{"id":258324,"date":"2021-05-25T13:49:00","date_gmt":"2021-05-25T10:49:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/apple-v-epic-what-each-side-proved-throughout-the-historic-trial\/"},"modified":"2021-05-25T13:49:00","modified_gmt":"2021-05-25T10:49:00","slug":"apple-v-epic-what-each-side-proved-throughout-the-historic-trial","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/apple-v-epic-what-each-side-proved-throughout-the-historic-trial\/","title":{"rendered":"#\n  Apple v. Epic: What each side proved throughout the historic trial"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a30202d75cfc\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a30202d75cfc\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/apple-v-epic-what-each-side-proved-throughout-the-historic-trial\/#Jon_Swartz\" >Jon Swartz<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">App<\/a>le v. Epic: What each side proved throughout the historic trial<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000279877\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       As closing arguments wound down Monday in Epic <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">Game<\/a>s Inc.\u2019s landmark antitrust lawsuit vs. Apple Inc., lawyers for each side covered familiar ground, as they have the previous three weeks.<\/p>\n<p> Under stern questioning from federal Judge Yvonne Gonzalez Rogers, who will decide the bench trial, Epic scored points for lifting a curtain on the massive profitability and sway of the App Store as well as flaws in its review process. Meanwhile, Apple<br \/>\n        AAPL,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/202934861\/composite\" class=\"positive\">+1.33%<\/bg-quote><br \/>\n       highlighted the broad competitive landscape of digital ecosystems, its industry-standard commission fee and developers\u2019 overall satisfaction with the App Store.<\/p>\n<div class=\"paywall\">\n       The back-and-forth \u2014 honed after some bare-knuckled lawyering that left executives from both companies badly bruised on the stand \u2014 has frequently boiled down to four issues:<\/p>\n<p><strong>Relevant market. <\/strong>Epic hammered with metronomic precision its argument that Apple and Google parent Alphabet Inc.<br \/>\n        GOOGL,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/202490156\/composite\" class=\"positive\">+2.92%<\/bg-quote><\/p>\n<p>        GOOG,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/205453964\/composite\" class=\"positive\">+2.63%<\/bg-quote><br \/>\n       lord over mobile operating systems with iOS and Android, respectively. <\/p>\n<p>\u201cOur view is there is no economic substitute for getting an app on the phone,\u201d Epic lawyer Gary Bornstein said Monday. \u201cThere are substitutes for the App Store. The substitutes would be direct distribution or alternative app stores. We do not believe that distribution of an app on Android or console is an economic substitute. There is not substitution there to restrain Apple.\u201d (Bornstein acknowledged Google Play is not the same as the App Store, but also restricts in-app payments.)<\/p>\n<p>Bornstein suggested Apple charge developers in a \u201cnon-discriminatory way.\u201d <\/p>\n<p>\u201cThey can charge some developers more than others depending on how they use the platform,\u201d said Bornstein, who tirelessly pushed the notion of iOS as a narrow, monopolistic market. \u201cThey can\u2019t charge in a way that has anticompetitive effects.\u201d<\/p>\n<p>Apple steadfastly maintained through Monday\u2019s closing arguments that Epic is attempting to avoid Apple\u2019s commission fees and put Epic\u2019s own app store on iPhone to enrich its corporate coffers \u2014 to the exclusion of other developers. Apple seized on Epic\u2019s Project Liberty as the cornerstone of a PR plan to grow revenue while posing as a faux liberator of developers.<\/p>\n<p>\u201cWhat they want right now is to put the Epic Game Store on the App Store and they want to do business without [In-App Purchase]. Nothing would be paid to Apple for its IP or use of the platform,\u201d Apple lawyer Richard Doren said Monday.<\/p>\n<p>\u201cThe term \u2018duopoly\u2019 has been thrown around, but Apple faces lots of competition from Samsung, LG, Huawei,\u201d added Apple lawyer Daniel Swanson. \u201cIf you take Epic\u2019s definition, Apple is a monopolist. Xbox is a monopolist. Everyone is a monopolist.\u201d<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>\u201cAnd this ecosystem has existed for 10 years,\u201d Swanson continued. \u201cThis is not a case where there is one device is out there and you are out of luck unless you get a part for that machine.\u201d<\/p>\n<p><strong>App Store security. <\/strong>Epic poked holes in the App Review process with examples of offending apps that slipped through, proving that Apple\u2019s market dominance did not equate to innovation, or privacy and security for consumers.<\/p>\n<p>The tactic fired up Apple, which prides itself as an innovative pioneer and as a champion of user privacy vs. the likes of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Facebook<\/a> Inc.<br \/>\n        FB,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/205064656\/composite\" class=\"positive\">+2.66%<\/bg-quote><br \/>\n       and others.<\/p>\n<p>\u201cWe invest like crazy in [research and development],\u201d Apple CEO Tim Cook testified Friday, noting Apple has spent $100 billion in R&amp;D since the introduction of the iPhone in 2007, and $50 billion over the past three years. According to Apple\u2019s 2020 10-K SEC filing, it was $14.2 billion in 2018, $16.2 billion in 2019, and $18.8 billion in 2020.<\/p>\n<p>At the same time, Apple rejects about 40% of apps submitted to the App Store each year. On Friday, Cook warned the App Store would descend into a \u201ctoxic mess\u201d if Apple ceased the App Review process.<\/p>\n<p>Epic thinks iOS needs to be completely open, breaking up its price-gouging \u201cwalled garden\u201d impact on developers. But an Apple legal strategist late Monday argued this would create a chaotic world of stores within stores that would unwittingly compromise individuals\u2019 data and lead to a free-for-all of app developers in a Wild West-like digital setting.<\/p>\n<p><strong>App Store profitability.<\/strong> Apple talked up the \u201ceconomic miracle\u201d of the App Store, which launched in July 2008 and, through mid-2018, paid out $100 billion in revenue for developers. At a 70%-30% revenue split, total sales were an estimated $142 billion, with $42 billion going to Apple.<\/p>\n<p>This would seem to buttress Epic\u2019s depiction of the App Store as a money-making behemoth that largely fueled the growth of Apple\u2019s Services division into a billion-dollar business. The division reported a record $16.9 billion in sales during the fiscal second quarter, up 27% year-over-year.<\/p>\n<p>The App Store\u2019s operating margins were nearly 80% in fiscal years 2019 and 2018, feeding the Epic narrative that the store was established as a monopoly as early as 2010. <\/p>\n<p>Apple executives Cook and Phil Schiller refused to acknowledge whether the App Store was profitable, alluding to a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of financial statements and insisting that Apple had poured billions of dollars into building, maintaining and improving the App Store.<\/p>\n<p>This comes as little consolation to the likes of Match Group Inc.<br \/>\n        MTCH,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/207178501\/composite\" class=\"positive\">+2.78%<\/bg-quote><span>,<\/span><br \/>\n       which pays $500 million a year in App Store commission fees, as chief legal officer Jared Sine told a Senate antitrust subcommittee in April. <\/p>\n<p>Apple repeatedly pointed out that about 85% of apps on the App Store are free, with no commission charged to them. Second-year subscriptions or video partners are charged 15%.<\/p>\n<p><strong>Developer satisfaction on App Store.<\/strong> Apple contends that, with the exception of a few outspoken developers \u2014 namely, Epic, Microsoft Corp.<br \/>\n        MSFT,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/207732364\/composite\" class=\"positive\">+2.29%<\/bg-quote><span>,<\/span><br \/>\n       Nvidia Corp.<br \/>\n        NVDA,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/200467500\/composite\" class=\"positive\">+4.14%<\/bg-quote><span>,<\/span><br \/>\n       Spotify <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">Technology<\/a><br \/>\n        SPOT,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/207488629\/composite\" class=\"positive\">+2.15%<\/bg-quote><br \/>\n       and Match \u2014 there are hundreds of thousands that are happy with the App Store. There are 1.8 million apps in 27 categories.<\/p>\n<p>Surveys in 2018 and 2017 showed widespread satisfaction in the mid-60-percent range, Apple lawyer Veronica Moye said Monday.<\/p>\n<p>\u201cIt isn\u2019t true that Apple hasn\u2019t reduced price in response to competition,\u201d Moye said. \u201cApple introduced the multi-platform rule in response to game developers so they could sell in-app content without paying Apple. That\u2019s a remarkable price decrease.\u201d<\/p>\n<p>The judge interjected, \u201cDoes that mean we have to wait for people to sue Apple? As a federal court, I don\u2019t want to encourage litigation. How can you say that\u2019s a competitive driver?\u201d<\/p>\n<p>Moye, citing Cook\u2019s testimony, said Apple\u2019s decision was influenced by the pandemic.<\/p>\n<p>Epic\u2019s Bornstein rejoined that developer satisfaction is in the 30% level for search and discovery, and profitability. \u201cTo say, \u2018We\u2019ve done a good job overall\u2019 masks various vectors of competition that could be improved if there were other stores out there,\u201d he said.<\/p>\n<p>Judge Gonzalez Rogers said the complexity and sheer scope of the case \u2014 there are 4,500 pages of testimony \u2014 will \u201ctake me a while\u201d to come to a decision. Her written decision of some 100 to 200 pages is expected in the summer, although it could spill into the fall.<\/p>\n<p>During the three-week trial, Epic has undertaken the Sisyphean task of applying new precedents to major antitrust cases against Microsoft, Eastman Kodak Co.<br \/>\n        KODK,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/205109646\/composite\" class=\"negative\">-3.43%<\/bg-quote><br \/>\n       and American Express Co.<br \/>\n        AXP,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/203805826\/composite\" class=\"positive\">+1.13%<\/bg-quote><br \/>\n       that have not been tested in U.S. courts, antitrust experts said.<\/p>\n<p>The most intriguing example involves a U.S. Supreme Court decision in 1992 that thwarted efforts by Kodak to force owners of its copying machines to use Kodak repair services. Epic\u2019s legal reasoning is that iPhones are a software market that has imposed similarly strict commissions and rules for app developers and consumers.<\/p>\n<p>Although most antitrust experts give Epic a slim chance of winning, they say its longer-term impact goes beyond this case. The maker of \u201cFortnite,\u201d they assert, was successful in stoking outrage among developers and consumers toward Apple, as well as lighting a fire under federal legislators to change antitrust law.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Jon Swartz\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Jon_Swartz\"><\/span>Jon Swartz<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7445-45F4B1724B6B%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Apple v. Epic: What each side proved throughout the historic trial &#8221; As closing arguments wound down Monday in Epic Games Inc.\u2019s landmark antitrust lawsuit vs. Apple Inc., lawyers for each side covered familiar ground, as they have the previous three weeks. Under stern questioning from federal Judge Yvonne Gonzalez Rogers, who will decide&#8230;<\/p>\n","protected":false},"author":1,"featured_media":238647,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-258324","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/258324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=258324"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/258324\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/238647"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=258324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=258324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=258324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}