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Daily Crunch: Epic Games escalates legal battle with Apple

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The battle between Epic Games and Apple continues, Facebook faces criticism in India and Pinterest appoints its first Black board member. This is your Daily Crunch for August 17, 2020.
The big story: Epic Games files injunction against Apple
Epic’s legal and PR fight with Apple and its App Store policies seems to be escalating. The Fortnite-maker has filed an injunction in U.S. District Court, saying it was notified by Apple that all of its developer accounts and access to developer tools will be cut off at the end of next week.

“[Apple] told Epic that by August 28, Apple will cut off Epic’s access to all development tools necessary to create software for Apple’s platforms — including for the Unreal Engine Epic offers to third-party developers, which Apple has never claimed violated any Apple policy,” Epic’s lawyers said in their court filing.
Fortnite was removed from Apple’s App Store (and the Google Play Store) last week after Epic introduced direct payments. Apple said at the time that it would “make every effort to work with Epic to resolve these violations.”
The tech giants
Facebook faces heat in India after report on hate speech posts — The debate was sparked by a Wall Street Journal report claiming that Facebook’s top public-policy executive in India had opposed applying the company’s hate-speech rules to a member of Indian Prime Minister Narendra Modi’s party.
Pinterest announces first Black board member — Pinterest has appointed Andrea Wishom, president of real estate company Skywalker Holdings and former Harpo Studios executive, to its board of directors.
Google warns users in Australia free services are at risk if it’s forced to share ad revenue with ‘big media’ — Google has fired a lobbying pot-shot at a looming change to the law in Australia that will force it to share ad revenue with local media businesses.
Startups, funding and venture capital
Deepfake video app Reface is just getting started on shapeshifting selfie culture — Reface (previously Doublicat) is an app that uses AI-powered deepfake technology to let users try on another face/form for size.
DST Global pumps $35 million into Asian e-grocer Weee! — The delightfully named startup delivers groceries, like fresh kimchi and Japanese desserts, to major cities across the U.S.
Amex acquires SoftBank-backed Kabbage after tough 2020 for the SMB lender — Amex’s acquisition will include employees, technology and financial data, but “Kabbage’s pre-existing loan portfolio is not included in the purchase agreement.”
Advice and analysis from Extra Crunch
Founders can raise funding before launching a product — I spoke to Precursor Ventures’ Charles Hudson about how to pitch VCs before you’ve built a real product.
Robinhood raises $200M more at $11.2B valuation as its revenue scales — Robinhood already 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.
How tech can build more resilient supply chains — Coatue’s Caryn Marooney recently made the jump into venture capital.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
SpaceX will attempt to break a rocket reusability record with a launch this week — SpaceX is preparing for yet another launch of Starlink satellites on Tuesday.
US Commerce Department updates rules to further limit Huawei’s chip access — The new restrictions follow a similar decree announced in May.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Daily Crunch: Epic Games escalates legal battle with Apple

Facebook pushes back against Apple’s App Store fees

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Facebook joined the growing ranks of companies publicly complaining about the 30% fee that Apple collects on payments made through its App Store.
Those complaints came midway through a blog post about the social network’s new feature supporting paid online events. Facebook said that to support struggling businesses, it won’t be collecting any fees on those events, at least for the next year, which means that those businesses keep 100% of payments on the web and on Android.
But Facebook said that won’t be the case on iOS, due to App Store fees, and it took aim at Apple with surprisingly direct language (at least, direct for a corporate blog post):

We asked Apple to reduce its 30% App Store tax or allow us to offer Facebook Pay so we could absorb all costs for businesses struggling during COVID-19. Unfortunately, they dismissed both our requests and SMBs will only be paid 70% of their hard-earned revenue. Because this is complicated, as long as Facebook is waiving its fees, we will make all fees clear in our products.

iOS purchase flow on left, Android purchase flow on right. Image Credits: Facebook

To that end, the post includes screenshots of how the events payment flow will look on iOS and Android . On Android, it says, “Facebook doesn’t take a fee from this purchase,” while on iOS, it says, “Apple takes 30% of this purchase.”
Facebook said this language is included in the app update “which we submitted to Apple today for approval” — suggesting that there’s a possibility that the update won’t be approved.
This comes just about 24 hours after Fortnite was removed from the App Store, after Epic Games introduced direct payments into its hit title. It seemed like Epic was intentionally trying to provoke a fight, with the company quickly announcing a lawsuit against Apple and releasing a short in-game video parodying Apple’s famous 1984 commercial, with Apple cast as the villain. (The game publisher is in a similar battle with Google and Android.)
While Apple’s 30% fee has been around for as long as the App Store itself, the issue came to the forefront earlier this summer after Basecamp got into a public feud with the company over its subscription email app Hey, for which the developer tried to circumvent App Store fees by only accepting subscription payments on its website.
Apple’s Phil Schiller told us at the time that the controversy was not prompting the company to reconsider any of its rules, which he said were designed for a better app experience — to avoid situations where “you download the app and it doesn’t work.”

Epic Games launches a campaign (and lawsuit) against Apple

Facebook pushes back against Apple’s App Store fees

Daily Crunch: Apple removes Fortnite from the App Store

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Epic Games takes on Apple, Instagram fixes a security issue and Impossible Foods raises $200 million. This is your Daily Crunch for August 13, 2020.
The big story: Apple removes Fortnite from the App Store
The controversy over Apple’s App Store policies has expanded to include Epic Games and its hit title Fortnite. The company introduced a direct payment option for its in-game currency on mobile, leading Apple to remove the app for violating App Store rules.
“Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services,” Apple said.
Epic, meanwhile, said it’s taking legal action against Apple, and that the game’s removal is “yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.”
The tech giants
Bracing for election day, Facebook rolls out voting resources to US users — The hub will centralize election resources for U.S. users and ideally inoculate at least some of them against the platform’s ongoing misinformation epidemic.
Instagram wasn’t removing photos and direct messages from its servers — A security researcher was awarded a $6,000 bug bounty payout after he found Instagram retained photos and private direct messages on its servers long after he deleted them.
Slack and Atlassian strengthen their partnership with deeper integrations — At the core of these integrations is the ability to get rich unfurls of deep links to Atlassian products in Slack.
Startups, funding and venture capital
Impossible Foods gobbles up another $200 million — Since its launch the plant-based meat company has raised $1.5 billion from investors.
Omaze raises $30 million after expanding beyond celebrity campaigns — The Omaze model has shifted away from celebrity-centric campaigns to include fundraisers offering prizes like an Airstream Caravel or a trip to the Four Seasons resort in Bora Bora.
We’re exploring the future of SaaS at Disrupt this year — We’re bringing Canaan Partners’ Maha Ibrahim, Andreessen Horowitz’s David Ulevitch and Bessemer Venture Partners’ Mary D’Onofrio together to help explain how the landscape has changed.
Advice and analysis from Extra Crunch
How to get what you want in a term sheet — Lior Zorea discusses the reality of term sheets.
Five success factors for behavioral health startups — Courtney Chow and Justin Da Rosa of Battery Ventures argue that behavioral health is particularly suited to benefit from the digitization trends COVID-19 has accelerated.
Minted.com CEO Mariam Naficy shares ‘the biggest surprise about entrepreneurship’ — Naficy got into the weeds with us on topics that founders don’t often discuss.
Everything else
Digital imaging pioneer Russell Kirsch dies at 91 — It’s hard to overstate the impact of his work, which led to the first digitally scanned photo and the creation of what we now think of as pixels.
AMC will offer 15-cent tickets when it reopens 100+ US theaters on August 20 — The theater juggernaut announced plans to reopen more than 100 theaters in the U.S. on August 20.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Daily Crunch: Apple removes Fortnite from the App Store

Four perspectives: Will Apple trim App Store fees?

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The fact that Apple takes a 30% cut of subscriptions purchased via the App Store isn’t news. But since the company threatened to boot email app Hey from the platform last week unless its developers paid the customary tribute, the tech world and lawmakers are giving Apple’s revenue share a harder look.
Although Apple’s Senior Vice President of worldwide marketing Phil Schiller denied the company was making any changes, a new policy will let developers challenge the very rules by which they were rejected from the platform, which suggests that change is in the air.
According to its own numbers, the App Store facilitated more than $500 billion in e-commerce transactions in 2019. For reference, the federal government has given out about $529 billion in loans to U.S. businesses as part of the Paycheck Protection Program.
Given its massive reach, is it time for Apple to change its terms? Will it allow its revenue share to go gently into that good night, or does it have enough resources to keep new legislation at bay and mollify an increasingly vocal community of software developers? To examine these questions, four TechCrunch staffers weighed in:
Devin Coldewey
Lucas Matney
Sarah Perez
Darrell Etherington
Devin Coldewey: The App Store fee structure “seems positively extortionate”
Apple is starting to see that its simplistic and paternalistic approach to cultivating the app economy may be doing more harm than good. That wasn’t always the case: In earlier days it was worth paying Apple simply for the privilege of taking part in its fast-expanding marketplace.
But the digital economy has moved on from the conditions that drove growth before: Novelty at first, then a burgeoning ad market supercharged by social media. The pendulum is swinging back to more traditional modes of payment: one-time and subscription payments for no-nonsense services. Imagine that!
Combined with the emergence of mobile platforms not just as tools for simple consumption and communication but for serious work and productivity, the stakes have risen. People have started asking, what value is Apple really providing in return for the rent it seeks from anyone who wants to use its platform?
Surely Apple is due something for its troubles, but just over a quarter of a company’s revenue? What seemed merely excessive for a 99-cent app that a pair of developers were just happy to sell a few thousand copies of now seems positively extortionate.
Apple is in a position of strength and could continue shaking down the industry, but it is wary of losing partners in the effort to make its platform truly conducive to productivity. The market is larger and more complicated, with cross-platform and cross-device complications of which the App Store and iOS may only be a small part — but demanding an incredibly outsized share.
It will loosen the grip, but there’s no hurry. It would be a costly indignity to be too permissive and have its new rules be gamed and hastily revised. Allowing developers to push back on rules they don’t like gives Apple a lot to work with but no commitment. Big players will get a big voice, no doubt, and the new normal for the App Store will reflect a detente between moneyed interests, not a generous change of heart by Apple.

Four perspectives: Will Apple trim App Store fees?

This Week in Apps: Protests impact app stores, FTC fines app developer, kids’ app trends

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Welcome back to This Week in Apps, the Extra Crunch 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 Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.
This week, we’re taking a look at how the civil unrest and George Floyd protests played out across the app stores. The events led some apps — including private messaging apps, police scanners and alerting apps, and other social communication apps — to surge, and even break records. Google decided to delay the launch of Android 11 beta 1 in light of the recent events.
We’re also keeping up with COVID-19 apps and how the pandemic is changing app usage and consumer behavior. Plus, the FTC fined an app developer over privacy violations in a warning shot for the app industry; Zoom faced criticism for its encryption plans; Apple launched an open-source resource for password managers; and more.
How the George Floyd protests impacted the app stores
Protests drive downloads of police scanners 
Downloads of police scanner apps, tools for private communication and mobile safety apps hit record numbers last weekend in the U.S., amid the nationwide protests over the police killing of George Floyd, as well as the systemic problems of racial prejudice that plague the American justice system. According to data from app store intelligence firm Apptopia, top U.S. police scanner apps were downloaded a combined 213,000 times last weekend, including Friday — a 125% increase from the weekend prior and a record number for this group of apps.
The group of top apps included those with similar, if somewhat generic, titles, such as Scanner Radio – Fire and Police Scanner, Police Scanner, 5-0 Radio Police Scanner, Police Scanner Radio & Fire and Police Scanner +.
Citizen, Signal and others spike during protests
In addition to tracking police movements with scanners, protestors organized and communicated on secure messaging app Signal. Meanwhile, community safety app Citizen, which sends out police alerts, also saw a jump in usage. According to Apptopia, Citizen and Signal both set daily download records, Vox noted earlier this week.

Citizen
Citizen’s app lets users see “incidents,” based on radio communications with 911 dispatchers, police, fire departments and other emergency responders. The app uses high-powered scanners to tune into public radio channels, then digitizes and transcribes the audio, and turns those into incidents placed on the map. But the app is popular because it’s more than a police scanner; it includes a social networking layer where users can react and comment. 
Based on more recent data provided to TechCrunch by Sensor Tower, Citizen was installed around 620,000 times by first-time users in the U.S. during the past week, an increase of about 916% compared to the week prior. First-time installs reached a record 150,000 on June 2, nearly 12x the app’s average of 13,000 daily first-time installs during May. On average, the app was downloaded close to 86,000 times per day, or 6.6x larger than May’s daily average. The app grew to be as high as No. 4 on Tuesday, June 2 on the U.S. App Store, and is now No. 32 Overall on the top free charts.
Signal
Image Credits: Signal
The firm also estimated that Signal had been installed by approximately 135,000 first-time users in the U.S. during the past week across the app stores. This figure represented growth of 165% from the preceding seven days, or about 2.6x that total of approximately 51,000 new installs. Signal averaged about 19,000 installs per day over the past seven days.
For comparison’s sake, Signal was downloaded around 269,000 times in all of May and its average daily number of installs was 9,000. That makes the average for the past week about 2x higher.
Signal is currently ranked at No. 137 among the top free iPhone apps on the U.S. App Store. Earlier, it was ranked at No. 107 on Tuesday, June 2.
This week, Signal also added built-in face blurring for photos, to help better secure the sharing of sensitive information across its network.
Nextdoor and Neighbors by Ring
The civil unrest also impacted neighborhood networking app installs, as communities looked to share information about the protests with one another. Social networking app for neighbors Nextdoor was installed by 185,000 first-time users in the U.S. over the past week, an increase of 26% from 147,000 installs in the week prior. The app also jumped up nearly 50 places in the U.S. App Store rankings, moving from No. 2,014 to No. 156 in the top free iPhone apps chart.
Amazon-owned Neighbors by Ring, where neighbors share alerts, including security camera footage, was installed by 36,000 first-time users in the past week, an increase of 89% from its approximately 19,000 installs the week prior.
Twitter has a record-breaking week as users looked for news of protests and COVID-19

Civil unrest due to the nationwide George Floyd protests drove Twitter to see a record number of new installs this week, according to data from two app store intelligence firms, Apptopia and Sensor Tower. While the firms’ exact findings differed in terms of the total number of new downloads or when records were broken, the firms agreed that Twitter’s app had its largest-ever week, globally.
The app saw at least 677,000 installs at its highest point, Apptopia said. Sensor Tower said it topped 1 million. Twitter also broke a record for daily active users on Twitter in the U.S., when some 40 million people in the U.S. logged into the app on June 3, Apptopia noted. For comparison’s sake, Twitter reported its app had 31 million “monetizable” daily active users (mDAUs) in the U.S. in Q4 2019, which grew to 33 million in Q1 2020.
The spike in installs was attributed to the protests, which were being watched by a global audience, and COVID-19, which continued to spread in worldwide markets.
Apps turn their icons black in support of George Floyd protests 
A small handful of apps did the equivalent of the Instagram black square by turning their icons black this week as a gesture of support toward the protests and civil rights. Participating apps included Reddit, Joss & Main and Shop Avani, for instance. Moves like this can be criticized as being merely performative, but one of the companies involved — Reddit — later followed up with real action. Reddit co-founder Alexis Ohanion on Friday announced he was resigning as a member of the Reddit board, and is now urging them to fill his seat with a black candidate. He also said he would use his future gains from Reddit stock to serve the black community, starting with a $1 million pledge to Colin Kaepernick’s Know Your Rights Camp.
COVID-19 app updates and news

This Week in Apps: Protests impact app stores, FTC fines app developer, kids’ app trends