FTC calls Apple a ‘gatekeeping giant of the mobile gaming industry’

The U.S. Federal Trade Commission (FTC) said Thursday it has settled with mobile ad company Tapjoy over claims it used false advertising offers that promised in-game rewards that weren’t given. Two FTC commissioners also blamed Apple (and follower Google) for helping to create the environment that they claim squeezes mobile gaming industry players and incentivizes them to find other monetization models that may have negative consumer consequences.

Apple Park in Cupertino, California
Apple Park in Cupertino, California

Megan Graham and Lauren Feiner for CNBC:

Democratic Commissioners Rohit Chopra and Rebecca Kelly Slaughter said in a statement they sought to address the conduct of Tapjoy against the backdrop of massive growth of the mobile gaming market.

“It appears that Tapjoy amplified false offers by its business partners, who baited gamers with big rewards only to cheat them when it was time to pay up,” they wrote. “Tapjoy did little to clean up the mess, even when hundreds of thousands of gamers filed complaints. This also harmed developers of mobile games, who were cheated of advertising revenue they were entitled to.”

But the commissioners widened their criticism in their statement, saying Tapjoy was “a minnow next to the gatekeeping giants of the mobile gaming industry, Apple and Google.”

The commissioners added that those “gatekeepers” can harm developers and innovation, and that under “heavy taxation” from those major players, developers have been pushed to “alternative monetization models that rely on surveillance, manipulation, and other harmful practices.”

Both Apple and Google charge up to 30% for sales through their platforms, with a few exceptions.

MacDailyNews Take: That’s either a lie or just very poor reporting, CNBC.

Apple just cut App Store commissions in half to just 15 percent for any developer who earned up to $1 million in proceeds during the previous calendar year. So, in fact, the vast majority of Apple App Store developers do not pay 30% commission fees to Apple, just those large companies that tax App Store resources the most.

Yes, the App Store costs money to run, regardless of what a handful of disingenuous developers would have people believe.


    1. That’s kind of the point. They (FCC) are saying they created an environment that cause game developers to…well…game it’s users.

      I’m not sure who’s to blame but, in game app purchases are the Scrooge of gaming. It’s totally out of control and should be banned.

      The experience I’ve had with in-app purchase gaming has been borderline fraud.

  1. With a minority market share even just on phones, to android, and then there is the Switch and several other handheld mobile gaming companies.

    Government shake down BS. Only place where Apple has true monopoly power is Japan… and might be getting close in Australia. Everywhere else they are a bit small marketshare player.

    This is waste of time noise.

  2. Let’s be clear. Mobile gaming essentially didn’t exist until the iPhone and the App Store. It was Nintendo territory alone, plus a handful of cheap, stand-alone, handheld gaming gadgets.

    Apple created a multi-billion dollar mobile gaming industry by developing and evolving the iPhone/iPad hardware, iOS operating system, developer tools, and the App Store marketplace to market and monetize those games. Apple also hosts the App Store servers, curates content, handles customer service, and provides point-of-sales services to the developers. Before the iPhone/iPad and the App Store, these developer jobs barely existed. Furthermore, when developers made games, they had to handle the end-to-end sales and distribution process, or work through a middleman of some type.

    The inability of some developers to make money now may be due to a number of factors – a lousy game, lots of competition for eyeballs and clicks, or just bad luck. But Apple is not stopping them from being successful.

    The biggest problem with mobile gaming is the reliance on the “freemium” strategy with generally ridiculous in-app purchases. In their greed to get rich, gameplay has been sacrificed for psychological ploys to entice a subset of consumers to drop major money for virtually nothing. The developers have the option of actually creating and selling a game for a fair price to a large volume of people. But they apparently make more money by preying on the young and credulous by selling means of rapid advancement like a “chest of gems” for $99. Remember when you bought an entire computer game for $25 to $50? You can still buy good console games for that price. But the mobile gaming market has been corrupted, and it isn’t Apple’s fault.

  3. Its time the FTC break apple, FB, google up! Now that we control the presidency, house and senate the politicians need to keep their promises and break them up. spin each division off into small manageable companies that can be track and regulated, return the power to the people. No man needs a billion dollars and differently no company needs to have so much unchecked power over the citizens of this nation.

    You promised now you must deliver !!!!

  4. The FCC could punish the other platforms for providing “…monetization models that rely on surveillance, manipulation, and other harmful practices,” while commending and rewarding Apple for refraining.

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