{"id":32606,"date":"2021-05-25T15:55:54","date_gmt":"2021-05-25T19:55:54","guid":{"rendered":"https:\/\/mjtsai.com\/blog\/?p=32606"},"modified":"2021-06-18T07:02:52","modified_gmt":"2021-06-18T11:02:52","slug":"epic-v-apple-day-16","status":"publish","type":"post","link":"https:\/\/mjtsai.com\/blog\/2021\/05\/25\/epic-v-apple-day-16\/","title":{"rendered":"Epic v. Apple, Day 16"},"content":{"rendered":"

Nick Statt<\/a> (tweet<\/a>):<\/p>\n

Apple hoped to establish the market as the entire gaming market, in which the App Store is just one complete digital marketplace among many and in which consumers substitute purchases on one platform for another. In that context, it’s clear Apple doesn’t have a monopoly.<\/p>

Epic lawyer Gary Bornstein pushed for more. Epic wants the market to be defined as the iOS app distribution market, over which it has argued Apple has an illegal monopoly that results in higher prices and reduced competition. As evidence, Bornstein said Apple feels no pressure to lower its prices, that there’s a lack of innovation in the store, and that in the event of a price increase, it’s unlikely developers would leave the iOS platform.<\/p>

[…]<\/p>

In one notable exchange, Gonzalez Rogers rejected the notion that anti-steering rules are in place to improve transaction “efficiency,” as Moye tried arguing. “[Tim] Cook conceded that it’s a method of being compensated for intellectual property,” the judge said. It was a strong example of Cook’s frank Friday testimony undermining the Apple legal team’s more sugar coated justifications behind its iOS restrictions.<\/p>

[…]<\/p>

Judge Gonzalez Rogers ended the session after a little more than three hours of courtroom debate, saying she anticipates a ruling to take a considerable amount of time but declining to give a firm date.<\/p><\/blockquote>\n\n

Elizabeth Lopatto<\/a> (tweet<\/a>, Adi Robertson<\/a>, Leah Nylen<\/a>):<\/p>\n

Throughout the trial, Epic’s general strategy appears to have been to stuff the record as full of evidence as possible — just in case it’s needed on the inevitable appeal. To do that, Epic sacrificed telling a coherent story.<\/p>

Apple, on the other hand, was on brand. It had a clear story and it spent the entire trial hammering it home: Apple controls the App Store because the alternative would be a security and privacy nightmare.<\/p>

[…]<\/p>

Judge Yvonne Gonzalez Rogers pointed out that it was possible Epic’s proposed remedy — allowing other app stores onto the iPhone and allowing side-loading of apps — destroyed<\/em> consumer choice. After all, she suggested, people are generally aware of Apple’s tightly controlled ecosystem and are choosing it on purpose. Besides, she noted, the cost of apps in Google’s store was roughly the same.<\/p>

Well, Epic’s Bornstein said, that’s because it’s a duopoly.<\/p><\/blockquote>\n\n

Juli Clover<\/a>:<\/p>\n

At the conclusion of the trial, Judge Rogers said that she expects that her verdict will take quite some time, but she did not provide a concrete date. It could be several weeks before we hear about the Epic Games v. Apple trial again, and it’s quite likely that any decision will be appealed, so this is a lawsuit that could carry on for months to come.<\/p><\/blockquote>\n\n

Nick Statt<\/a>:<\/p>\n

\n

Both sides are now trying to figure out what the hell Apple actually means when it says you can’t tell iOS users about cheaper in-app purchase options outside the App Store using a sign-up email.<\/p>\n

Everyone seems to be confused because there are different rules for different apps.<\/p>\n

[…]<\/p>\n

There is now a debate over whether anyone has complained about anti-steering.<\/p>\n

It’s literally the entire focus of the EU’s antitrust investigation into Apple, instigated by Spotify… which doesn’t let you sign up for Spotify Premium on iOS anymore.<\/p><\/blockquote>\n\n

Adi Robertson<\/a>:<\/p>\n

Judge: “If the relevant market here includes developer-side competition, so far there doesn’t seem to be anything that is in the market itself that is pressuring Apple to compete for developers.”<\/p>\n

[…]<\/p>\n

Swanson says the commissions now are de facto lower than they were under physical distribution. “It’s not a monopoly price. It’s a competitive price.”<\/p><\/blockquote>\n\n

Adi Robertson<\/a>:<\/p>\n

\n

Bornstein describes Apple’s argument as “we’re doing a really good job, your honor, please let us continue to do a really good job,” and “we’re the benevolent overlord of this ecosystem.” But “that is not a defense under the antitrust laws.\"<\/p>\n<\/blockquote>\n\n

Colin Cornaby<\/a>:<\/p>\n

The Judge had a QA with Apple and Epic’s lawyers today, and her questions and comments seem favorable to Apple.<\/p>

However, Apple made a very worrisome argument that using it’s APIs are akin to licensing their intellectual property, and developers owe them a cut simply for that use<\/p>

It’s a very strange argument that everyone should be kissing Apple’s feet for releasing Metal instead of… I dunno… QuickDraw 3D? And that because of that they should get a 30% cut.<\/p><\/blockquote>\n\n

Steve Troughton-Smith<\/a>:<\/p>\n

\n

There’s a lot of fact-twisting, misdirection and dishonest arguments coming from Apple’s lawyers in closing in the Epic case, which contrasts starkly with Epic’s factual points. I feel like if Apple were on the right side of history here, they wouldn’t have to lie & manipulate<\/p>\n<\/blockquote>\n\n

David Heinemeier Hansson<\/a>:<\/p>\n

But the iPhone doesn’t let you execute whatever program you see fit to run. It only executes programs that Apple has approved, and if they don’t approve it, you can’t run it. That might sound obvious, but it’s a startling reversal of computing history.<\/p>

[…]<\/p>

The only loophole here in the web. Apple hasn’t (yet?) taken to censor what parts of the web you can access using your pocket computer, but they could. Tomorrow. Because one of the categories that Apple doesn’t allow any competition within is browsers!!<\/p>

[…]<\/p>

Can you imagine trying to submit an app for a new system called the web today? If the web hadn’t existed prior to the iPhone, there’s no way in hell Apple would ever have approved a browser with unfettered, unfiltered access today. No way.<\/p>

[…]<\/p>

It’s a computer. It’s my computer. Whether it fits in my pocket or sits on my desk just doesn’t matter.<\/p><\/blockquote>\n\n

Ben Thompson<\/a> (Hacker News<\/a>):<\/p>\n

I think there is a strong chance that Apple prevails, for reasons I’ll explain below, but that doesn’t mean the trial has been waste of time: it has cast into stark relief the different arguments that pertain to the App Store, and not all of them have to do with the law.<\/p>

[…]<\/p>

The most important case for Apple’s defense, though, is 2004’s Verizon v. Trinko<\/a><\/em>, which established and\/or reiterated several important precedents that support Apple’s position, even if Apple were held to be a monopolist<\/em>.<\/p>

[…]<\/p>

This does, I would note, put Apple’s antitrust conviction in the ebooks case in considerably more dubious light: Apple was trying to shift the industry away from a wholesale model to an agency model, which is the exact sort of model that doesn’t work with the App Store. That the company was offering its own alternative — iBooks — makes it worse, just as the introduction of Apple Music made the application of App Store rules to Spotify particularly problematic.<\/p>

What is also worth acknowledging, though, are the kinds of businesses that never get off the ground.<\/p>

[…]<\/p>

What the company no longer admits, though, is that developers did a lot for Apple too. They made the iPhone far more powerful and useful than Apple ever would have on its own, they pushed the limits on performance so that customers had reasons to upgrade, and even when Android came along iPhone developers never abandoned the platform. Sure, they had good economic reasons for their actions, but that’s the point: Apple had good economic reasons for building out all of those APIs and developer tools as well.<\/p><\/blockquote>\n\n

Nick Heer<\/a>:<\/p>\n

I am not sure if I wrote this publicly, but in discussions with friends, I have long maintained that Epic is a bad plaintiff in this case. It is hard to sympathize with a developer that is suing over a single-digit percentage of its revenues because of a contract dispute that it initiated in bad faith, and where it is clear that it hopes to develop its own platform that will have similarly stringent rules. But this trial has surely put a big dent in Apple’s reputation. If you thought before that Apple was an overly controlling corporate giant that squeezed money at every possible opportunity, its executives’ testimony reinforced that. Even if you are comfortable with Apple’s business case, Tim Cook’s cold remarks must have shaken some of that confidence.<\/p>\n

In a little under two weeks, WWDC will begin. Like last year, I am sure Cook and Federighi are relieved they will not have to face developers in person. That would be awkward.<\/p><\/blockquote>\n\n

Ian Sherr<\/a>:<\/p>\n

\n

In his opening keynote for Microsoft Build, Nadella takes a slight swipe at Apple<\/p>\n<\/blockquote>\n\n

Previously:<\/p>\n