Ahead of the upcoming bench lawsuit against Epic Games, Apple today filed 500 pages of documents with factual findings and legal claims, which basically summarize the information being exchanged between Apple and Epic, present the relevant facts to the judge and advocate for the logical conclusions to be drawn when applying the law to the case.
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Apple is sticking to many of the issues it has raised since the beginning of its dispute with Epic Games. The App Store has remained unchanged in terms of its overall pricing structure since it first debuted in 2008, and while the policies have been updated, the development principles have remained the same.
Apple sees Epic’s challenge as an attack on its 13-year foundational App Store business model. Apple claims that the strict app review guidelines provide consumers with security, privacy and reliability, something the devices are also known for, leading to significant benefits for end users and developers.
The 30 percent fee Apple charges is in line with the fees charged by other app marketplaces and software vendors, as shown by a survey Apple commissioned earlier this year, and Apple recently announced the Small Business program introduced to reduce developer fees to 15 percent. earn less than $ 1 million annually. Apple entered a market where a 30 percent commission was already accepted – it hadn’t set that rate when the “App Store” launched.
In response to claims that the App Store is anti-competitive because no alternative app stores are allowed on the iPhone, Apple points to competition in the markets for device and game transactions. There are other platforms that people can choose from, along with other gaming options, and web apps are supported on iPhone and iPad as game alternatives that Microsoft and Google have already taken advantage of. Apple uses Epic’s main title, Fortnite, to illustrate the point.
Epic’s flagship game, Fortnite, illustrates the competitive landscape. Apple supports cross-platform gaming and cross-platform transactions. The same consumer can make in-app purchases of V-Bucks on their iPhone (via the browser) during a lunch break and on a console at home in the evening. Apple (unlike some of its competitors) allows “cross-wallet” play, so in-game purchases – called V-Bucks in Fortnite – can be made on one device and used on another. In other words, an iOS user can buy V-Bucks on a PC and then use them (before Fortnite was removed) in Fortnite on their iPhone or iPad – with Epic not even owing a penny to Apple.
Epic internal documents related to “Project Liberty” suggest that Epic has been conspiring against Apple and Google since 2008. Epic started with Project Liberty when it saw a drop in its average monthly active users and revenue, and devised a strategy to pay less commission while still taking advantage of the benefits of the “App Store” and the money Apple has invested in the ecosystem.
“Epic Games” hired lawyers and a public relations firm as part of its plan to file a lawsuit against Apple, ultimately freeing up hundreds of thousands of dollars. Epic outlined its plan to get Fortnite approved with hidden alternative payment options, which were then triggered by a hot fix, leading to the current dispute. Epic internal documents describe the legal battle against Apple and Google as “fun!” and considered how to get Apple and Google to reconsider their fees without making “Epic Games” look like “the bad guys.”
This was all part of a pre-planned media strategy called “Project Liberty.” Epic retained Cravath, Swaine & Moore LLP and a PR firm in 2019, and this lawsuit is the culmination of that effort. Epic tries to portray Apple as the villain so it can revive the growing interest in Fortnite. But ironically, when Epic was kicked off the iOS platform, it told players they could keep playing on consoles, PCs, and other devices – demonstrating the existence of competition and the absence of monopoly.
Tim Sweeney, the CEO of Epic Games, has confirmed Project Liberty in previous interviews and said Epic spent months preparing the lawsuit against Apple, although Apple’s lawsuits provide new insight into Epic’s efforts to protect Apple and Google. in an antitrust case.
Apple argues that an extension of antitrust laws is not warranted and that Epic’s product market descriptions are inaccurate due to the other platforms with which the App Store competes. Apple claims that Epic is exaggerating the profitability of the “App Store” and that the arguments that the review process is ineffective are inaccurate. Last year, Apple rejected 150,000 apps, and malware on iOS devices is almost unheard of compared to the large number of malicious apps found on PCs and Android devices.
Apple says Epic’s claim that the market is iOS-only apps will fail and the relief Epic seeks would be detrimental to consumers and developers as it would weaken the App Store. Apple also sees the App Store als as an integrated feature of the iPhone and in-app purchases as an integrated feature of the geenApp Store that does not allow third-party payment options, which is what Epic is aiming for.
In fact, Epic is asking this Court to enforce Apple alternative terms so that Epic can make more money. But Epic’s request would harm other developers and consumers, in addition to imposing unprecedented obligations on Apple to open up its own systems and engineering to third parties.
The trial period between Epic and Apple starts on May 3 and ends in the week of May 24. Both Epic and Apple will call high-profile witnesses, including Apple CEO Tim Cook, Apple Fellow Phil Schiller, Apple Engineering Chief Craig Federighi, and former iOS software chief Scott Forstall, to testify on Apple’s behalf.