Epic says there is a payment lock in the App Store, but Apple is only seeing friction


One of the Epic vs Apple The big keywords of the trial are ‘cross-wallet play’.

In Epic’s Fortnite“Cross wallet” means that you can buy in-game currency (known as V-Bucks) with real money on one device and then spend it on another device. The latter platform does not get a discount on your initial, non-virtual financial transaction, which is why Nintendo and Sony do not support cross-wallet access on the Switch and PlayStation.

Apple did support for cross wallet play before you ban Fortnite last year – and on the second day of the trial, that fact became a serious trap for Epic. Apple continued a lengthy cross-examination with Epic CEO Tim Sweeney, whose hour-long testimony included a digression as to whether Fortnite counts as a true metaverse or just a great free to play concert game. (Judge Yvonne Gonzalez Rogers suggested, and Sweeney agreed, that “the most easily acceptable analogy” might be the Steven Spielberg equation. Ready Player One.)

Sweeney was followed by two witnesses from outside Epic: the founder of an iOS yoga app, followed by the product manager for Nvidia’s cloud game service. All argued that Apple’s tightly run App Store forced customers to use clunky solutions. Meanwhile, Apple argued that the workarounds weren’t necessarily worse, just different.

Fortnite was kicked out of the App Store for adding its own V-Bucks purchasing system directly into the app, breaking Apple’s restrictions on processing in-app payments. But as Apple’s lawyers noted today, Epic had another option to sell V-Bucks on iOS. The company only had to sell them directly through its website, which users could access through the iPhone or iPad Safari browser without Apple getting any commission. When they started up Fortnite their V-Bucks would be waiting on iOS.

Judge Yvonne Gonzalez Rogers found this argument compelling enough to follow up. Why couldn’t iPhone users buy V-Bucks through Safari, she asked earlier Fortnite’s ban in August? Epic CEO Tim Sweeney admitted that Epic could have added the feature, but “it was not a very attractive option for our customers,” Sweeney told her. If anyone wants to buy V-Bucks, he said, chances are they are already looking at an item Fortnite. “To set Fortnite aside and grab a device, browse to a website, log in, make a transaction there, it’s extremely tricky. In short, “There is a tremendous amount of payment processing and customer friction associated with selling an item to an app user outside of that app.”

But after asking how old the most Fortnite players, Rogers suggested that a little friction could be a good thing. “Why is it so difficult that someone can’t do what I as a parent would call an impulse purchase?” she asked. “Isn’t that a responsible way to deal with a young customer base?” When people can buy V-Bucks and then switch platforms, “what you’re really asking for is the ability to get impulse buys.”

Sweeney said Fortnite had parental controls, but he didn’t dispute Rogers’s fundamental point. “Yes. Customer convenience plays a big part in this. People are much more likely to buy something if it is easy to buy something,” he said.

A similar question arose in a later witness. Benjamin Simon is the CEO of a company called Yoga Buddhi, which operates an iOS app called Down Dog. (Unfortunately, no one in court thought they were making an Updog joke.) Yoga Buddhi offers a hefty discount for signing up outside of the iOS app. And unlike Epic, sending people to a website is fine. However, Simon claims that Apple is making finding that website as difficult as possible.

Simon says Apple has rejected several versions of Down Dog that point to a discount elsewhere. At the moment, about half of iOS users pay a premium to sign up through the App Store. In comparison, only 10 percent of Android users pay a similar premium through the Play Store, as Google doesn’t have the same restrictions.

Simon acknowledged that Yoga Buddhi can reach customers through other methods, such as email, and help them switch to the discounted version. The problem, again, is friction. “We are limited in our ability to communicate with our customers from our product,” he complained.

From Apple’s perspective, both executives make a big deal with a minor inconvenience. Customers may have to work a little harder to save money, but that doesn’t equal a monopolistic lockdown. And while Sweeney describes Fortnite As a lofty metaverse, Rogers placed it in the very different context of “freemium” gaming – an industry whose powerful, frictionless gaming loops are regularly criticized as addictive and predatory.

But those criticisms likely support Epic’s claims. In recent years, regulators and researchers have become increasingly concerned about subtle design choices in apps, such as infinite scrolling, confetti animation, and adjustments to the sorting algorithms on social networks. There is a broad consensus that small nudges can significantly increase how many people invest in digital platforms. But Epic may have to work harder to convince a court that this investment isn’t bad thing.