Apple is set to take a stand on Monday in a significant lawsuit that could change the business model of the country’s most valuable company and spur new antitrust laws.
Apple is suing Cary-based Epic Games, the maker of the popular Fortnite video game, for allegedly using competition to control its mobile operating system. Apple ousted Fortnite from the App Store last year after a video game maker offered its customers a payment alternative, bypassing Apple’s mandatory 30 percent commission.
The topic of debate is how Apple allows apps to run on iPhones. The only way to install software on Apple’s mobile operating system is through the company’s App Store. Developers of software for iOS must follow Apple’s rules and use its payment system, which charges a commission for each sale.
The trial will determine whether Apple’s control over iOS’s monopoly և Apple can Apple use that control to force developers to use the App Store և its payment system. One possible result is a very different landscape of smartphones, in which the powerful computers in everyone’s pocket act more like desktop computers, where any kind of software is allowed to exist.
“Frankly, it was a very good timeline for Epic, as everyone around the world is watching this issue,” said Herb Hovenkamp, an anthropology professor at the University of Pennsylvania School of Law. “I’m sure the DOJ is paying close attention to that.”
The outcome of the three-week trial, in which Apple Թ Tim Cook և Epic CEO Tim Sweeney, the well-known CEOs of the two companies, are expected to take their place, could have far-reaching consequences.
If Epic wins, federal judge Yvonne Gonzalez Rogers could force Apple to relinquish control of app distribution, allowing customers to freely install software on iPhones, as they do on desktops.
If Apple wins, the case could become a thunderbolt in Washington, D.C., for a debate over new legislation in the states, where lawmakers scrutinize new rules to curb Apple’s power. The evidence in the lawsuit could be the basis for a lawsuit being investigated by the US Department of Justice, which investigates Apple’s market power and has more freedom of argument than it can present in court.
Apple, Epic and DOJ declined to comment.
Harm to innovation
The case forces Apple to swear allegiance to its business tactics. Apple CEO Tim Cook has taken the company to new heights, adding nearly $ 2 trillion worth of shareholders since he took over a decade ago. During the trial, he will most likely be investigated by Epic lawyers, who aim to portray him as a monopolist who harms innovation և competition.
The lawsuit of “Epos” is a philosophical chasm, which the courts and legislators have yet to solve. Should mobile devices, which are playing an increasingly important role in the lives of people around the world, be as open as traditional computers, or strictly controlled by two companies, Google and Apple?
Epic’s lawyers will argue that Apple’s customers are “closed”, that the high cost of connecting Google to Android, Google’s mobile operating system, underscores Apple’s market power.
While Epic claims that Apple is blocking the transition from iOS to Android, Apple claims that there is nothing wrong with such a tactic, as Apple simply avoids helping its competitors. , like Google, which has Android. Apple claims that customers switch from iPhone to Android at a high enough speed that customers should not be considered closed.
“It’s your phone. “You have to be able to run any program you want on it,” said Evan Greer, director of Fight for the Future. Greer says Apple’s “suffocation” in the App Store hurts competition and innovation, but it is also a human rights issue, as it gives authoritarian governments around the world a “choke” to ban or censor apps.
Apple claims that its strict control over iOS is necessary to keep the system safe and to protect the privacy of its users. Apple says it neutralizes any apps that are allowed in the App Store. And digital billing commissions go to the App Store, which provides tools to help developers create software for iOS.
Epic says Apple is doing a bad job of protecting users, using the argument to justify its alleged monopoly.
What to do in the Epic?
Epic’s first hurdle is convincing the judge that Apple has a monopoly. Only half of all smartphones in the US are iPhones, but Epic claims that Apple’s iOS is a market in itself.
Apple wants Rogers to look at the case through a narrower lens. Apple claims that Fortnite is a video game, and the iPhone is one of the many ways to play the game. Apple’s competition is not only Android. This is the Xbox, PlayStation, Nintendo և elsewhere where Fortnite is available. Apple says it can not be a monopoly when there is so much competition.
Simply having a monopoly is not a crime. The epic must also convince Rogers that Apple is abusing its alleged monopoly. Epic claims that because Apple forces developers of all applications to use both the App Store and Apple’s proprietary payment system, Apple is violating an antitrust provision that prohibits the product or service with the sale of another.
Apple says that reading the Epic law is wrong because Apple’s payment process system is part of one product, iOS. Binding can only occur with two distinct products.
Because developers have to use Apple’s payment process system, they have to pay a commission of up to 30% on all revenue earned in the App Store. Apple recently reduced its commission rate to 15 percent for developers earning less than $ 1 million a year. According to industry analysts, this group of developers accounts for a small part of the total revenue of the App Store.
The Epic trial began when he gave his Fortnite game iOS users an alternative payment option without Apple’s permission. Customers get a discount by using Epic payment processing service. When Apple found out, it pushed Fortnite out of the App Store, and Epic immediately sued.
Epic’s move was pre-planned. The lawsuit was settled out of court, with a public relations campaign that included a “trailer” comparing Apple to Big Brother in George W. Orwell’s 1984 film
Epic is also suing Google, which also removed Fortnite from the Play Store for the same reason that Apple removed it. Google, however, is slightly different from Apple in that it allows Android customers to install software outside of the Play Store. For example, Fortnite can now be installed on Android phones. Epic claims that it is still difficult to install software outside the Play Store.
Google declined to comment.
In court, Rogers sued Epic over the company’s calculated tactics in the theaters և App Store.
But it’s also successful – Epic vs. Apple, led by video game industry leader Sweeney.
Epic helped create the App Software Justice Coalition, a group of about 50 developers, most of them small, who want to persuade lawmakers to weaken Apple’s control over mobile software. Members of that coalition testified before the Senate Judiciary Committee on April 21, giving an audience about the power of app stores.
Legal experts say they are not sure how the judge will affect Epic’s argument. Since 1992, the courts have become more interested in the interpretation of antitrust legislation by large companies, to the extent that some legislators see the need to review the underlying laws.