Associated PressMay 4, 2021 12:10:13 PM IST
The Apple vs. Epic Games event began Monday with cartoon portraits drawn when Apple lawyers and Epic Games filed their case in federal court in Oakland, California, before U.S. District Judge Yvonne Gonzalez Rogers. Apple App Store was alternately described as a pricing monopoly and a world of changing innovation during the preamble to the trial, which may change the technological landscape.
While Apple described its app store as an invaluable service loved by both consumers and developers, Epic Games attacked it as a breakthrough idea that has turned into an instrument of economic exploitation that illegally forecloses competition.
The trial, which is expected to last most of the month, revolves around a 15 to 30 percent commission that Apple charges for orders and purchases of downloaded apps from its store – the only one available on the iPhone, iPad and iPod.
Popular Fortnite video game maker Epic provided evidence that came primarily from Apple’s internal documents in an attempt to prove that the company has built a digital “fenced garden” over the past 13 years as part of a strategy by its late co-founder Steve Jobs. Epic argues that the formula is intended to make it as difficult as possible for consumers to stop buying their products and services.
“The most common flower in a fenced garden is the fly trap of Venus,” said epic lawyer Katherine Forrest. Later, Forrest highlighted an expert report submitted during the experiment that Apple estimates a profit margin of 75 to 78 percent in 2018 and 2019, although Jobs said publicly that the company did not expect to earn large sums from the app when it opened in 2008.
Epic is a company that strives to serve a new generation of developers and customers as openly and solidly as Apple did in the era when they invented personal computers. When we go to court tomorrow, we will fight for these original digital freedoms.
– Tim Sweeney (@TimSweeneyEpic) May 2, 2021
The App Store is now an integral part of the service division, generating nearly $ 17 billion in revenue in the first three months of this year alone.
Apple swept away Epic’s claims as a case full of unfounded claims that a company looking to get rid of the app store premium will increase its own profits while reloading the iPhone ecosystem, which has cost more than $ 100 billion to build.
Apple attorney Karen Dunn referred to Epic’s internal documents outlining a strategy called “Project Liberty,” which opened up Fortnite’s way of intentionally breaching last summer’s app store deal and arranging fees.
“Instead of investing in innovation, Epic is investing in attorneys, public relations and political consultants to seek to reap all the benefits Apple offers without paying,” Dunn said.
According to the cast certificate, Tim Sweeney, CEO of Epic, admitted that the company is trying to increase its current annual revenue of about $ 5.1 billion through its own app store. The Epic store, which is currently banned from the iPhone and other Apple products, charges a 12 percent fee for in-app transactions. This model is not yet profitable, Sweeney said, but he predicted the Epic deal will start making money in the next three or four years.
“Epic is just looking for changes in Apple’s future behavior,” Sweeney testified that the company won’t have to pay higher commissions and still offer Fortnite and other games on the iPhone. Apple ousted Fortnite from its app store last August after Epic tried to use its own payment system.
Sweeney also admitted that Epic chose to blatantly violate its contract with Apple to do so. “I wanted to show the world what I was doing with exactly what the consequences of Apple’s policy were,” he testified.
Apple attorney Richard Doren repeatedly stressed in his cross-examination why Epic didn’t seem to have a problem paying a mandatory 30 percent commission on payments made by Fortnite through Sony’s PlayStation, Microsoft’s Xbox and Nintendo Switch consoles, and other devices. In the same interrogation, Doren also brought up evidence that the three video game consoles have generated about $ 10.5 billion of the $ 13.1 billion in revenue that Fortnite has brought to Epic in the game’s release in 2017.
Apple CEO Tim Cook – a successor chosen by Jobs – also testifies during the trial, but his appearance is only expected to end in the courtroom drama that appears before only a handful of masks can get in every day due to pandemic restrictions.
While the trial involves a great deal of intrigue, which may reveal carefully guarded secrets, the nuts and bolts of the case are likely to depend on more mundane matters, such as market definitions.
Epic argues that the iPhone is so ingrained in society that the device and its ancillary services, such as the app store, have themselves become markets. As part of this argument, Epic argues that Apple is forced to open a walled garden to the garden for alternative options, such as allowing other app stores and payment options in addition to its own.
“There could be a door in the garden,” the epic lawyer Forrest insisted. “It was artificially closed.”
Apple Inc. is looking for a much broader market definition that would cover consoles, computers, and other devices that people use to play video games. To prove this, a Cupertino company in California cited an internal Epic analysis conducted last year that found that 38 percent of Fortnite users playing on mobile devices also trust consoles and other devices.
As part of its case, Apple will also bring out about 2 billion other smartphones running Google’s Android software, allowing for alternative ways to download apps.
The different way Google manages Android apps is one example that Apple believes shows that consumers have other choices, but many of them prefer to keep their digital experiences in a carefully controlled walled garden.
Epic “asks us to lose our competitive advantage,” Apple attorney Dunn said. “Epic wants us to be Android, but we don’t want to be.”
Epic is also suing Google in a separate case accusing the company of illegally hacking apps on its Android devices through its Play Store.