22 August 2020

Launched with $17 million by two former Norwest investors, Tau Ventures is ready for its closeup


Amit Garg and Sanjay Rao have spent the bulk of their professional lives developing technology, founding startups and investing in startups at places like Google and Microsoft, HealthIQ, and Norwest Venture Partners.

Over their decade-long friendship the two men discussed working together on a venture fund, but the time was never right — until now. Since last August, the two men have been raising capital for their inaugural fund, Tau Ventures.

The name, like the two partners, is a bit wonky. Tau is two times pi and Garg and Rao chose it as the name for the partnership because it symbolizes their analytical approach to very early stage investing.

It’s a strange thing to launch a venture fund in a pandemic, but for Garg and Rao, the opportunity to provide very early stage investment capital into startups working on machine learning applications in healthcare, automation and business was too good to pass up.

Garg had spent twenty years in Silicon Valley working at Google and launching companies including HealthIQ. Over the years he’d amassed an investment portfolio that included the autonomous vehicle company, Nutonomy, BioBeatsGlookoCohero HealthTerapedeFigure1HealthifyMe,  Healthy.io and RapidDeploy.

Meanwhile, Rao, a Palo Alto, Calif. native, MIT alum, Microsoft product manager and founder of the Accelerate Labs accelerator in Palo Alto, Calif., said that it was important to give back to entrepreneurs after decades in the Valley honing skills as an operator.

Image credit: Tau Ventures

Both Rao and Garg acknowledge that there are a number of funds that have emerged focused on machine learning including Basis Set Ventures, SignalFire, Two Sigma Ventures, but these investors lack the direct company building experience that the two new investors have.

Garg, for instance, has actually built a hospital in India and has a deep background in healthcare. As an investor, he’s already seen an exit through his investment in Nutonomy, and both men have a deep understanding of the enterprise market — especially around security.

So far, the company has made three investments automation, another three in enterprise software, and five in healthcare.

The firm currently has $17 million in capital under management raised from institutional investors like the law firm Wilson Sonsini and a number of undisclosed family offices and individuals, according to Garg.

Much of that capital was committed after the pandemic hit, Garg said. “We started August 29th… and did the final close May 29th.”

The idea was to close the fund and start putting capital to work — especially in an environment where other investors were burdened with sorting out their existing portfolios, and not able to put capital to work as quickly.

“Our last investment was done entirely over Zoom and Google Meet,” said Rao.

That virtual environment extends to the firm’s shareholder meetings and conferences, some of which have attracted over 1,000 attendees, according to the partners.


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Hey Apple, how about a MacBook SE?


Apple’s a hard company to like these days. Their glory days behind them, they have relentlessly pursued a misguided concept of optimization that has alienated their user base and compromised their products. A MacBook SE would go a long way toward smoothing the wake they’ve left behind them.

I was excited that this would be a possibility years ago when the iPhone SE came out. “Here,” I thought, “is a company that has come to recognize the value of its legacy products.”

Although the (old) SE is indeed the best phone Apple has ever made, it’s clear now that it was little more than a way to squeeze a bit more money out of some leftover components. (The new SE seems to serve the new purpose, but I’ve embraced it nevertheless as the old model is increasingly left behind in design decisions.)

That one of its most popular products was an accident should come as no surprise, since Apple doesn’t seem to know or care what its customers want. The last few years have seen it either copying its competitors or compromising usability to skim an extra millimeter or two off devices’ thickness.

Image Credits: TechCrunch

The philosophy of telling people what they should want is a longstanding one at Apple, but one that only works if you have someone who knows those people better than they know themselves. Apple seems to no longer have anyone like that, and so they have continued, like a car with no driver and no destination, to mindlessly chase the horizon.

Of course they’re not the only company doing so. Get big enough and cruise control is the safest option. You can go a long way without touching the wheel. But those of us along for the ride may eventually pipe up.

So here’s me piping up: Apple, I’d really love a MacBook SE. And I think a couple million others would, too.

The iPhone SE appealed to the surprisingly (to Apple) large group of people who disliked the direction iPhone design was headed. They disliked the new larger size, the shift away from TouchID and towards a creepy new authentication technique, the notch, the fragility, the lack of a headphone jack that made their device backwards-compatible out of the box with decades of hardware and software.

A MacBook SE would, in a similar way, appeal to the people who dislike the direction notebook design has progressed. They dislike the uncomfortable, difficult to service keyboard, the removal of the beloved and practical MagSafe, the decision to commit entirely to USB-C ports, the tacky and underutilized Touch Bar.

Image Credits: TechCrunch

These are people who know what they want and have no option to purchase it from a company that used to provide it. There’s a good trade in 2015-era MacBook Pros (pictured above) and Airs because they were the best notebooks Apple ever made.

To be clear, here’s what I imagine an SE would be: a 13-inch notebook with a MagSafe power connection, USB-C ports and a headphone jack on one side, plus one old-school USB-A, HDMI out, and an SD card reader on the other. Oh, and though I suppose it goes without saying, let’s just be clear: The old keyboard, please.

Obviously it’s a bit presumptuous of me to tell one of the world’s largest and most successful companies that they’re doing it wrong and I’ve got the answer. But I don’t mean to say they should abandon all forward momentum and experimentation. I just want them to throw a bone to those of us who don’t want to be their guinea pigs.

And yes, I hear you all out there — get a Pinebook! A ThinkPad! And so on. Listen, I’m not some kind of Mac-only elitist, especially since years ago their products stopped being worth the premium one always paid for them — and that premium has only increased. I build my own Windows PCs and like it. I just happen to prefer the synergy of Apple’s hardware and software in the notebook form factor. And it’s not just the aesthetic, though Windows is certainly ugly.

That’s why it’s so disappointing to me that Apple seems to have forgotten the reasons its laptops became legendary. Because those same reasons were impediments to Apple’s misguided idea of what it might call elegance. Thinness and “simplicity” at all costs — even when the thinness is imperceptible and the simplicity is strictly on the side of the computer itself, not in how the user interacts with it.

Image Credits: TechCrunch

Every owner of an “elegant” new Mac notebook I’ve met — and that’s most of my colleagues at TechCrunch — has to carry around a menagerie of dongles, or borrow them, in order to work effectively across generations and industries. Perhaps a USB-A port looks ugly next to a USB-C one, or the MagSafe connector disrupts the symmetry of the device, but it can’t be worse than the tentacular disaster I see whenever anyone has to do anything on a new Mac laptop but type.

It’s as if Apple made pocket knives, and transitioned over the years from making a Swiss Army knife to a folding knife to a ceramic fixed-blade. Yes, the latter is simpler, more elegant in a certain way. But it sure isn’t any help when you need to open a can or bottle of wine.

Funnily enough, I made the opposite complaint 7 years ago when I felt mobile phones were becoming overstuffed with features. Keep it simple, stupid!

But in a way it was the same problem, just a mirror image. In that case I felt that increasingly bloated Android phones had gone from doing a few things well to doing many things poorly — things no one asked them to do. The real problem isn’t simply too much or too little, but not having the option to choose how much or how little for oneself.

I’m disappointed with Apple because the approach that made their laptops attractive to me in the first place has gone by the wayside. Perhaps that’s just a difference in philosophy, but I feel confident I’m not some kind of extreme outlier. As Apple found when it launched the iPhone SE that there were millions of people who wanted what had come before, I think they will likewise find it so with a MacBook SE. Sure, it’ll eat into the sales of the newer, more “elegant” devices, but it’ll open and maintain a market of people who have held off buying a new device for years because they, like me, have been waiting for Apple to do right by them again.

So please, Apple, grant my wish. Oh, and if you want to guarantee a few extra sales, let me offer one last tip: rainbow logo.


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This Week in Apps: Apple’s antitrust war, TikTok ban, alt app ecosystems


Welcome back to This Week in Apps, the TechCrunch series* that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

* This Week in Apps was previously available only to Extra Crunch subscribers. We’re now making these reports available to all TechCrunch readers.

We missed some Epic news while This Week in Apps was on vacation, but this week the backlash against the App Store continues.

Top Stories

Apple at war with developers 

Fortnite maker Epic may be one of the few companies with pockets deep enough to fund a battle with Apple over its App Store policies. And Google, while it’s at it. But it’s not the only company that would benefit from a change to App Store policy.

Critics call Epic a hypocrite because it’s not fighting console makers who take the same 30% cut of revenues, just app stores. They say that the move is anti-consumer, because it hurts the end user when Epic’s top game is removed. (And it may potentially impact other games made with Epic’s Unreal Engine, as well, when Apple bans Epic’s developer accounts.)

Image Credits: Epic

But, clearly, Epic is looking at these App Store issues from a long-term perspective. Gaming is shifting to mobile and that makes it a market to fight for: 2.7 billion gamers will spend $159.3 billion on games in 2020, and mobile will account for $77.2 billion of that, up 13.3% year-over-year. Mobile gaming is growing faster than PC and consoles, as well. This is also why Apple is swatting down alternative gaming platforms like Facebook Gaming, Microsoft’s xCloud and Google Stadia from running their businesses on its App Store.

At this point, the argument about whether Apple is entitled to its 30% cut or not is becoming secondary to the concern that Apple is now dictating what type of businesses are being allowed to operate on Apple mobile devices, period. The company may eventually be forced to allow developers a way to install apps directly on iOS/iPad OS, with the App Store as an option, not a must. You know, like on Mac.

At the antitrust drama continues, this week Epic announced a #FreeFortnite tournament will be held on August 23, where it will dole out prizes like #FreeFortnite hats and non-Apple hardware, like gaming laptops, Android phones and tablets, and other gaming consoles. News publishers also banded together to complain that they deserve the same sort of sweetheart deal that Apple gave Amazon (a 15% commission from day 1, Congress’ antitrust investigation revealed.)

One has to wonder how Apple would have handled such a problem in years past. Maybe it would have just lowered its commission a bit and moved on — knowing that eventually the growth in mobile gaming would help to make up for the near-term losses. Or that an all-in-one subscription could drive services revenue in other ways.

More Opinions: How Apple’s and Google’s defenses to Fortnite maker Epic Games’ antitrust lawsuits over their app store policies will likely differ (FOSS Patents); Apple might win the battle with Epic Games but it’s losing the war (Pando); App stores, trust and anti-trust (Benedict Evans).

TikTok ban could have big repercussions for Apple 

The Trump administration’s decision to ban TikTok and WeChat due to national security concerns could have further impacts beyond just the loss of the apps themselves. According to The Information, Chinese regulators are closing loopholes that allows the App Store and other services to operate without government licenses and local partners in China. Already, Apple removed thousands of unlicensed mobile games from the App Store in China. As pressure tenses between the U.S. and China, Apple could be required to partner with a local business to run the App Store as a joint venture — a Chinese law it had managed to skirt. This would give China editorial control over the China App Store, and they would likely find a large number of apps were non-compliant. Apple also operates other services in China that could be threatened by a tit-for-tat battle with the U.S. Apple Music, for example, is the only music service owned by a foreign company that operates in China without a Chinese partner.

There’s an alt App Store outside the App Store, powered by TestFlight 

A fascinating report from Protocol dug into the growing ecosystem of non-App Store apps. A Square product designer couldn’t get his minimally functional “lil apps” published on the App Store, so they’re now distributed through TestFlight instead. TestFlight is meant to serve as an app beta testing platform, but it’s turning into an alternative app store platform of sorts. This lets users try out pre-release apps from developers big and small. Some will remain in TestFlight indefinitely, with no need to serve a user base of more than the TestFlight limit of 10,000 users. But not all TestFlight apps are meant to forever live outside the App Store. The buzzy voice-based networking app Clubhouse, for example, has been leveraging the power of its invite-only status for building clout and a core user base before a public release.

There are even online communities popping up to help connect users with unreleased apps. One, called Departures, has several big-name apps listed as well. People also find links through social media to TestFlight builds.

This alt app universe isn’t only about testing. It’s about building things that don’t — for whatever reason — fit the App Store paradigm. Maybe it’s an app that serves a niche user need or one that will only work for a large audience once the app’s core community gets built first. Or maybe it’s more experimental in nature. Maybe it’s evolving as users offer feedback. Maybe the app was built for fun, not for longevity. The App Store limits these different types of ideas by declaring every app has to be ready for the millions of users its ecosystem could potentially deliver.

The alt app community’s existence represents another argument for allowing developers to distribute apps outside the App Store and through their own websites. TestFlight, after all, has limits that a more open ecosystem would not.

Other News

  • Massive Adobe gaffe wiped out Lightroom app users’ photos and presets that weren’t synced to the cloud. There’s no way to get them back. What ever happened to no single point of failure? Redundant backups? Maybe they should have used iCloud sync instead?
  • Did you hear the one about the Michigan college that forced students to use a contact-tracing app that tracks the students’ real-time locations around the clock? When people fear and reject contact-tracing technology designed with privacy in mind, it’s because of incidents like these. Nice work, Albion College.
  • David Dobrik wants to turn his gimmicky disposable camera app into a social network. I’d joke, but maybe the world needs a new Instagram now that Instagram has become Facebook’s junk drawer instead of the photo-focused social network it once was. So sure, why not go try to build whatever Disposable 2.0 is.
  • The Hidden Album toggle switch you’ve always needed has arrived in iOS 14, public beta 5.
  • Pure Sweat Basketball is the latest developer to leverage tech giants’ antitrust investigations for its own legal battle. The company filed a suit against Google over its 30% app store fees on Google Play and wants others to join.
  • Android 11 removes the option to choose your preferred third-party camera app in the camera picker. Google says it’s to prevent geotag hijacking and protect user privacy. Fans says this is a good move that doesn’t impact most of the ways users leverage third-party camera apps. Critics say the reason many buy Android phones is for broader choice — and limiting apps to only opening the default camera impacts their experience.
  • Apple and Google’s coronavirus contact-tracing tech is coming to Pennsylvania. But will anyone use it?
  • Samsung is bringing its promise of at least 3 Android updates to low-end phones too.

Funding and M&A

  • Take-Two Interactive acquires Two Dots game developer, Playdots, for $192 million ($90 million is cash). Playdots spun out of betaworks in 2014. Its games include Dots, Two Dots and Dots & Co.
  • Restaurant rewards booking app Seated raised $30 million and acquired VenueBook to add events.
  • Conversational commerce platform Yalochat raised $15 million Series B led by B Capital Group, co-founded by Facebook’s Eduardo Saverin. Existing investor Sierra Ventures participated. The tech allows businesses to manage sales and customer service over messaging apps, like WhatsApp, Messenger and iMessage.
  • Apple acquired Israel’s Camerai, formerly Tipit, an AR and camera tech specialist. The deal took place quietly sometime between 2018 and 2019 but has only just been discovered.
  • Robinhood raised $200 million more at a $11.2 billion valuation for its mobile investing app. The company has raised capital multiple times this year, including an initial $280 million round at an $8.3 billion valuation, and a later $320 million addition that brought its valuation to $8.6 billion.
  • U.K.-based Hammock raised £1 million in seed funding for its fintech app for landlords and property managers.

Downloads

Google Kormo Jobs (India)

Image Credits: Kormo Jobs/Google

Google’s latest app helps people in India find entry-level jobs. The app first launched Kormo Jobs in Bangladesh in 2018 and expanded it to Indonesia last year. The app highlights the different approach Google is taking in emerging markets, where the company sees an opportunity to build services outside of just an ad business.

Reface

Image Credits: Reface

The AI-powered deep fake app Reface, previously known as Doublicat, makes face-swapping tech easily accessible. Whether that’s a good thing or not remains to be seen. In the meantime, the app is worth a look from a pure tech perspective as to how far we’ve come. You can read a TC profile about Reface here.


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How to Get your Visitor's Location from their IP address


The PayPal website mentions a list of 200 countries where the PayPal service is officially available. There are about 46 countries and regions left where buyers cannot transact using PayPal.

Countries where PayPal is not available

As highlighted in the Google Map above, the regions where PayPal is not available includes Afghanistan, Bangladesh, Cuba, Ghana, Iraq, Iran, North Korea, Lebanon, Liberia, Libya, Pakistan, Palestine, Sudan, Syria, Turkey and Uzbekistan.

If you have a digital goods store that relies exclusively on the PayPal service for processing payments, you could be losing business as customers from countries like Bangladesh, Turkey or Pakistan would not be able to make payments.

As an alternative, you can sign-up for a non-US payment processing service - Paddle and FastSpring are good alternatives - and offer these as payment options on the checkout screen to customers who land on your website from countries where PayPal is unavailable.

Detect the Country of your Website Visitors

I have implemented a similar technique for my Google add-ons website and it seems to work well. The website uses PayPal and Stripe as the default payment handler but if someone lands from a non-supported country, the PayPal buttons are hidden and they are offered an option to checkout with Paddle.

To get the website visitor’s location, I use the ip2c.org service that quickly resolves the visitor’s IP address to their country. If you fetch the ip2c.org/self service, it returns the ISO code of the country of the computer that made the HTTP request.

const getVisitorCountry = () => {
  return new Promise((resolve, reject) => {
    window
      .fetch("https://ip2c.org/self")
      .then((response) => response.text())
      .then((data) => {
        const [status, country] = String(data).split(";");
        if (status !== "1") {
          throw new Error("Unable to fetch country");
        }
        resolve(country);
      })
      .catch(() => {
        resolve("US");
      });
  });
};

getVisitorCountry().then((country) => {
  if (["PK", "BD", "TR", "AF"].indexOf(country) !== -1) {
    // show Paddle Buttons
  } else {
    // show PayPal buttons
  }
});

Some online stores follow the “Purchasing Power Parity” theory (learn more) where non-tangible goods like video courses and software licenses are priced dynamically depending on the country of customers. The above client-side approach for detecting the visitor’s location can be help in such scenarios as well.

Purchasing Power Parity


7 Best Gaming Apps For Android and iOS


If you are looking for the best mobile apps for gaming, then you’re in the right place. We’ll be taking a look at seven of the best that are available for download in either the Google Play or App Store (Apple). Most of them are casino-focused so you can be able to play for fun […]

The post 7 Best Gaming Apps For Android and iOS appeared first on ALL TECH BUZZ.


$100M Market of Social Media Accounts: Facebook and Instagram Accounts for Sale


How to Buy Facebook and other Social Media Accounts in Bulk and make a Profit? We all use Facebook and Instagram on a daily basis. Some people are more or less engaged with social media but you can’t deny the fact that there are 2B users on Facebook and over 1B users on Instagram. Of […]

The post $100M Market of Social Media Accounts: Facebook and Instagram Accounts for Sale appeared first on ALL TECH BUZZ.


Apple contends Epic’s ban was a ‘self-inflicted’ prelude to gaming the App Store


Apple has filed legal documents opposing Epic’s attempt to have itself reinstated in the iOS App Store, after having been kicked out last week for flouting its rules. Apple characterizes the entire thing as a “carefully orchestrated, multi-faceted campaign” aimed at circumventing — perhaps permanently — the 30 percent cut it demands for the privilege of doing business on iOS.

Epic last week slyly introduced a way to make in-app purchases in its popular game Fortnite without going through Apple. This is plainly against the rules, and Apple soon kicked the game, and the company’s other accounts, off the App Store. Obviously having anticipated this, Epic then published a parody of Apple’s famous 1984 ad, filed a lawsuit, and began executing what Apple describes quite accurately as “a carefully orchestrated, multi-faceted campaign.”

In fact, as Apple notes in its challenge, Epic CEO Tim Sweeney emailed ahead of time to let Apple know what his company had planned. From Apple’s filing:

Around 2am on August 13, Mr. Sweeney of Epic wrote to Apple stating its intent to breach Epic’s agreements:
“Epic will no longer adhere to Apple’s payment processing restrictions.”

This was after months of attempts at negotiations in which, according to declarations from Apple’s Phil Schiller, Epic attempted to coax a “side letter” from Apple granting Epic special dispensation. This contradicts claims by Sweeney that Epic never asked for a special deal. From Schiller’s declaration:

Specifically, on June 30, 2020, Epic’s CEO Tim Sweeney wrote my colleagues and me an email asking for a “side letter” from Apple that would create a special deal for only Epic that would fundamentally change the way in which Epic offers apps on Apple’s iOS platform.

In this email, Mr. Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified.

One prong of Epic’s assault was a request for courts to grant a “temporary restraining order,” or TRO, a legal procedure for use in emergencies where a party’s actions are unlawful, a suit to show their illegality is pending and likely to succeed, and those actions should be proactively reversed because they will cause “irreparable harm.”

If Epic’s request were to be successful, Apple would be forced to reinstate Fortnite and allow its in-game store to operate outside of the App Store’s rules. As you might imagine, this would be disastrous for Apple — not only would its rules have been deliberately ignored, but a court would have placed its imprimatur on the idea that those rules may even be illegal. So it is essential that Apple slap down this particular legal challenge quickly and comprehensively.

Apple’s filing challenges the TRO request on several grounds. First, it contends that there is no real “emergency” or “irreparable harm” because the entire situation was concocted and voluntarily initiated by Epic:

Having decided that it would rather enjoy the benefits of the App Store without paying for them, Epic has breached its contracts with Apple, using its own customers and Apple’s users as leverage.

But the “emergency” is entirely of Epic’s own making…it knew full well what would happen and, in so doing, has knowingly and purposefully created the harm to game players and developers it now asks the Court to step in and remedy.

Epic’s complaint that Apple banned its Unreal Engine accounts as well as Fortnite related ones, Apple notes, is not unusual considering the accounts share tax IDs, emails, and so on. It’s the same “user,” for their purposes. Apple also says it gave Epic ample warning and opportunity to correct its actions before a ban took place. (Apple, after all, makes a great deal of money from the app as well.)

Apple also questions the likelihood of Epic’s main lawsuit (independent of the TRO request) succeeding on its merits — namely that Apple is exercising monopoly power in its rent-collecting on the App Store.

[Epic’s] logic would make monopolies of Microsoft, Sony and Nintendo, just to name a few.

Epic’s antitrust theories, like its orchestrated campaign, are a transparent veneer for its effort to co-opt for itself the benefits of the App Store without paying or complying with important requirements that are critical to protect user safety, security,
and privacy.

Lastly Apple notes that there is no benefit to the public interest to providing the TRO — unlike if, for example, Apple’s actions had prevented emergency calls from working or the like, and there was a serious safety concern:

All of that alleged injury for which Epic improperly seeks emergency relief could disappear tomorrow if Epic cured its breach…All of this can happen without any intervention of the Court or expenditure of judicial resources. And Epic would be free to pursue its primary lawsuit.

Although Apple eschews speculating further in its filings, one source close to the matter suggested that it is of paramount importance to that company to avoid the possibility of Epic or anyone else establishing their own independent app stores on iOS. A legal precedent would go a long way towards clearing the way for such a thing, so this is potentially an existential threat for Apple’s long-toothed but extremely profitable business model.

The conflict with Epic is only the latest in a series going back years in which companies challenged Apple’s right to control and profit from what amounts to a totally separate marketplace.

Most recently Microsoft’s xCloud app was denied entry to the App Store because it amounted to a marketplace for games that Apple could not feasibly vet individually. Given this kind of functionality is very much the type of things consumers want these days, the decision was not popular. Other developers, industries, and platforms have challenged Apple on various fronts as well, to the point where the company has promised to create a formal process for challenging its rules.

But of course, even the rule-challenging process is bound by Apple’s rules.

You can read the full Apple filing below:

Epic v. Apple 4:20-cv-05640… by TechCrunch on Scribd


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Apple contends Epic’s ban was a ‘self-inflicted’ prelude to gaming the App Store


Apple has filed legal documents opposing Epic’s attempt to have itself reinstated in the iOS App Store, after having been kicked out last week for flouting its rules. Apple characterizes the entire thing as a “carefully orchestrated, multi-faceted campaign” aimed at circumventing — perhaps permanently — the 30 percent cut it demands for the privilege of doing business on iOS.

Epic last week slyly introduced a way to make in-app purchases in its popular game Fortnite without going through Apple. This is plainly against the rules, and Apple soon kicked the game, and the company’s other accounts, off the App Store. Obviously having anticipated this, Epic then published a parody of Apple’s famous 1984 ad, filed a lawsuit, and began executing what Apple describes quite accurately as “a carefully orchestrated, multi-faceted campaign.”

In fact, as Apple notes in its challenge, Epic CEO Tim Sweeney emailed ahead of time to let Apple know what his company had planned. From Apple’s filing:

Around 2am on August 13, Mr. Sweeney of Epic wrote to Apple stating its intent to breach Epic’s agreements:
“Epic will no longer adhere to Apple’s payment processing restrictions.”

This was after months of attempts at negotiations in which, according to declarations from Apple’s Phil Schiller, Epic attempted to coax a “side letter” from Apple granting Epic special dispensation. This contradicts claims by Sweeney that Epic never asked for a special deal. From Schiller’s declaration:

Specifically, on June 30, 2020, Epic’s CEO Tim Sweeney wrote my colleagues and me an email asking for a “side letter” from Apple that would create a special deal for only Epic that would fundamentally change the way in which Epic offers apps on Apple’s iOS platform.

In this email, Mr. Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified.

One prong of Epic’s assault was a request for courts to grant a “temporary restraining order,” or TRO, a legal procedure for use in emergencies where a party’s actions are unlawful, a suit to show their illegality is pending and likely to succeed, and those actions should be proactively reversed because they will cause “irreparable harm.”

If Epic’s request were to be successful, Apple would be forced to reinstate Fortnite and allow its in-game store to operate outside of the App Store’s rules. As you might imagine, this would be disastrous for Apple — not only would its rules have been deliberately ignored, but a court would have placed its imprimatur on the idea that those rules may even be illegal. So it is essential that Apple slap down this particular legal challenge quickly and comprehensively.

Apple’s filing challenges the TRO request on several grounds. First, it contends that there is no real “emergency” or “irreparable harm” because the entire situation was concocted and voluntarily initiated by Epic:

Having decided that it would rather enjoy the benefits of the App Store without paying for them, Epic has breached its contracts with Apple, using its own customers and Apple’s users as leverage.

But the “emergency” is entirely of Epic’s own making…it knew full well what would happen and, in so doing, has knowingly and purposefully created the harm to game players and developers it now asks the Court to step in and remedy.

Epic’s complaint that Apple banned its Unreal Engine accounts as well as Fortnite related ones, Apple notes, is not unusual considering the accounts share tax IDs, emails, and so on. It’s the same “user,” for their purposes. Apple also says it gave Epic ample warning and opportunity to correct its actions before a ban took place. (Apple, after all, makes a great deal of money from the app as well.)

Apple also questions the likelihood of Epic’s main lawsuit (independent of the TRO request) succeeding on its merits — namely that Apple is exercising monopoly power in its rent-collecting on the App Store.

[Epic’s] logic would make monopolies of Microsoft, Sony and Nintendo, just to name a few.

Epic’s antitrust theories, like its orchestrated campaign, are a transparent veneer for its effort to co-opt for itself the benefits of the App Store without paying or complying with important requirements that are critical to protect user safety, security,
and privacy.

Lastly Apple notes that there is no benefit to the public interest to providing the TRO — unlike if, for example, Apple’s actions had prevented emergency calls from working or the like, and there was a serious safety concern:

All of that alleged injury for which Epic improperly seeks emergency relief could disappear tomorrow if Epic cured its breach…All of this can happen without any intervention of the Court or expenditure of judicial resources. And Epic would be free to pursue its primary lawsuit.

Although Apple eschews speculating further in its filings, one source close to the matter suggested that it is of paramount importance to that company to avoid the possibility of Epic or anyone else establishing their own independent app stores on iOS. A legal precedent would go a long way towards clearing the way for such a thing, so this is potentially an existential threat for Apple’s long-toothed but extremely profitable business model.

The conflict with Epic is only the latest in a series going back years in which companies challenged Apple’s right to control and profit from what amounts to a totally separate marketplace.

Most recently Microsoft’s xCloud app was denied entry to the App Store because it amounted to a marketplace for games that Apple could not feasibly vet individually. Given this kind of functionality is very much the type of things consumers want these days, the decision was not popular. Other developers, industries, and platforms have challenged Apple on various fronts as well, to the point where the company has promised to create a formal process for challenging its rules.

But of course, even the rule-challenging process is bound by Apple’s rules.

You can read the full Apple filing below:

Epic v. Apple 4:20-cv-05640… by TechCrunch on Scribd


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