The Apple vs. Epic trial is scheduled to be heard within a few weeks and things are obviously heating up. If you need to be brought up to speed, here’s a summary of what's going on in this important case.
Fortnite maker Epic has long taken exception to Apple and Google’s gatekeeping of their respective platforms, claiming that the 30% cut that the App Store and Google Play take is too high. In August 2020, Epic decided that enough was enough and allowed customers to buy credit in-game without using Apple or Google’s payment systems. However, offering a discount of 20% for direct purchases was a violation of Apple and Google’s developer rules.
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Fortnite was subsequently removed from both the App Store and Google Play, and Epic fired up the lawyers. A civil lawsuit was filed, claiming that Apple was in breach of antitrust laws; that case will be heard in May.
With that date approaching, both Apple and Epic have filed their fact findings in separate documents of more than 300 pages each. You can read Apple’s here (opens in new tab) and Epic’s here (opens in new tab).
Epic Games vs. Apple: What Apple will argue
Apple will argue that its 30% cut is quite standard in electronic stores. Some companies publish their cut, for instance Valve, while others such as Sony don't offer clarity on their charges. However, all are around the same sort of rate as Apple's.
The Cupertino tech giant will also claim that it faces competition from other phone manufacturers as well as games consoles. What's more, it will highlight the benefit consumers have enjoyed from the ongoing development of iOS and the App Store and that businesses have also seen a massive boost to profits from app sales.
Epic Games vs. Apple: What Epic will argue
Epic, on the other hand, will argue that Apple has a monopoly in the iOS app distribution market and that its profit margins are exceptionally high. It also seems to be arguing that there is no way to reach Apple’s users without the app store, and those users account for roughly half of the total smartphone market.
It will also claim that developing a web app isn’t a suitable replacement for a downloadable app, citing cache size limitations and direct access to Apple hardware as reasons this isn’t a practical solution for game developers. The documents also suggest that Epic says the size of Apple’s cut has caused price increases for apps, thus disadvantaging consumers.
In October, according to The Verge (opens in new tab), Epic made what some would consider to be a fairly contentious statement that Apple ”has no rights to the fruits of Epic’s labor.” This seems like a preposterous position for a company such as Epic to take, while arguing it should be allowed to take advantage of the fruits of Apple’s labor — namely a very large base of potential customers. Epic also operates an app store itself, where it takes a 12% cut of developer’s profits.
Extrapolating from that argument, one could also arrive at the conclusion that Epic thinks it’s okay for a retailer to stock iPhones but for Apple to send someone to stand in front of the cash register to collect the money directly — thus bypassing the shop, apart from to make use of its store front and customer base.
Epic Games vs. Apple: What happens next?
One thing is for sure: Apple is taking this case incredibly seriously. CNBC reports that top executives, including Tim Cook, are likely to testify. For Apple and potentially every company that operates a platform-specific store, like Sony, Microsoft, etc, this case could have serious implications. On Epic’s side, it appears that Epic founder and CEO Tim Sweeney will also be appearing in person.
Apple recently made changes to the App Store which meant smaller developers earning less that $1 million would be paying a reduced cut of 15% to the firm. Third-party analytics companies suggest 98% of developers would qualify for this reduced rate.
It'll be fascinating to see which way the trial develops when it begins on May 3 in Oakland, California — but either way, one big company is likely to be unhappy with the result.