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Epic Apple Fight Almost Over But Not Before Some Mud Slinging

The Apple Vs Epic trial is all but over however the ruling could take weeks if not months.

Overnight Epic Games made its final pitch to Federal Court Judge Yvonne Gonzalez Rogers to curb the market power of the 2 million app, Apple App Store which Apple wants left as is so that they can rake in billions.

Epic sued Apple in August, after the iPhone-maker removed Fortnite from its App Store because the gaming company created a workaround so it wouldn’t have to continue paying a 30% fee on customers’ in-app purchases.

The case has drawn interest from the Australian Competition & Consumer Commission with everyone from Microsoft to Google and Amazon to Nvidia weighing into the fight.

In November, Apple sliced its revenue cut from 30% to 15% for developers who generate up to $1 million in revenue.

A ruling in Epic’s favour would loosen Apple’s grip on its store and could upend the way millions of developers distribute apps to handheld device users the world over. It could also potentially spur action from the U.S. Justice Department and other global regulators examining the extent of Apple’s power as a gatekeeper to the digital economy.

Gonzalez Rogers heard closing arguments Monday from attorneys for the creator of the blockbuster game Fortnite and the iPhone maker in a case that threatens to upend the how the $142 billion world of mobile applications is managed with the Australian Competition & Consumer Commission seeking an active role in the case.

After scoping out the market in which Epic claims Apple wields power, lawyers called for tight controls of how Apple operates.

The judge who is deciding the case without a jury, said she hopes to deliver a ruling as soon as possible but she didn’t specify a date.

After aggressively questioning Apple Chief Executive Officer Tim Cook last week in his first time testifying as a witness, the judge overnight asked how Apple’s practice of taking a 30% commission from developers for in-app purchases made through its App Store has remained unchanged since the store opened in 2008.

“If there was real competition, that number would move and it hasn’t,” Gonzalez Rogers said. “If the relevant market here includes developer-side competition, so far there doesn’t seem to be anything that is in the market itself that is pressuring Apple to compete for developers.”

Apple’s lawyer Daniel Swanson said that Apple has improved its device quality even as its developer commission rate stayed the same.

Games played on Apple’s iOS operating system can “hold their own” with some of the best games on consoles and PCs, Swanson said. “That is quality competition.”

Bloomberg reported that a lot of time was spent by attorneys wrangling over an issue over which they have disagreed in the legal fight from the get-go: the definition of the market in which Apple is showing the alleged antitrust behaviour.

Epic has argued that Apple exercises control over market for mobile-app distribution on iPads and iPhones to juice profits from commissions on payments made for virtual goods inside apps. In contrast, Apple contends that it competes in a market for digital game transactions that occur on numerous devices including video game consoles.

“There is no substitute” for accessing apps, including the Fortnite app, on iOS other than the App Store, said Epic’s lawyer Gary Bornstein. Getting the same app on an Android device or on video game consoles doesn’t amount to a substitute for Apple allowing alternative app stores on iOS, he said.

Apple’s lawyer Richard Doren argued that if Epic wins, it would ruin the App Store the company has painstakingly built by making it a “poor imitation” of Google’s Android that is open to alternative app stores.

Gonzalez Rogers pointed out that Epic has also filed a similar suit against Google over its Google Play app store policies. Since Epic has “sued Google on the exact model,” how would directing Apple to allow other app stores resolve the issue, she asked.

“We are not arguing that iOS should be exactly like Android,” Bornstein said. Epic’s suit against Google may broadly cover similar claims but specifically targets separate policies, he said.

The judge clarified that she was just kidding when she told the companies Friday she hoped to rule by Aug. 13. She explained Monday that date is exactly a year from when the legal battle started.

 

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