By Sarah E. Needleman 

Companies including "Fortnite" maker Epic Games Inc., Spotify Technology SA and Tinder owner Match Group Inc. have forged an alliance to pressure Apple Inc. and other app-store operators to make changes to their marketplace rules.

The Coalition for App Fairness, a nonprofit registered in Washington, D.C., made its public debut Thursday, saying most app stores collect excessive commissions from software developers on users' digital purchases and stifle competition by giving unfair advantages to their own products and services.

The group was registered after Epic sued Apple and Alphabet Inc.'s Google over the removal of "Fortnite" from their respective app stores. A coalition spokeswoman said the group wasn't created in response to Epic's lawsuit but as part of conversations among developers about their app-store experiences and shared desire for change.

As a social-welfare organization, it plans to push for legal and regulatory changes to how companies are allowed to operate app stores, the spokeswoman said. Many social-welfare entities don't have formally registered lobbyists and are set up to rally support from the public for their cause.

"The gatekeeper platforms that operate these app stores must not abuse the control they enjoy and must adhere to oversight to ensure their behaviors promote a competitive market and provide consumers with equitable choice," the self-funded group said in a statement. Other founding members include ProtonMail email service owner Proton Technologies AG, trade group News Media Europe and project-management software maker Basecamp LLC.

Apple declined to comment on the coalition's creation. Separately the company on Thursday said it updated its web pages to better illustrate the benefits the App Store presents to both developers and users. The iPhone maker also released new data showing the App Store's global reach, saying it has more than 28 million members in its developer program world-wide.

A spokesperson for Google didn't respond to a request for comment.

App marketplaces have evolved to become the gateway for how consumers access everything from entertainment to education and now are responsible for billions of dollars of economic activity annually. These app stores have also been a growing source of revenue for companies including Apple and Google, as they collect a cut from sales of paid apps, digital subscriptions and in-app purchases.

The increased importance of the app stores has also generated more scrutiny over how they operate. Apple has recently faced public criticism from a number of large companies, such as Microsoft Corp. and Facebook Inc. A group representing news publishers including the New York Times, the Washington Post and The Wall Street Journal last month sent a letter to Apple saying it wanted to know what it would take for them to get better App Store deal terms. Apple is also being investigated by Congress, the Justice Department, the European Union and the Federal Trade Commission on antitrust grounds.

Apple has defended itself, saying that its app-store commission is in line with what most other app marketplaces charge and that it provides services including user security and privacy.

The battle over app store rules is currently playing out in California federal court. Epic sued Apple as well as Google in August after the tech giants removed "Fortnite" -- one of the world's most popular videogames, with 350 million registered users -- from their app marketplaces. The companies made the move because Epic added an unauthorized payment system to the shooter-survival game that skirted their 30% commission on in-app purchases.

Apple earlier this month countersued Epic, asking a federal judge to award punitive damages and restrict the developer from continuing what it describes as unfair business practices. The next court hearing in the case is scheduled for Sept. 28.

Epic has been spoiling for a fight, releasing on the same day it sued Apple and Google a video parody of Apple's famous "1984" commercial, with the iPhone maker cast as Big Brother. The closely held developer also launched a "Fortnite" tournament with prizes such as hats designed to show animosity toward Apple. And it pushed users to promote the hashtag #FreeFortnite across the internet, in addition to publishing on its website a point entitled "Why We Fight" explaining its mission to players.

The new coalition said it wants app developers to be permitted to use payment systems and other ancillary services of their own choosing, among other demands.

"The basic freedoms of developers are under attack," said Tim Sweeney, chief executive and founder of Epic.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

 

(END) Dow Jones Newswires

September 24, 2020 10:51 ET (14:51 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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