The big Apple versus Epic Games trial is over – except for the verdict.
On May 24, the two sides had their closing arguments, which took the form of a question and answer session with Judge Yvonne Gonzalez Rogers, which will decide the case (rather than a jury). Gonzalez Rogers was happy to kick out the arguments on both sides and testify witnesses throughout the trial. The last day has been no different, and has provided a nice summary of the previous three weeks of arguments – as well as a preview of what Apple’s antitrust troubles could be in the future.
Apple and its Big Tech partners have been under increasing scrutiny in the United States and abroad, where they have faced numerous lawsuits from private parties such as Epic and the government for their alleged antitrust practices. The Apple-Epic case, in particular, is a preview of what’s to come. If there is a loss of Apple, Congress may decide that companies can resolve things through the judicial system, or in case Apple wins, lawmakers may decide that it is time to step up and introduce or enforce new antitrust regulations.
Epic Games ask a cause Apple on its App Store, after the last company kicked the popular Fortnite game from Epic out of the store last August. Epic has tried to circumvent Apple’s rules that require developers to use its in-app payment system (and pay Apple a 30% commission). Epic says Apple has given itself an unfair monopoly by allowing only apps that follow its rules and use its payment system to run on their devices. Apple says it is only trying to create a safe environment for its users – who choose Apple devices for this reason – and the commission is required to recoup its costs for creating and maintaining the App Store.
After hearing lengthy speeches from both sides in the course of the trial, Monday’s unusual closing arguments of the debate allowed Gonzalez Rogers to highlight the issues and points she found most salient. to make their decision. The definition of “market” was one of the first things discussed, which is not surprising given that it was at the heart of the case. all along.
“From the judge’s questions, it seems she is still struggling with how to define the market in which companies compete, which is an important threshold issue,” Bloomberg’s senior litigation analyst told Recode Intelligence Jennifer Rie.
Epic thinks the market should be the platform on which their games are played. In this definition, users have to go through the App Store and developers have to respect their own rules and their own fees to access these users – no one has a choice here. But if the market is considered to include all gaming platforms, then users can always choose to play Fortnite on a different system, such as an Android, or Xbox, or Playstation. This has been Apple’s argument – that people have multiple platforms to play Fortnite, and so Epic has more ways to sell virtual currency for them. Gonzalez Rogers also wondered if perhaps the market in question here is mobile gaming, in which case systems like Apple and Android (and possibly Nintendo’s Switch) will be included but currently Xbox and Playstation won’t.
Gonzalez Rogers also spent some time last day asking both parties about potential remedies. Epic wants to be able to open its own store on Apple devices so that Apple users can access their games and buy their goods without having to go through the App Store. Apple has said it does not think third-party stores will have the same security (or purity) standards that Apple users have come to trust if they provide. A third-party app store, then, could endanger its users and damage them, developers, the app ecosystem and the Apple brand.
Unfortunately for Epic, Gonzalez Rogers did not seem comfortable with the idea of making a decision that would essentially force a company to change its business model, nor did he see much of a precedent for basing such a decision. He also expressed concern that Epic’s proposed solutions would give it access to Apple customers without paying Apple for that access or for its intellectual property. Once again, these are payments that Apple has incorporated into its App Store business model, though Apple CEO Tim Cook said he knows how much his company makes from them in his testimony last Friday. Epic noted that Apple already does what it offers for Mac users, who aren’t forced to use the App Store. Apple has said that being forced to have separate app stores would make them too similar to Android phones and take away Apple’s competitive advantage over Android – many people choose Apple devices because they are considered more secure than Android.
Gonzalez Rogers wasn’t uniform from Apple, though. Clearly I wasn’t enthusiastic about Apple’s 30 percent commission dropping to the top, which has remained so high since the App Store’s creation with few exceptions: subscriptions after the first year and, since last November, small businesses they are charged a lower commission of 15 percent. Gonzalez Rogers suggested that this move could be the result of Apple trying to scan criticism and lawsuits more than anything else. Apple doesn’t seem to change anything because of competition, he said.
“If there was real competition, that number would move,” Gonzalez Rogers said of the 30 percent take. “It’s not.”
She also said it seemed anti-competitive for Apple to ban apps from using the language to guide users to other sites that can purchase digital goods. It is not the only one to challenge Apple’s anti-sterling policy, but that doesn’t mean it intends to govern in a way that will change it.
“It looks like she would like to ban these rules,” said Rie, from Bloomberg Intelligence. “But this is a remedy she can impose only if she finds that Apple has violated the law. She may be struggling with how to get under federal law, which is friendly to the defendants but may be able to work. California State Laws in contrast “.
Gonzalez Rogers also said that while Epic has presented its case as a fight on behalf of all developers, it is Epic that will earn billions of dollars more if it no longer has to pay App Store fees. Of course, this presupposes that Epic wins the case and the resulting appeals from Apple, which could take years to resolve. Meanwhile, Apple’s App Store practices are also being examined by antitrust regulators in the United States and abroad. The outcome of this case could influence the results of others – or how regulators decide if and when to intervene – and is closely monitored.
Gonzalez Rogers closed by saying it would take “a little” to make his decision – probably several months.
“It was tiring, but a real pleasure,” he said.