What does the in-app purchase of outfits in the Fortnite battle royale game have to do with Article 102 TFEU on the abuse of a dominant position? Since last week, we have known the answer: it is the European sequel to Epic Games v Apple. On 17 February 2021, Epic Games started a new chapter in its legal battle against Apple by filing an antitrust complaint with the European Commission for alleged abuse of dominance by Apple through its App Store rules.
The facts are as follows. The App Store rules provide that in-app purchases are subject to a commission of up to 30%. Epic Games tried to circumvent this rule by launching its own in-app purchase system. Apple retaliated by removing Fortnite from the App Store. Epic subsequently filed claims against Apple in various countries worldwide, including the United States and Australia and most recently the European Union. In brief, Epic Games claims that by blocking direct in-app purchases by players of video games such as Fortnite, Apple is abusing its dominant position in the App Store.
Apple is not the only party in Epic Games' crosshairs. The video game developer has also sued Google on similar grounds. In addition, other companies such as Spotify and Kobo have expressed disgruntlement over what they see as monopolistic behaviour by Apple and Google, which blocks software developers from fully competing with apps made by platform operators such as iTunes. In addition, they contend that the commissions taken by Apple and Google on app revenue lead to higher prices for consumers.
Epic Games' EU antitrust complaint will subject Apple, and to a certain extent Google, to further legal scrutiny with respect to alleged abuse of a dominant position through its operating system. Indeed, in June 2020, the European Commission opened probes into Apple's App Store rules and Apple Pay system. The latter probe focuses on, amongst other issues, Apple's (i) terms and conditions for integrating Apple Pay into merchant apps and (ii) limitation on access to near-field communication ("NFC") technology to iPhones for payment purposes.
Closer to home, the Netherlands Authority for Consumers and Markets ("ACM") is currently investigating if the NFC restrictions imposed in certain mobile operating systems limit consumers' freedom of choice in terms of payments. Based on the foregoing, it appears that the antitrust authorities are increasingly scrutinising the control exerted by Big Tech players such as Apple and Google over means of payment in both online and offline transactions.
The European Commission's toolbox to prevent abuse of a dominant position when it comes to payments could be strengthened by the proposed Digital Markets Act, published on 15 December 2020. This draft legislation seeks to limit the possibilities for market abuse by platforms that perform "gatekeeper" functions, as is probably the case for Apple and Google with regard to the App Store and Google Play, respectively. The proposal is still in the early stages, however, and the end result could thus differ significantly from the initial draft.
The European Commission and the ACM will continue their investigations – regardless of the draft Digital Markets Act – so the question remains as to when iOS Fortnite users will be able to purchase outfits. Our hunch is that they will be able to do so later rather than sooner. Nevertheless, important changes to the (digital) payments landscape seem to be on the horizon.