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Epic Privacy Violations: A Warning to Lawmakers

Over the last two years, an astroturf group started making the rounds in DC and across the state capitals. The innocuously named Coalition for App Fairness’ stated goal was to improve the competitive landscape of the app store ecosystem. In reality, the coalition was propped up by some of the largest international app developers, and its mission was to use government power to kneecap its competition and siphon as much crony control over app stores as possible. While those legislative efforts failed, they have had some limited success in piquing lawmakers’ interests  in many of their anti-free market, protectionist arguments. 

The app store bills they propose would require app store businesses to allow app developers to use their own third-party payment systems. Instead of consumers sharing their personal financial information with a single, trusted, and vetted source, this would blow open the app store ecosystem to unverified payment processors. Some iterations of the bills would also require the practice of app “sideloading.” This means that app stores would be prevented from policing their stores for fraud and cyber threats, making apps less safe and secure for Americans. 

One of the primary backers of this legislation is Epic Games. What’s their stake in all this?

In December of 2022, Epic Games was slapped with a $520 million fine from the Federal Trade Commission for violating the Children’s Online Privacy Protection Act (COPPA). Through their most popular game, Fortnight, Epic Games ignored the children’s privacy law, collected children’s data without parental consent and purposely designed payment features to get kids to spend as much money while playing the game as possible. 

This is why we should be so skeptical of crony capitalist legislation like that proposed by the Coalition for so-called “App Fairness.” These app store bills were never supposed to increase competition or improve innovation. Instead, they were a backdoor attempt by some of the largest and wealthiest app developers on the planet to create privacy and security carveouts, supported by the government, that will make them richer.  

If these false app store reforms had been enacted prior to Epic’s colossal privacy violation coming to light, it’s entirely possible that the company could have continued to get away with it. It would be easier for them to access children’s data, take advantage of smaller developers, belittle parents and take money from their children. 

Lawmakers should take note. The arguments pushed in favor of these bills targeting app stores were already suspect. Full of government handouts and disdain for market competition, it was a wonder anyone found it persuasive. That the bills would directly aid a bad actor which is harvesting data and cash from children should be a clear dealbreaker.