Last year, Epic Games intentionally violated Apple’s rules by putting its own payment processing system into the iPhone version of Fortnite, bypassing Apple’s fees by 30% and giving players a V-bucks discount. Apple responded by expelling Fortnite from the iOS app store, while Epic launched a lawsuit and public relations campaign declaring the iPhone maker “anti-competitive.”
The two companies have flocked to each other over the past year, to build their cases. (Epic CEO Tim Sweeney exercises his responses On Twitter Weekly.) Now it’s time to personally take a step back: The Epic and Apple Experience has begun.
Here’s what to expect from the experience, and what it’s about in the first place.
Timing, location and details of the trial
When and where is the trial of Epic v Apple?
The trial is continuing now: It began on Monday, May 3 and will take “15, maybe 16, maybe 17 days,” according to US District Court Judge Yvonne Gonzalez Rogers, who said at the pre-trial conference not to expect a quick decision. .
While some civil court work is handled via Zoom these days, Judge Rogers and the U.S. District Court of Northern California decided to conduct this trial in person in Oakland. A limited number of people are permitted into the courtroom, and masks are required. The witnesses wear transparent masks so that their facial expressions can be seen.
What type of Epic v Apple experience?
The Epic v Apple trial is a bench trial, which means no jury. Judge Rogers will decide the outcome.
Can I hear the trial?
Yeah. The Epic v Apple trial is streamed directly to the public over communication lines. You can find a file Details on the US District Court of Northern California website.
Recording is prohibited, although there will be texts for your reference later. if A technical error allows you to speak on the line, Perhaps it would be best not to shout things like, “I’m going to fill you all up for Fortnite mobile back,” which one person did when I started the experiment. (But don’t let me stop you from living your dream.)
The early days of Apple played a profound role in shaping my life and my views on computing. Every apple][+ booted up to the BASIC programming language, and everyone was free to create and share software, and to grow businesses on their own volition. pic.twitter.com/MOkqhHCWuSMay 2, 2021
What the trial is about
Why is Epic suing Apple?
Epic says that what Apple is doing is “anti-competitive” and that it has “monopoly power,” which both mean that Epic thinks Apple has too much control over a market. The term “antitrust” is similar, but refers to efforts to counter monopolies. In the trial, Epic will reference “antitrust laws,” which are laws against anti-competitive behavior.
Software developers who want to release iPhone apps must do so through the iOS App Store, where Apple takes a cut of each sale. iOS apps also have to use Apple’s payment processing for in-app purchases of digital items (Fortnite V-bucks, for example), and Apple takes a cut of that, too.
Epic says that iOS is an unavoidable operating system for mobile devs—most people either have an iPhone or an Android phone—and so it’s not fair that Apple forces everyone to play by its “oppressive” rules. And according to Epic, Apple’s rules for third-party iOS apps aren’t just unfair: they’re anti-competitive and illegal.
Epic wants Apple to let users install apps that aren’t distributed on the App Store, and for it to let developers use their own in-app payment processing, bypassing Apple’s fee. In other words, Epic thinks that iPhones should be more like Windows 10 PCs, where you don’t have to use the Microsoft Store to buy or sell software if you don’t want to.
OK, but what does Epic really want?
More money! For starters, Epic wants to sell V-bucks in Fortnite without having to pay Apple’s 30% fee.
Epic didn’t go through all this trouble just for Fortnite dollars, though. It also sees itself as more than a game or engine developer, and wants to build a “metaverse” where players and creators can buy and sell content and play games across platforms. Getting rid of rules and fees on smartphones would certainly help Epic achieve that.
In the near term, Epic wants to release a version of the Epic Games Store that sells mobile games, but right now it’s against Apple’s rules to release a “store within a store”—that is, an iOS app that sells other iOS apps. And definitely forget using your own payment processing. A ruling in Epic’s favor could change that.
Above: Epic’s PR campaign against Apple was the subject of the first day of the trial.
The newest from the courtroom
What happened at the trial so far?
First day: Epic and Apple set up their site, and Sweeney went to the witness stand first. There, he clarified his vision for Fortnite and the “metaverse” saga was pushing out lately – it’s lately She announced $ 1 billion in financing To this insight, with a large chunk coming from Sony – and of course he said Apple’s fees are unfair. “It got to the point where Apple was making more money selling developer apps in the App Store than the developer was,” Sweeney said.
Apple has questioned why Epic is putting Fortnite on PlayStations – which is very similar to iPhones, in terms of store fees – but is chasing Apple. Is all this a publicity stunt? No, says Sweeney, who has denied that his intentions are not to fight what he considers an unfair “Apple’s Walled Garden”.
the second day: Sweeney ran into a tough question: Can’t the Fortnite iPhone app send users to Safari to buy V-Bucks? Apple does not block purchases made through the web browser. epic He can Doing so, Sweeney had to say, but it’s uncomfortable for users. Judge Rogers didn’t seem too convinced that nuisance was a big problem given that Fortnite players tend to be young.
Epic Arguments and Apple
What does Epic have to prove winning?
To prove that Apple has monopoly power, Epic must first demonstrate that there is a market for Apple with monopoly power – that it doesn’t just complain about the software feature and terms of service it doesn’t like.
To this end, Epic argues that there is a “primary market” for smartphone operating systems, iOS and Android, and “aftermarket” for apps that run on smartphone operating systems. Automobiles and auto parts are an example of the aftermarket and aftermarket: Toyota sells cars, creating an aftermarket market for Toyota parts and Toyota repairs. Epic says the same thing happens here: By selling iPhones, Apple creates “iOS app distribution” and “in-app payment processing for iOS”.
If the court accepts Epic’s definitions for those markets, the company will then have to demonstrate that Apple’s behavior is against competition and that the remedy that Epic suggests is lawful. It won’t be easy. Rebecca Howe Allensworth, a professor at Vanderbilt Law School, said Reuters It is “not a super strong jumpsuit”, and Epic probably won’t win.
What are the arguments against Apple?
After sales? After sales? Apple says it doesn’t dominate the market, it does Competing in one. As far as this case is concerned, Apple considers the App Store a “gaming transaction platform” that competes with other gaming transaction platforms, such as Google Play Store, Steam, PlayStation Store, and Xbox. In this market, Apple has nothing close to monopoly power: it estimates that it has 23.3% to 37.5% market share.
Sure, some people think the App Store revenue cut of 30% is too high, but that’s what the market has settled on. To stay competitive with Google, Microsoft, Valve, and others, Apple has not raised that percentage by more than 30%, and to keep up with this competition, it has recently cut its share of developers who generate less than $ 1 million in revenue annually. Is this what the monopolist does?
This is just one of Apple’s argument lines. It teases Epic’s claims out of every round, brushed aluminum angle it can find. Here is a sample of Apple’s other arguments, reformulated:
- Apple sells the “hardware”, not the mobile operating system. The app store and in-app payment system on iPhones are part of what makes iPhone the iPhone.
- The in-app payment system in particular is not a product. Apple doesn’t market it, and app developers don’t have to use it if they want to sell physical goods, only digital content. Once again, it is part of what iPhones and iPads are.
- IOS and App Store rules and security features protect consumers and developers. (Epic argues that a lot of the trash gets it by reviewing the App Store. Apple says Epic has its own share of security problems.)
- The App Store has made things better for everyone. Clients have access to loads of apps, and developers earn money. Epic itself has grossed over $ 700 million.
- It makes no sense to call an “iOS App Store” a single marketBecause games and other apps are very different from one another. It’s like saying there is one market for Cardiac Surgery and Advil because you can get them in hospitals.
- People are turning away from iPhones and iOS devices, and buying Android devices instead. This is another testament to the competition.
- Microsoft and Sony also run gated gardens. Why can’t iPhones be the same as PlayStations and Xboxes? (Epic says smartphones are unique because they’re general-purpose computing devices that connect to cell towers, and they’re staples that almost everyone has these days.)
- If the court does what Epic wants, it will force Apple to deal with competitors who want to place rival app stores on the iPhone. Violate her right to “Refuse to deal. “
- When the first iPhone was launched, Apple didn’t allow any third-party apps at all. Why should it now allow third-party developers to do what they want?
Documents and revelation
How would you know all this if the trial had just begun?
Unfortunately, I can’t read the thoughts: I read the Epic and Apple documents submitted to the court before the trial. There shouldn’t be many surprises during the proceedings, as the two companies have outlined their arguments in large documents in advance.
There will be Some Surprises though. There will be live testimonials, and the two legal teams will display court evidence every day, which we, the public, then download and look at ourselves. Epic is a private company, so it doesn’t have to announce financial results, and these documents provide some unfiltered first looks at its spending and dealings. This is what we have learned so far:
What does it all mean
What is the expected result?
If I am betting, odds are Apple will win. However, even if Epic loses, you’ll likely see it lost one battle in a war against walled gardens – a longstanding stance for Sweeney and Epic. (Although, Apple claims that Epic only tried to negotiate a side deal for itself before filing a lawsuit, which indicates the company is serving itself more than it claims.)
Epic has definitely proven that it can start fires with the help of its new Fortnite fortune. After loudly announcing that Valve’s 30% revenue cut on Steam is too high (by launching her own competitor’s store and purchasing a bunch of exclusive offers), online stores have started changing their fees. Microsoft recently announced They lowered their stake to 12%, which is the same reduction that the Epic Games Store is taking, for example. Epic isn’t entirely responsible for that move, but its hustle and bustle of competition definitely played a role.
Even with a loss, Epic’s continued pressure against closed operating systems may push the industry in its preferred direction. That’s one thing Sweeney and Valve President Gabi Newell can agree on, at least. Both were critical of Microsoft’s old attempts to control the distribution of Windows applications, especially Newell of Windows 8, and Sweeney from UWP recently. Microsoft backed away from these efforts and started releasing their games on Steam again.
Microsoft has also put together subscribers for a cheap price Xbox Game Pass preview, And it’s been gathering game developers, including Bethesda and Obsidian, so I don’t want to underestimate its power. But Windows computers are definitely not the same as iPhones. If things developed this way, there would be no mods, no Steam vs Epic Games Store wrestling, no DRM-free stores like GOG. From the perspective of a longtime PC gamer, it’s easy to see why Epic is disappointed with Apple’s partial control of smartphone games (and to a lesser degree, Google controls less of the rest).
Our initial conclusion: Apple is violating European Union competition law. AppleMusic competes with other music streaming services. But Apple charges high commission fees on competitors in the App Store and forbids them from reporting alternative subscription options. Consumers are losing out.April 30, 2021
Apple is also handling the heat regardless of the Epic suit. Along with Google, Apple has been the subject of the United States Senate Antitrust Hearing Two weeks ago, a complaint from Spotify currently has the company Defending European App Store Policies. If Epic loses, the change it is trying to achieve can still be accomplished separately by government regulators – although an epic loss here may hinder that effort, according to an official. Talk to Reuters.
What if Epic wins?
If Epic wins, that would be huge. Apple argues that such a ruling would open game console makers to similar provisions, forcing Microsoft and Sony to open Xboxes and PlayStations for all software, allowing anyone to bypass their official stores. This isn’t necessarily Epic’s intent, and I don’t know anyone really expects such a blanket judgment, but the decision will definitely change the business of mobile apps and put an end to the “walled garden” hardware and operating system model in favor of free software distribution.
Whatever the outcome, it will definitely resume.
What happens to Fortnite?
When will Fortnite return to the app store?
I don’t know, but there is a very popular game called “Battle Destruction” that you can play instead. I’m sure it’s as good as Fortnite.