Epic Games CEO Tim Sweeney is calling Apple and Google “gangster-style businesses” that allegedly follow unlawful practices following his remarks at a Y Combinator event on Wednesday. 

He claims both companies use tactics that hurt developers and discourage users from installing alternative stores like Epic Games. Sweeney’s statements come as part of a long-running dispute that has placed Epic Games at the center of a larger fight against alleged illegal practices in the tech industry.

Sweeney pointed to Apple and Google’s history of fines and legal challenges, saying they are willing to keep engaging in unlawful behavior if it means they earn more money than any penalty might cost.

He told the audience, “They’re run, in many ways, as gangster-style businesses that will do anything they think they can get away with. If they think that the fine is going to be cheaper than the lost revenue from an illegal practice, they always continue the illegal practice and pay the fine.”

Epic Games is known for its popular title Fortnite, but it also makes Unreal Engine and provides tools for other developers. The company sued Apple and Google several years ago, accusing them of monopolistic practices in their app stores. 

Although Epic won the case against Google, it lost against Apple. Even so, the court ordered Apple to change its App Store rules to allow developers to link to other purchasing mechanisms.

Epic, however, is still at odds with Apple, arguing that Apple’s compliance is too limited because developers only see a small 3% commission reduction, making it unattractive to switch away from Apple’s payment methods.

Sweeney blasted these actions as “malicious compliance” and believes the lack of any meaningful enforcement allows Apple and Google to keep hurting competition. He said, “Crime pays for big tech companies,” adding that it will continue unless authorities become more rigorous in their oversight.

The impact of these policies on Epic’s business is significant. On Android, users see a warning message when they try to install the Epic Games Store outside the Play Store. 

Epic Games CEO says the scare screen turns down users

According to Sweeney, the “scare screen” causes between 50% and 60% of users to give up, which undercuts Epic’s ability to reach new customers. In Europe, where the Epic Games Store is permitted on iOS under new regulations, a similar warning appears, and the drop-off rates match those seen on Android.

Sweeney described these warnings as “textbook self-preferencing,” a term that implies Google and Apple are favoring their own channels by making alternatives seem risky. He argues it is a powerful way to deter users from stepping outside the official app stores.

He also highlighted the fees involved in distributing apps through the Epic Games Store on iOS. Instead of the usual 30% cut, Apple subtracts a “core technology fee” of 50 cents per install each year for apps with over 1 million downloads.

Sweeney says that free-to-play developers stand to lose too much revenue under this structure. “Unless your app is enormously high grossing per user, any free-to-play game is largely dissuaded from that,” he explained. “Apple would bankrupt them if they did that.”

Still, Epic has managed to bring some back-catalog games to its iOS store. Sweeney remains hopeful that opening the store to developer submissions later this year will grow the catalog on both iOS and Android. But he believes Apple and Google’s influence will remain a barrier until there is more forceful competition or tighter enforcement of existing rules.

Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More