Even if Epic doesn’t score on all counts in this lawsuit, it will most likely succeed in shaking up the status quo for Apple.
- The dispute dates back to August 2020 when Epic Games filed an antitrust lawsuit to challenge what it alleges as Apple’s App Store monopoly.
- Among the objections raised by the video game developer, the “exorbitant” commission of 30 percent for in-app purchases remained a key issue.
- As this trial has progressed, the odds of Epic making a dent in Apple’s fortunes have swung from being seen as negligible to a formidable 55 percent now.
- Apple CEO Tim Cook’s testimony has emerged as the key highlight of this case, with many even viewing it as a turning point.
The Epic Games versus Apple antitrust trial has concluded its third week, and final arguments on this long-drawn-out battle have been reserved for Monday. A discord over in-app payments on Apple’s App Store that began in August last year has snowballed into something much bigger, inviting attention and scrutiny from several players in the tech world as well as international regulatory bodies and media.
While many believe that winning the lawsuit would be an uphill battle for Epic Games, the court victory seems to be only one part of the battle. In essence, the video game developer is striving to achieve a bigger goal – draw attention to and change how much Apple earns via its App Store.
Apple Vs Epic Games – How It All Began
Epic Games responded with an antitrust lawsuit to challenge the App Store monopoly. Epic took an offensive stance rather than defending its decision to work around the iPhone maker’s App Store policies by claiming that Apple was a “behemoth seeking to control markets, block competition, and stifle innovation.” Epic Games’ suit also alleged that given Apple’s reach and size, its monopolist policies had far exceeded anything seen in the tech industry’s history.
The Epic lawsuit focused more on fighting Apple App Store guidelines for developers rather than arguing whether or not – if so, then why – it had violated those guidelines. Among the objections raised by the video game developer, the “exorbitant” commission of 30 percent for in-app purchases remained a key issue.You will find more infographics at Statista
After months of offensive and counter-offensive, slapping of lawsuits by both parties, Epic rallying to garner support from other like-minded developers who shared its view of Apple’s ‘monopolistic policies’, the trial began in the court of District Judge Yvonne Gonzalez Rogers in the Northern District of California on May 3.
Since the beginning of the trial, attorneys representing Epic have maintained a consistent line of attack, targeting the digital services offered by the Cupertino tech giant, which remain a key focus of Apple CEO Tim Cook’s growth strategy. During hearings, App Store margins and defining the market remained focal issues.
On the issue of App Store margins, Epic argued that Apple operates with 78 percent margins, once again reiterating its stance on monopolistic stranglehold since developers have no alternative but to go through the App Store in order to reach the market of iPhone users.
Though Apple disagreed with the claim, it did not refute it with figures of its own. Epic used this as an opportunity to drive home the point that Apple’s lack of transparency on margin figures for App Store was evidence enough of the company’s anti-competitive optics.
Another key issue was defining the market, which could be a decisive factor in the case. In this regard, Tim Cook pointed out that while access to the iPhone was controlled through the App Store, users have the option to switch over to alternative ecosystems. The iPhone maker also argued that in the case of Epic the claim of hindered access was hardly legitimate as it catered to a wider market with its products available not just on smartphones but also gaming devices such as Xbox and PlayStation as well as PCs. An argument bolstered by court documents revealing that the App Store made up for merely 7 percent of Fortnite’s revenues.
Tim Cook’s Testimony
Tim Cook’s testimony has emerged as the key highlight of this case, with many even viewing it as a turning point. Cook was seen trying to sidestep questions about profits margins, among other issues. Epic’s lawyer grilled the Apple CEO on the App Store terms and conditions for developers, and Cook remained evasive in his responses, frequently reiterating that he was unaware of the specifics.
He also failed to offer clarity on why Google pays Apple an annual amount of nearly $10 billion to be featured as the default search engine on iPhones. Cook was also grilled about Apple’s decision to cut commissions from 30 to 15 percent for certain apps and purchases after Epic’s lawsuit was filed.
At the end of the last hearing, Judge Gonzalez Rogers tried to get both parties on board for finding a middle ground but neither side seemed ready to budge from their stance. As things stand now, Epic may carry the day if it can convince the court that Apple devices are a monopolistic market unto themselves. However, that remains a tall order.
As this trial has progressed, the odds of Epic making a dent in Apple’s fortunes have swung from being seen as negligible to a formidable 55 percent now. Even if Epic doesn’t score on all counts in this lawsuit, it will most likely succeed in shaking up the status quo for Apple, which would have a direct bearing on the future of app developers and Apple’s profits.