 I'm working on a video about Hellpoint and Neo2 and how they're both souls-likes that are at the opposite ends of the souls genre, and I've been playing the Avengers Beta which is decent, if not all that exciting, but today I want to do a really quick video about Epic, purposefully getting Fortnite banned from Google Play and the iOS Store. For a couple of years, players have been angry at Epic over their effort to get games to be Epic Store exclusives. I never made a video about that because my feelings on it are apparently different from everyone else's on YouTube. Well, today we'll touch on that a little bit, and then we're going to talk about why Epic's new lawsuits are so important and how depressing it is that it now requires a private company to do the government's job when it comes to antitrust enforcement. Epic's huge battle after the logo and Epic assault. Let's start by making clear that while Epic isn't a little guy by any means, they are massive underdogs when it comes to this particular fight. As huge as Epic is, it's not in the same universe as Apple and Google. However, Epic is in a unique position to take on this fight because they're in such a safe spot financially. Unreal Engine is a money machine for Epic which means that they will always have that safe harbor. And of course Fortnite remains a behemoth making over a billion dollars a year for the company. For all the shit Epic has taken around their store and I agree the store is inferior to Steam in most ways. The fact is it's been a remarkably good deal for players. Epic has given out a ton of free games including some very good games. They're constantly having huge sales that don't even lower the amount of money developers and publishers make from a purchase and they have gotten a bunch of exclusives by paying more money to the people who make games. Now while Epic's assault on Steam and Google and Apple may appear similar from the outside, there are important differences. Epic's effort to set up a store was a play to end a near monopoly on PC game sales that Steam has built. And while monopolies are bad, the truth is that Steam has built their monopoly in a clearly legal manner. Steam has simply provided an excellent service. Still, even as we acknowledge that Steam's monopoly is legitimate, they've still used their stranglehold on PC sales to bully developers and publishers into paying exorbitant percentages on each and every sale. Epic has said that this is ultimately bad for developers and in the long run, bad for consumers as game companies are forced to account for a 30% cut to go to Steam. But Epic has never alleged that this is illegal. Instead, Epic has attacked Steam's monopoly through old-fashioned business competition. Epic has used the only possible methods available to try and cut into Steam's market share. Its ability to charge less to devs that use Unreal 3 and Unreal 4, and its deep pockets that let it create store exclusives. And here's why the store exclusive thing doesn't really bother me. Because I don't care about using Epic's launcher. It has no impact on my experience. Steam is a superior platform in most ways for the user, yes, but it's not a big enough deal that I enjoy a game less when I launch it through the Epic Store. In fact, I launch games from the desktop anyway, so it doesn't really affect me. Now, if you love achievements, or you use mods on a lot of different games, you have a legitimate gripe, but for me, those things don't matter in most cases. Outside of some Bethesda games and, you know, Minecraft, I don't really use many mods. It's always annoying me even that the same people who've decried Epic Store exclusives seem to have no problem with entire platform exclusives. Sony and Microsoft pay for exclusives that require you to buy a several hundred dollar platform if you want to play a game. Epic is asking you to install your thirteenth launcher. It doesn't bother me. While the inconvenience of an Epic launcher is certainly a downside, there are clear benefits to breaking Steam's monopoly. Competition drives improvement. There are two ways to grab market share in business. Offer a better product or a lower price. Epic has tried both. A better product by offering games that Steam can't because they're Epic exclusives and a lower price by passing those savings to consumers in the form of free games or in the case of Metro Exodus, a literal lower price for the game. So while it's an unpopular opinion, I simply don't find the cost of needing to use the Epic Store to buy Control or Borderlands 3 to outweigh the benefit of adding real competition to the market. And remember, again, it's only the purchase, not the launch. I can still launch any of these games from the desktop through Steam using the Add Game feature or through the fantastic God Galaxy Launcher or through the Nvidia Launcher. Let's get to what Epic is trying to do with Apple and Google. Apple and Google are illegal monopolies. In no world is the behavior of Apple and Google anything but illegal under U.S. anti-trust law. If you're old enough, you might recall the government's anti-trust law suit against Microsoft for its anti-competitive behavior. That investigation found a litany of terrible practices from crushing and purchasing competitors to making it almost impossible to install any browser other than Explorer. In fact, that is ultimately what the government charged Microsoft with and in a way Google and Apple greatly benefited from the breaking of Microsoft's monopoly. Chrome couldn't exist were it not for the government's successful takedown of Microsoft. Monopolies distort and ultimately twist the capitalist system. Our society depends upon new companies rising up and challenging the market position of older companies. For the hundred years between the Sherman Act and the mid-1990s, the government took this responsibility seriously. But something happened in the late 90s. The government simply decided it didn't care about these laws anymore. Because of the inherent corruption of our system and the almost religious belief that tech companies were somehow less evil, the tech giants were allowed to engage in unimaginable malfeasance. Everything Microsoft was guilty of, Facebook, Google and Apple are currently guilty of. Often much, much worse. Now, let's put up a little graph to show what's been happening. There are only two possibilities that can explain this graph. Either in the last two decades, all companies suddenly decided that they wanted to be really nice and start playing fair, or the government decided they'd rather just let huge corporations do whatever they want. I'll let you decide which you think is more likely. Now, before we specifically get into the cases here, we need to discuss the economic principle of rent-seeking. Monopoly rent-seeking is when a company uses its power and or the government to eliminate competition. When a company has no competition, it's able to start making more money despite not adding any value to the economy. Rather than invest in new economic activity, it's easier to make more money through your power and size. Monopoly rent-seeking happens when huge companies crowd out all competition and just start sucking up money like trolls under a bridge. Epic is fighting two of the most egregious examples of monopoly rent-seeking in the country today. Apple and Google's app stores. Though there are similarities between Epic's fight with Steam and their fight here, they're really not the same thing. Apple and Google take the same cut that Steam does. 30% of sales a developer makes are paid to the app stores, just like they're paid to Steam. But where Steam seeks that rent because it provides a better service, Apple and Google take that rent by ruthlessly making sure that no other services can even exist. Let's start with Epic's beef with Apple. Apple's app store generated $50 billion in revenue in 2019. That means just the app store would be the 64th largest company in the Fortune 500. Just the app store by itself. Now, how does Apple make all that money, you ask? Do they develop apps that customers love? No, they make that money by monopoly rent-seeking. See, Apple is a closed software ecosystem. You want to develop a new payment system for in-app purchases and charge 40%, but offer a better service for developers? Or maybe charge 20% and pass the savings to customers? No, Apple doesn't allow other payment services in their app store. In fact, Apple maintains a complete stranglehold on its platform. There's almost zero difference between Apple's behavior here and Microsoft getting busted for refusing to allow other browsers aside from Explorer within Windows. Apple would have every right to charge 30% in exchange for a better service for developers, but when they sit astride the app store and refuse to allow anyone else to even compete, that is almost the definition of monopoly rent-seeking. Epic pushed against this by turning on direct payments for skins inside Fortnite iOS. They gave customers the choice to use the Apple payment system or they could directly pay Epic through Fortnite and get a 30% discount. This was a direct violation of Apple's terms of service. Obviously, Apple couldn't allow this to happen and maintain their monopoly so they banned the game. Epic responded with a brilliant video that ate Apple's famous 1984 commercial and immediately filed suit. The beauty of Epic's suit and its lampooning of the old Apple commercial is it calls out what total bullshit tech self-image really is. Apple rose to prominence by promising a decentralized future of computing that would compete with the stodgy old monopolies like IBM. 40 years later, an Epic suit makes clear that Apple is behaving even worse than IBM. In fact, it's behaving very much like the monopoly railroads of the Gilded Age. This doesn't mean that Apple making money off of the app store is wrong. Apple can legally and ethically charge companies whatever the market will bear in exchange for selling its products through its store. But it needs to allow developers to make their games and products available somewhere else as well. It would need to allow independent app stores. It would need to allow other payment options. By making the only way to install apps on iPhones be either use the iOS store or root your phone and void your warranty, Apple has set up what I think is an illegal roadblock. Apple isn't making that 30% by providing a better service. They're making it by creating a walled garden. They make that 30% because there's no other option. If you want an app on the iPhone, you pay 30% of all your revenue and go into the iOS store. There's no other choice. And that's a monopoly. Now, let's look at Google because it arrives at the same place in a slightly different way. Epic starts its lawsuit against Google by cheekily quoting its founding mantra. Famously, Google's guiding principle was, don't be evil. Now, while the app store is far down the list of evil shit Google currently does, it's still a problem. Android is, of course, an open source operating system. So right off the bat, Google is in a different place than Apple. Apple simply won't let any other apps on its phones, period. But Google allows users to install software outside of the Google Play Store. This is why I think Epic sued against Google while equally meritorious will be an even harder one to win. It's perfectly possible for Epic to allow its games to be downloaded as APKs from a browser. In fact, the game was originally being distributed this way. So why did Epic stop distributing Fortnite as an APK and instead go back to the Google Play Store where they were forced to agree to the 30% cut? Because Google refuses to allow other app stores to be distributed on Google Play. So think about that. Technically, Android is open source, but Google will not allow alternate app stores or installers to be distributed on Google Play. Now, if that was the only issue, perhaps it wouldn't be that big a deal. Unfortunately, it doesn't stop there. Say you decide you actually want a different open source app store on your phone. Let's call it the Pliny Store, and there are other app stores. You can get them. So I cut a deal with Epic where if sales are made through the Pliny Store, they will only pay 10%. I try to get my app store listed on Google Play and they tell me to go fuck off. Okay, I decide to distribute my app store directly from the web. Well, how would folks find that? Oh right, they'll have to Google it, won't they? Okay, let's assume Google isn't evil and doesn't use its immense search monopoly to bury my app store. So you go to my website and download my app store and you start to open it and a huge red warning pops up telling you that this software isn't verified and will probably brick your phone and give you syphilis. So you have to click yes, I want syphilis. Then you'll be taken to settings where Google will ask if you're really sure that you want syphilis and maybe leprosy on your phone. At this point, many consumers are likely to decide it doesn't feel safe. I mean, Google clearly said it's not safe and it's not like they have a vested interest here. Is there a system for verifying your app outside of the Play Store so you can distribute it without the syphilis warning? No. If you distribute outside the Play Store, you'll have to deal with the warning. So while Android is an open source system, Google uses all sorts of tricks to keep you in the Play Store. Are they keeping you there because it's a better service or because it's better priced? Or are they keeping you there through unfair business practices and their monopoly power? Epic alleges that existing outside the Store is fundamentally impossible in this situation. And I can't do anything but agree with them. Google will certainly argue that they can't be responsible for software they haven't checked and put in their Store and I guess that's true. But surely there can be a service that allows a company to pay Google to have their software verified outside of Google Play, right? Ask yourself this. If there was a way to have a different app store on Apple, would Apple make less money? If there was a way to distribute a new app store on Google without the leprosy warning, would Google lose market share? If the answer is yes, then there is a serious problem. Because that means that these app stores aren't making money because they built a better widget. They're making money because they blew up everyone else's widget factory. You don't have to like the Epic Store, man. And you don't need to like Fortnite, I don't. But if you're uneasy with two companies having total power over the mobile app ecosystem, you should be rooting for Epic here. It's a national embarrassment that it took this to even get this issue in front of our legal system. Epic has been forced to do the government's job for them. And if Epic loses here, do you really think Google or Apple will ever have real competition? How could that even happen when these companies have spent 20 years building walls to prevent it? For all of our sake, I hope Epic wins. Alright, thanks for coming. I'll see you next time. Bye.