Tim Sweeney, the CEO of Epic Games—known for Fortnite and development tools like Unreal Engine—criticized Apple and Google as “gangster-style businesses” engaged in illegal activities during a Y Combinator event on Wednesday. He highlighted how the practices of these tech giants negatively impact Epic’s business by discouraging users from installing the Epic Games Store and hindering the company’s ability to attract developers.
Epic Games has been a significant player in the ongoing battle against big tech monopolies in recent years.
The company has taken legal action against both Apple and Google
for monopolistic behaviors related to their app stores. Epic prevailed in its case against Google but not against Apple. Nevertheless, the court did order Apple to enhance competition by modifying its App Store policies, allowing app developers to link to alternative payment methods outside of Apple’s own system. Unfortunately for developers, Epic continues its legal fight against Apple, claiming that the company violated the court ruling by only offering a minimal 3% reduction in commission for developers processing their own payments, which isn’t sufficient.
On stage, Sweeney reiterated his criticism of the big tech firms, accusing them of “malicious compliance” with court rulings.
“The unfortunate reality is that Apple and Google no longer act as good-faith, compliant companies,” Sweeney stated. “In many respects, they function like gangster-style businesses that will exploit any loophole. If they believe that a fine will cost less than the revenue they lose from continuing an illegal practice, they will persist with that practice and simply pay the fine.”
Sweeney pointed out how such practices are detrimental to his business.
For example, when Android users attempt to install the Epic Games Store, Google displays a warning that the software originates from an “unknown source” and could harm their devices. This “scare screen,” as Sweeney refers to it, is intended to caution users about the risks associated with installing apps outside of the Play Store. However, he states that this results in 50-60% of users abandoning the installation process.
A similar abandonment rate occurs on iOS. In Europe, the Epic Games Store is now permitted due to new regulations, yet Apple still presents a warning to users trying to install it, leading to a 50-60% drop-off rate, according to Sweeney.
He describes the use of these warning screens as “textbook self-preferencing,” emphasizing that these companies are “getting away with it.”
“Crime pays for big tech companies,” he remarked. “Real change won’t happen until enforcement is considerably more stringent,” he told the audience.
Additionally, Sweeney indicated that the complications and fees associated with third-party app stores on iOS deter major game developers from distributing their games via the Epic Games Store. Instead of the standard 30% fee, Apple reduces its cut but levies a “core technology fee” of 50 cents per install annually for any app that surpasses one million downloads.
“Unless your app generates significant revenue per user, free-to-play games face too many obstacles,” Sweeney explained. “The costs could be crippling for them. Apple would essentially drive them out of business with that model.”
He did mention that the Epic Games Store on iOS has succeeded in acquiring some older games, and he is hopeful that the upcoming opening for developer submissions later this year will further enhance the catalog on both Android and iOS platforms.
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