeting Google.
Given that Google has largely followed in the footsteps of Apple’s App Store, it makes sense that Epic’s attention seeking would mainly target Apple. You can also still play Fortnite on Android by sideloading the app, avoiding the Google Play Store. There’s also a lot more controversy surrounding Apple’s policy decisions and the inability for consumers to install iOS apps from outside the App Store.
Apple’s power and control over the App Store has come under increased scrutiny this year. Developers have typically avoided publicly calling out Apple for fear of retribution, but things are starting to change. Spotify was the first to file a formal antitrust complaint with the European Union last year, arguing that Apple harms consumer choice and stifles innovation through the rules it enforces on the App Store.
The EU is investigating Apple’s App Store policies. Illustration by Alex Castro / The Verge`
The EU opened a formal investigation into Apple’s App Store and Apple Pay practices earlier this year, and Epic Games, Match Group, and Rakuten all joined Spotify in protesting Apple’s App Store fees.
At around the same time, Apple got caught up in a bitter dispute over Hey — a new subscription email app — just days before its annual developers conference. Apple initially approved the Hey app in the App Store before rejecting a bug-fix update because it claimed Hey violated the rules by not offering in-app subscriptions. This led to a public back-and-forth that highlighted the inconsistent way Apple applies its rules, and it revealed just how much developers are terrified of Apple.
The Hey incident also led the chairman of the House antitrust subcommittee to label Apple a bully and say that Apple’s App Store fees are “highway robbery.” Separately, Apple CEO Tim Cook then appeared at a House Judiciary Committee hearing, alongside the CEOs of Google, Facebook, and Amazon a month later. The Big Tech antitrust hearing saw all four companies try to convince Congress that their business practices aren’t anti-competitive monopolies.
Cook’s testimony was particularly interesting, as he tried to argue that Apple’s rules are applied fairly and evenly to all developers. “We treat every developer the same,” said Cook. “We have open and transparent rules. Those rules apply evenly to everyone.” We know this can’t be true. Apple created a special program for “premium subscription video entertainment providers” that allows apps like Amazon Prime Video to let existing subscribers avoid Apple’s in-app purchases and 30 percent cut.
It’s a deal we still don’t really know enough about, although documents show that Apple brokered a special deal with Amazon that involved a 15 percent cut instead of the typical 30 percent for in-app purchases. Either way, it’s certainly not part of what Cook calls Apple’s “open and transparent rules.” This is just one, albeit significant, example of Apple not applying its rules consistently. Apple also tried to argue that “client apps” are allowed for business apps but not consumer ones in its justification for rejecting the Hey email app, even though this distinction never appears in Apple’s App Store guidelines.
These inconsistencies and rules have irked developers for years, but many have simply been too scared to call Apple out. The iPhone maker is the judge and jury when it comes to approving apps, and if you’re rejected, then there’s often no appeals process unless you can generate the press and attention to force Apple to change its mind. Hey eventually returned to the App Store on a wave of publicity (and a minor functionality tweak to its app). It’s a playbook that Epic is now looking to reuse.
Photo by Vjeran Pavic / The Verge
Epic Games is aligning itself to lead the fight for the entire industry, and the company has prior form. A mysterious “configuration issue” saw Xbox and PS4 owners playing against each other for the first time in Fortnite back in 2017, just months after Sony had refused to enable cross-platform play for both Rocket League and Minecraft. It put the focus squarely on Sony blocking cross-play, and eventually led to a public outcry when it was revealed Sony was blocking Fortnite cross-play between PS4 and Nintendo Switch players. Sony eventually backed down, after Epic Games laid the blame squarely on the PlayStation maker. Cross-play has since become an increasingly common feature in everything from Call of Duty to No Man’s Sky.
Epic Games’ rebellion against Apple and Google also comes just weeks after both Microsoft and Facebook spoke out against Apple. Microsoft condemned Apple for blocking its new xCloud game streaming service on iPhones and iPads. “Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass,” said Microsoft. Google is allowing Microsoft to launch xCloud on the Google Play Store, although in-app purchases on Android will only be available through Samsung’s Galaxy Store. Samsung also demands 30 percent of in-app purchases, but it also makes it clear that developers can negotiate an “alternative revenue share rate” during the certification phase for apps.
Facebook’s criticism of Apple’s App Store policies went a step further than Microsoft’s, describing Apple’s move to block its mini-games inside a Facebook Gaming app as a “shared pain across the games industry, which ultimately hurts players and devs and severely hamstrings innovation on mobile for other types of formats, like cloud gaming.”
Epic Games CEO Tim Sweeney is determined to fight Apple and Google. Photo by Rachel Luna/Getty Images
It’s clear that Epic Games wants things to change for both its own benefit and the broader benefit of the gaming community. Most smaller developers can’t afford to take on Apple or Google, but Epic Games is now valued at $17.3 billion and can certainly put up a fight. Games are also a key part of any mobile app store and a big part of how Apple generates revenue through its own App Store. Developers want a fairer cut of that revenue, but Epic also wants to shift Apple’s control here.
“We’re fighting for open platforms and policy changes equally benefiting all developers,” says Epic Games CEO Tim Sweeney. “And it’ll be a hell of a fight!” It’s a fight that Epic has prepared for, and its lawsuit specifically alleges that Apple has a monopoly in the form of the iPhone, its iOS ecosystem, and the App Store that binds them all together.
Epic has enlisted the counsel of Cravath, Swaine & Moore, which includes Christine Varney, a former US assistant attorney general of the antitrust division for the Obama administration. Varney also served as the Federal Trade commissioner for the Clinton administration. Katherine Forrest, a partner at Cravath, is also part of Epic’s lawsuit. Forrest is a former judge and antitrust litigator, and the Cravath law firm was also part of Qualcomm’s lawsuit against Apple.
It’s easy to dismiss this as giant companies squabbling with each other, filing lawsuits, and ruining Fortnite on mobile devices, but the resolution will have far-reaching consequences for Epic Games and the many other developers that rely on mobile app stores. Apple has met a defiant competitor that’s been able to bypass App Store rules and put two prices side by side to demonstrate the “Apple tax” that so many developers are upset about. Epic Games might not win its lawsuit in the US, but this isn’t about a single lawsuit. Epic is weaponizing Fortnite as a means to highlight Apple’s App Store policies and rally hundreds of millions of players to demand change.
Epic Games demonstrates the “Apple tax.
”It’s a risky move that Epic might be forced to reverse, especially as mobile players could miss Fortnite’s next season. Epic has gambled that most people already have Fortnite installed on their phones and tablets, so it’s unlikely to immediately anger its community, which can now see how much cheaper V-Bucks could be. More importantly, it has put the App Store, Apple, and Google directly in the spotlight for a showdown that will involve lawsuits, regulators, and the fate of mobile app stores.
Epic doesn’t want Apple to pay its way out of a lawsuit or reach a special deal with the company. It wants regulators in Europe and the US to stand up and pay attention. Epic isn’t your typical Fortnite player that hides in a bush until they’re the last person standing, it’s trying to be the loud and colorful llama standing strong as the circle shrinks around Apple and Google.
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