Epic (& Facebook) vs Apple – A right Battle Royale pt. VI

Facebook wades in on its own account.

• Epic has added an important ally in its tussle with Apple but, as ever, Facebook’s participation is mostly about its own self-interest.
• Facebook is not joining the fight but will provide Epic with “relevant information regarding how Apple’s policies have adversely impacted Facebook and the people and businesses who use our services”.
• This was mentioned in a blog post titled “Speaking up for small businesses” which should really have added “and Facebook” to the end of the title.
• Facebook’s main gripe is that Apple’s policy shift that means that users have to opt-in in order to have their data utilised in order to enable targeted advertising to be sold on Facebook services.
• There is no doubt that this will hurt the businesses that use Facebook for marketing purposes, but in aggregate, it will hurt Facebook more.
• Small businesses have other options when it comes to spending their marketing dollars meaning that this policy will hurt Facebook far more than small businesses.
• This, of course, is why Facebook is making such a big deal of this and its claim that Apple’s own personalized advertising platform is not subject to the new policy could be very damaging to Apple if proven to be correct given that it could easily be viewed as a monopolistic practice.
• Google and Twitter are less affected because Twitter already knows (through what its users follow) its users’ interests and Google has search terms and its other services to guide its targeting.
• This is why the other advertising-based names are less affected by this change leading Facebook to mount the most resistance.
• Facebook’s biggest contribution to the Epic suit is likely to be its name which gives a significant boost to Epic’s claim that it is mounting its fight for multiple developers and not just itself.
• On that front, there has been very little movement, and there is little reason to expect much before the trial dates begin to near.
• I still think that at the end of the day, this dispute boils down to a fight over money just like Apple’s fight with Qualcomm and Samsung and Qualcomm’s fight with Nokia in 2008.
• Epic states that it is not seeking a special deal from Apple and Google but that it is fighting to give all developers the freedom to choose which payment method they use.
• However, I suspect that if it ends up winning special treatment from Apple and Google, then it will quietly settle, and the terms of the settlement will remain confidential.
• Epic is a private company and so a forensic analysis of any deal with Apple will not be possible as it has no requirement to disclose its financial performance.
• I think that this is the most likely outcome because the app store revenue is very high margin for Apple and it will not want to see it eroded which is what will happen should Epic achieve a high profile victory.
• Apple also has another incentive to settle as big tech is coming increasingly under regulatory scrutiny and the spotlight is increasingly being shone on Apple and its business practices.
• Epic has a tiger by the tail and it needs to hang on as there are teeth in the other end.