In August 2020, Apple removed Fortnite from the App Store following an update that bypassed the App Store’s in-app purchase system. Since then, Apple and Epic Games have fought in court – and now the factual findings and legal claims Apple has filed in court give us more detail on what to expect from this lawsuit.
Apple’s conclusions were made public on Thursday with the arguments it expects to prove at trial. Again, Apple argues in its legal fillings that the App Store has created new opportunities that didn’t exist before. The company says the App Store has become extremely important to the economy as the app business moves millions of dollars worldwide.
One of the arguments against the allegations of anti-competitive practices is that “the vast majority of apps are free to download,” meaning the company doesn’t earn any commission from them. Apple notes that the App Store competes with other digital platforms such as Google Play, Microsoft Store and PlayStation Store, suggesting that developers can always choose to offer their apps for other devices as well.
The findings indicate that some of these platforms even prohibit players from doing something called ‘cross-wallet play’, leading to in-game purchases not syncing with other devices. Interestingly, the refills also state that “online game streaming services promise even more competitive pressure,” but Apple itself still limits how streaming games work in iOS.
However, an important argument that Apple has reiterated is that, contrary to what Epic says, the App Store is not a leader in the gaming market, and thus cannot be considered a monopoly. “Apple does not have a monopoly or market power in the relevant product market for game-app transactions. And there is no claim to have had such power when the restrictions in question were imposed around the launch of the App Store, ”the company said.
According to Apple, Epic Games hired public relations firms in 2019 to work on a media strategy called “Project Library,” aimed at portraying Apple “as the villain.” In October 2020, Judge Yvonne Rogers was concerned that Epic knew exactly what they were doing with the controversial Fortnite update, so this should come as no surprise.
In its defense, the Cupertino-based company says that the App Store, iOS and all of its software are intellectual property, and there is no obligation to license such property to third parties.
Epic’s monopoly maintenance claim is based on the idea that antitrust laws are preventing Apple from imposing conditions on the licensed use of its intellectual property, and imposing an obligation on Apple to deal with Epic on the terms chosen by Epic – to the detriment from other developers and consumers. But Apple is under no obligation to license its intellectual property, and with a limited exception that does not apply here, companies are free to choose the parties with whom they wish to do business, as well as the prices, terms and conditions of those. deal.
Apple also appeals that Epic Games made more than $ 700 million in revenue from iOS consumers from Fortnite when the game was available on the App Store, and that the company also pays commissions to other platforms on which Fortnite is distributed.
Finally, Apple believes that the 30% commission it charges developers – which is now only 15% for those making less than $ 1 million a year – is a fair deal as this money is used to run the App Store to maintain. This includes reviewing all apps to ensure the security and privacy of iOS devices. For Apple, developers who disagree with the App Store guidelines are free to provide web apps that do not require company approval.
There may be a trial next month
Judge Rogers recently said that the trial in Epic Games’ case against Apple is expected to take place on May 3, but things could change as a result of the pandemic. She also wants the trial to take place in person rather than by videoconference because of its disclosure.
At the same time, Apple CEO Tim Cook, Apple’s SVP of Software Craig Federighi, and other business leaders have been asked to testify at the trial. Last month, Apple told 9to5Mac that its “senior executives look forward to sharing with the court the very positive impact the App Store has on innovation.”
Apple’s legal documents can be found at Public Access to Court Electronic Records (PACER).
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