While I was in Barcelona, I discovered this column, which includes a square dedicated to George Orwell, author of Homage to Catalonia and 1984. The latter article is a reminder of the totalitarian society that might arise if one person receives too much power. This isnt true for only politicians and governments, but also for technology and gaming. I was amazed by what he offered us before.
In a popular 1984 television commercial, Apple described the Macintosh computer as a counterforce to IBM''s blandness. Openness and freedom should rule over closed ecosystems or walled gardens and corporate greed.
Epic Games, the maker of Fortnite, reclaimed the value of this image as it accused Apple of antitrust violations in a federal court in August 2020. However, the court found the case in Apple''s favor in September 2021, but it is still proceeding through the courts, and Epic has filed another appeal to Apple this week. Epic has demanded that the lower courts reverse its ruling on a number of important arguments.
The issue remains: Why are we still interested in this case? While I was in Barcelona, this legal battle between big enterprises is interesting because it is a fight for consumers between a big tech platform owner, Apple, and a big developer on the platform, Epic Games. I decided to use that time to zoom in on some of the facts of the case and zoom out to see the big picture. I cant say that I have all the answers, but I am really sensitive to how the facts and the implications impact the outcome.
On October 3-4 in San Francisco, CA, MetaBeat will draw together metaverse thought leaders to discuss how metaverse technology will impact the way all industries communicate and operate.
Tim Sweeney, an Epic CEO, has advocated openness, and believes that before undergoing a significant change in platforms transitioning from the app stores and distribution platforms to the age of the metaverse, the universe of all connected areas, according to Citi. The metaverse will be worth up to $13 trillion by 2030, according to a statement. It will explain how significant the metaverse will be, and why it matters who governs it.
Sweeney wants that the tech giant rule the metaverse, because that means that they will be able to pay 30% of its royalty fees when someone buys something on its App Store from the developers. This is similar to a car manufacturer that charges a fee every time you gas up your car, according to Epic. Technologists fear that walled gardens like Apple or Meta or Microsoft or Google will rule the metaverse.
Apple and Google have created terms that will give them a hold on the metaverse unless there are substantial changes in their practices, according to Sweeney in an interview with the Financial Times.
These businesses claim they respect openness and they want to treat everyone fairly. Do we believe them?
I would argue that startups that construct platforms that increase a lot of users deserve a fee. But if they start to push around the developers that make the platforms valuable, then they are using a form of monopoly power. That is, as the federal laws are more than 100 years old, that could be used if Epic rallies enough people developers, regulators, lawmakers, and technology firms to its cause, and they strengthen antitrust enforcement.
Apple is going to launch a cool AR/VR technology that takes on Metas virtual reality and augmented reality platforms. And developers will get rich making apps for it if it succeeds. According to those who believe that innovation and capitalism are working in our favor, Apple should be rewarded for the investment it made and the risks it involved in developing the iPhone platform. It does not believe that the courts should strip it of the rewards for its intellectual property.
Epic claims that it''s been a long time since Apple did anything for us with its mobile devices like the iPhone and the App Store, and that in a brief this week, Apple''s regulatory authority was on the verge of being unlawful. However, Epic said that she erred when she found antitrust law and case history that Apple was falling short of violating a slew of laws.
When it came to a narrow but significant matter of anti-steering regulations, the judge did rule that Apple was acting in an anti-competitive manner. That part, she said, when it prohibited developers from saying in their App Store apps that they had higher prices for virtual goods. That is, Apple should not impose developers to hide information about better discounts off its platform.
Epic lost a major point as it claimed that it should be permitted to sideload applications on the Apple platform that enable them to redirect players so they may bypass Apple''s platform fees. I believe that Apple has enabled the best apps to rise to the top of the app store, and that those apps havent been infected all of us with malware. Epic contends that Apple should find a compromise where some form of notarization of sideloaded apps would make them more acceptable.
If we were in a perfect world, judges, regulators, and politicians across the globe would be able to see the dangers of new technologies and platforms such as the metaverse. They would be able to act to stop those risks and keep competition under bay, and to enable equitable interactions to blossom between developers and those who enable them to reach large markets. These would be unable to use its hold on a billion smartphone users to only use its app store and payment system, according to Sweeney.
I believe that the gaming companies like Epic, Roblox, and Microsoft (with Minecraft) are better equipped than the major tech companies to provide experiences that people really desire. Brands would likely side with Epic as they step up the path in this tough new world.
We might see alternative app stores gain traction, developer fees might fall, and Apple''s monopoly on payments might be reduced to pieces. These cost reductions and efficiency gains could be transferred on to consumers in the form of reduced prices, or they could be passed on to developers, enabling them to become healthier in the long run. That would benefit the entire gaming industry.
Despite a hundred years of case law, the judge is shaken off. Lawmakers are clueless when it comes to evaluating important new technologies and the balance act that happens between enabling competition and rewarding innovation. This case may not be the perfect one that alters the power between platforms and developers or between enablers and creators.
Epic Games may prevail only by winning in the marketplace, perhaps by drafting something that is even more desirable than Fortnite''s smash hit. Or other entities, like the crazes of decentralization behind crypto and blockchain games, may disrupt the status quo, take some power away from both developers and platforms, and give it back to the public.
Who would win in the battle for the metaverse? I believe it will be the company that takes the finest combined work, including game development, user-generated content, and machine learning. Ideally, Microsoft might be the leader in all of these things, and it will be stronger if its acquisition of Activision Blizzard goes through. However, no one company has a lock on all of that right now.
If I wanted to ask George Orwell what he believed would happen here, and what would be best for the people of the world, I wonder what he would say. I agree with him that this metaverse battle is one of the most important conflicts of our time.