Apple appeals Epic lawsuit, Twitter adds ads
originally published 10/16/21
Google responds to the Epic Games antitrust suit, Apple appeals
As the Apple v. Epic Games lawsuit goes under appeal, Google this week filed an answer and counterclaim in the Epic Games’ antitrust litigation against the company. The tech giant and Android maker denies Epic’s allegations of antitrust behavior and instead says that it’s owed relief, as Epic Games breached the Google Play Developer Distribution Agreement (DDA) by allowing Fortnite players who download the app through Google Play to use Epic’s own payment processing technology.
This situation is similar to what took place on the App Store, where Epic Games updated its app to workaround App Store policies, and then facilitated payments through its own payments system, in violation of its legal contract with Apple. The court’s decision in Apple’s case was that Epic owed financial relief to Apple, to the tune of $6 million.
Epic Games did much of the same thing on Google Play, the counterclaim alleges. Last year, Epic submitted a build of Fortnite to Google Play which used Epic’s own direct payments system and not Google Play Billing. This submission was immediately rejected for failing to comply with Google’s policies. Epic then submitted a compliant version in April 2020, which Google now describes as “an act of deception designed to provoke litigation.” The new version had concealed Epic’s payment system in an update that was sent to both Apple and Google’s app stores. This would allow Epic to switch over to its own payment system by applying a server-side configuration change, or “hotfix,” without Google’s knowledge.
That switch was flipped on August 13, 2020. It allowed Fortnite users to choose between Google Play Billing and Epic’s own direct payments system. Now Google wants to recoup the money lost to this version, as those who downloaded the app from the Play Store could continue to use Epic’s billing, even after the app was pulled down.
Epic’s position has been that Apple and Google’s requirement to use their own in-app payment systems exclusively is a monopolistic practice that disadvantages developers. In Apple’s case, the court agreed that Apple should not block developers from sharing a link to other payment methods inside their own app or communicating to customers. It did not declare Apple a monopoly. Despite the largely favorable ruling, Apple decided to appeal its case this week, after Epic filed its own appeal.
The key factor to Apple’s appeal is that it’s also asking the court to put a hold on it having to implement changes to the App Store’s anti-steering guidelines. That means, instead of permitting developers to add links to their website and other methods of payments, things would continue as is until the appeals case was decided. That could be months or even years from now.
In terms of the antitrust complaint, Google’s situation is a bit different from Apple’s, however. Android already allows for sideloading apps — that means there’s another method of reaching Android users outside Google Play, making an antitrust claim more difficult.
Twitter adds more ads
Twitter says it’s going to test a new ad format and placement on its platform. On Wednesday, Twitter Revenue Product Lead Bruce Falck said Twitter would begin showing ads on mobile devices inside conversation threads after the first, third and eighth replies. While the company stopped short of confirming the change would be permanent, it did say it would experiment with the formula to best determine the insertion points and layouts that made the most sense. Twitter also said it would consider making the display of the ads something creators would opt into, rather than forcing them to accept ads in their threads. In that case, creators would also see a share of ad revenue, Twitter said.
The company historically has struggled to grow its user base by significant numbers, meaning it’s had to get more creative with maximizing the revenue it’s able to extract from its existing users. Despite a flurry of new product development — which has included creator tools, subscriptions, audio chat rooms, tipping and more — Twitter has not yet had a runaway hit. For example, third-party data indicated recently Twitter’s new creator platform called Super Follow had only generated around $6,000 in its first two weeks live in the U.S. and Canada, or perhaps a bit more ($12,400 during 17 days in September, according to a second firm’s analysis).
Meanwhile, Twitter made a promise to investors that it will be able to double its revenue from $3.7 billion in 2020 to $7.5 billion or more in 2023. If the new products don’t turn a sizable profit, increasing Twitter’s ad load could help. Unfortunately…