Epic Games CEO Tim Sweeney criticized Apple and Google, describing them as “gangster-style businesses” involved in illegal activities during a speech at a Y Combinator event on Wednesday. Sweeney highlighted how the actions of these major tech companies negatively impacted his own business by discouraging users from installing Epic’s Games Store software and making it difficult for Epic to attract developers.
Epic Games has been actively challenging big tech monopolies over the past several years. The company filed lawsuits against both Apple and Google for monopolistic practices related to their respective app stores. Epic successfully won its case against Google but was not victorious against Apple. However, the court mandated that Apple allow more competition by changing its App Store rules, enabling app developers to link to alternative purchasing mechanisms. Despite this, Epic continues its legal battle with Apple, arguing that the company has violated the court order by allowing developers to process their own payments only with a minor 3% commission reduction, which developers find insufficient.
Onstage, Sweeney once again criticized the large tech companies for their actions and their compliance with court rulings, which he deemed “malicious.” He asserted, “The sad truth is that Apple and Google are no longer good-faith, law-abiding companies. They operate, in many ways, like gangster-style businesses willing to do anything they think they can get away with. If they believe the fine will be cheaper than the lost revenue from an illegal practice, they will continue the illegal practice and pay the fine.”
Sweeney emphasized how such practices adversely affect his business. For example, when Android users attempt to install the Epic Games Store on their smartphones, Google issues a warning indicating that the software is from an “unknown source” and may harm their device. Sweeney referred to this warning as a “scare screen,” which he argues results in 50-60% of users abandoning the installation process. A similar drop-off occurs on iOS, where Apple issues a warning to users attempting to install the Epic Games Store, despite European regulations permitting it. Again, this results in drop-off rates of 50-60%.
Sweeney characterized the use of these warnings as “textbook self-preferencing,” indicating that the companies are “getting away with it.” He noted, “Crime pays for big tech companies. Obviously, we shouldn’t expect that to change until enforcement becomes much, much more vigorous.”
Furthermore, due to the friction and associated fees with third-party app stores on iOS, no major game developer is willing to distribute games through the Epic Games Store. Instead of the usual 30% fee, Apple reduces the fee and imposes a “core technology fee” of 50 cents per install annually for any app with more than 1 million downloads. Sweeney explained, “Unless your app is enormously high-grossing per user, any free-to-play game is largely dissuaded from that. It’s too expensive for them. Apple would bankrupt them if they did that.”
Despite these challenges, Sweeney noted that the Epic Games Store on iOS has attracted some back-catalog games. Additionally, the store is set to open up to developer submissions later this year, which Sweeney hopes will expand the catalog on both Android and iOS.
