Good morning!
Yesterday, Epic Games started an epic fight by adding a new payment mechanism to bypass Apple's 30% cut. Apple responded by booting Fortnite off its platform, and Epic Games immediately bit back with a ready-made 64-page lawsuit. To round it off, they premiered a short film titled Nineteen Eighty Fortnite, a spoof of Apple's 1984 commercial. Soon after, Fortnite for Android was kicked off the Google Play store, and Epic fired off another lawsuit against Google, using its old "Don't Be Evil" mantra against it.
Meanwhile, Silicon Valley has spent the past few months raking in money selling so-called 'immunity passports', we discover that Trump's campaign traffic is being driven by the far-right and...Spanish sports, and we take a look at why the heck none of the most valuable startups have been founded since way back in 2004. (Hint: It might have something to do with the fact that Big Tech keeps buying them up.)
Have an awesome weekend!
Hackers at Magecart are rubbing their grubby hands together
Changing Apple's App Store model would suck for everyone except Epic Games
Challenging Apple's ridiculous 30% cut is one thing. But ending the App Store model would end the level playing field for developers and leave users open to fraud.
Yesterday, Apple booted Fortnite from its App Store after Epic Games added its own payment scheme to get around Apple's 30% fee.
Epic instantly shot back with a pre-prepared 64-page legal filing and a spoof of Apple's iconic 1984 commercial, which it dubbed 'Nineteen Eighty Fortnite'.
But in the court filing, Epic has stated that it is not looking for financial compensation. It wants 'fair competition':
"Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers," it said.
Now, it looks like Google has booted Fortnite off the Play Store for the same reason -- and Epic has shot back a similar lawsuit, using Google's own "Don't Be Evil" mantra against them.
The opening of Epic's Google lawsuit reads:
"In 1998, Google was founded as an exciting young company with a unique motto: “Don’t Be Evil”. Google’s Code of Conduct explained that this admonishment was about “how we serve our users” and “much more than that . . . it’s also about doing the right thing more generally”. Twenty-two years later, Google has relegated its motto to nearly an afterthought, and is using its size to do evil upon competitors, innovators, customers, and users in a slew of markets it has grown to monopolize."
This isn't the first time a tech company has caused a stink with Apple over its 30% "Apple tax".
Basecamp set the stage back in June when it launched its Hey email app without an in-app purchase option -- but after some intense back and forth, they settled. I wrote back then about how this was an obvious marketing tactic. "Picking a fight" was literally one of their key principles in their own marketing book.
That's why I was dubious when I heard about Epic Games picking a fight with Apple yesterday. "Standing up for the indie developer" sounds great in theory, but you don't go to the trouble of writing huge low suits and creating an entire spoof commercial unless you're getting something from it.
Well, it looks like Epic isn't fighting for the extra 30% of Fortnite sales...it's looking for a cut of everyone else's.
According to an excerpt from its Apple lawsuit, Epic wants to "provide a competing app store on iOS devices".
First off, the very idea of a "comepting app store" sucks.
There's a reason Apple and Google's app stores are so popular -- they're easy to use. Having tons of app stores would be an awful user experience that would force users to go back to slogging through Google to figure out where the heck they should go to download the app they need. Even a 100% cut means nothing if nobody actually downloads your app because they can't find it.
It doesn't stop there. Epic stipulates that users should be given the choice to "use Epic's or another third-party app's in-app payment processing tool."
At a glance, it seems to make sense. Using third-party payment processors would be way cheaper than using Apple or Google. For context, cuts from third-party payment processors can be as low as ~2%, vs. Apple and Google's hefty 30%.
But allowing every app to set up its own third-party in-app payment processing tool wouldn't just be an awful user experience -- it would be incredibly dangerous. Who wants to trust a tiny, unknown developer with their credit card details? Hard pass.
Big brands -- like Epic Games, for example -- would be fine. But it would be the end of the level playing field for smaller businesses.
Third-party payment processors come with a brand new set of problems.
While Apple and Google have wildly inconsistent policies for their stores -- Netflix got a free pass from paying Apple Tax on its $853 million U.S. annual iOS revenue back in 2018 -- their payment features are a major asset for developers.
Credit card-stealing malware is already a huge problem. If anyone could link to their own third-party checkout page, Hacker groups like Magecart would shit themselves with excitement. Every checkout page would have to be manually checked.
It would be a huge ask for users to unknown developers with side payments. And Epic certainly isn't a shining example. Its game Fortnite has been described as a 'money laundering paradise', with money launderers using stolen credit cards to buy V-bucks.If third-party side payments were allowed and credit card fraud became a problem --and make no mistake, it would become a problem -- Apple and Google would have zero transparency.
It's right for huge platforms to reduce the huge cuts they take from developers -- but opening up third-party payments is a recipe for disaster.
Pando's top stories this week...
None of the most valuable startups have been founded since 2004
Entrepreneurs, venture capitalists, business schools, and many university scientists and engineers have long believed that disruptions are common and that startups are driving these disruptions.
But it turns out that none of the most valuable startups have been founded since 2004.
One hypothesis is that new startups (such as YouTube, founded in 2004 and Instagram, founded in 2010) have been acquired before they had a chance to achieve top 100 market capitalization.
Silicon Valley is trying to create a new 'antibody elite'
In the antebellum South, Yellow Fever wasn’t just a deadly epidemic: it was a work requirement. More than 150 years later, alarming parallels to this horrific history are resurfacing.
There’s little proof that antibodies prevent people from becoming reinfected with COVID-19, but that hasn’t stopped Silicon Valley companies from raking in profit from ‘immunity passports’.
10% of Trump's campaign traffic comes from...a Spanish sports website
Using data from web analytics firm SimilarWeb, a study by Axios has revealed that traffic to Trump’s presidential website is over 4x greater than traffic to Biden’s presidential website, with Trump receiving 14.9 million visits in July, while Biden received only 3.6 million.
According to the study, Far-right conspiracy-hawking website The Gateway Pundit, clickbait headline website Citizen Free Press, and...Spanish daily sport newspaper Marca were the top three websites driving traffic to Trump's campaign.