Epic against Apple’s lawsuit over the latter monopoly practice begins next month, and today the main arguments of each company were published, after being trimmed somewhat at the discretion of the court. With the basic facts agreed upon, the two companies will fight over what they mean, and their CEOs will probably take (virtual) ability to do so.
As we have covered in previous months, the main content of Epic’s argument is that Apple’s hold over the app market and the 30 percent standard fee constitute anti-competitive behavior that must be regulated by the Antitrust Act. It rebelled against what it describes as an illegal practice by slipping its own currency store in the game to the popular game Fortnite, and bypassing Apple̵
Apple denies the allegation of a monopoly and points out that it faces enormous competition across the market, just not in its own App Store. And when it comes to the size of the fees – well, maybe it’s a case that can withstand some adjustment (the company dropped its withdrawal to 15% for any developer’s first million after criticism through 2020), but that hardly corresponds to illegality.
For its part, Apple claims that the whole antitrust claim and associated dust parking is little more than a PR stunt, and it has something in the way of receipts.
After all, Epic had a whole PR strategy ready to go when it filed the lawsuit, and the archives describe “Project Liberty”, a long-term program in the company to, in Apple’s opinion, support weak revenue from Fortnite. Epic appears to have paid a PR company around $ 300,000 to advise on the “two-phase communications plan,” which involves a multi-company lawsuit against Apple and Google via the “Coalition for App Fairness.”
Project Liberty makes up a lot in Apple’s archiving, and describes how the company and Sweeney planned to “drag Google into a legal battle over antitrust”, (and presumably Apple) according to internal emails, by being banned by the companies’ app stores to bypass their payment systems. Epic only mentions Project Liberty in one paragraph and explained that it kept the program secret because “Epic could not have revealed it without having Apple reject version 13.40 of Fortnite, ”Namely the one with the built-in payment system built-in. It’s not much of a defense.
Whether Apple’s fees are too high, and whether Epic does this to extend Fortnite’s profitable days, the case itself will be decided on the basis of antitrust law and doctrine, and on this front, things do not look particularly terrible for Apple.
Although the legal arguments and summaries are actually hundreds of pages from both sides, it is summed up quite well in the very first sentence of Epic’s archiving: “This case is about Apple’s actions to monopolize two markets within the iOS ecosystem. ”
To be specific, it is about whether Apple can be said to be a monopolist over an ecosystem they created and managed from the very beginning, and one that is demonstrably attacked on all sides by competitors in the digital distribution and gaming area. This is a new application of the Antitrust Act and one that will carry a heavy burden of proof for Epic – and that a (admittedly amateurish) review of the arguments does not suggest that there is a great chance of success.
But the casual reporter’s opinion is not much in the accounting of things; there must be a trial period and one is scheduled to take place next month. There is much to cover, as Epic’s presentation of the arguments must be as careful as Apple’s disassembly of them. To that end, we can expect direct testimony from, among others, Apple’s CEO Tim Cook, Epic CEO Tim Sweeney, Apple’s former marketing manager and famous face Phil Schiller.
The timing and nature of this testimony or interrogation will not be known until later, but it is likely that there will be some interesting interactions worth hearing about. The trial is scheduled to begin on May 3 and last for about 3 weeks.
In particular, there are a handful of other lawsuits hovering over this, such as Apple’s opposition to Epic claiming breach of contract. Many of these will depend entirely on the outcome of the main case – for example, if Apple’s terms were found to be illegal, there was no contract to break, or if not, Epic admitted quite a bit to have broken the rules, so the case is practically over already.
You can read the complete “suggested facts facts” documents from each party at the invaluable RECAP; the case number is 4: 20-cv-05640.