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Apple's two pronged battle - The EU and Epic Games

Published on 5 May 2021 at 16:57


The federal courtroom in San Francisco is facing a monumental trial this week. Epic Games, an American video game and software company that created the global hit game Fortnite in 2017 has filed a lawsuit against Apple. Experts believe that this antitrust case against Apple is going to be one of the tech industry’s biggest legal battle in years, with the current and former executives of Epic and Apple being among the prime witnesses who are expected to testify in court.

 

Antitrust legislation generally refers to laws that are designed to prevent companies from engaging in any kind of anti-competitive action. That is, do anything that would tend to artificially distort competition within a market.

 

Epic Games accused Apple of using their exclusive control of the operating system (iOS) to affect natural market competition. Apple kicked Fortnite off the App Store last year, after Epic Games offered an alternative payment option to its customers, bypassing the mandatory 30 percent commission charged by Apple on every in-app sale. The only legal way to download applications on Apple devices is to use the App Store, as iOS does not support external application downloads. So for any developer that aims to have their apps on devices running iOS there is no choice but to go through the app store and use it’s payment system regardless of Apple’s high commission rates.

 

The trial will determine whether Apple’s exclusive control over the iOS is a monopoly or not, and whether Apple can use that control to force developers to use the App Store and it’s payment system. If Epic wins, U.S. District Judge Yvonne Gonzalez Rogers, who will decide the case in the Northern District of California, could force Apple to give up control of app distribution, allowing customers to freely install software on iPhones, much like they do on desktop computers.

 

Apple has argued that their exclusive control of iOS keeps it safe from external attacks and protects user privacy at an unparalleled level. They claim that every app that applies to be on the App Store is carefully vetted to ensure it’s safe for use, has appropriate content and is free of malware. They also state that the commissions they charge for digital payments go to funding the App Store, which provides tools that help developers learn and build software. It is also important to mention the fact that simply having a monopoly is not a crime warranting change in the company structure, Epic will have to make a compelling case for it’s claim of Apple using that monopoly to knowingly violate Antitrust provisions.

 

The second antitrust case came from the European Union last Friday, regulators accusing Apple of imposing unfair rules and fees on rival music-streaming services that depend on the App Store to reach their iOS using audience. They argued that it allows Apple to undercut competitors to services like Apple Music and charge an unfair tax on developers.

 

The following two weeks will show further build-up on the two cases, and information post hearings could affect the sway of the case as Apple and Epic Games prepare for an enormous legal battle.

 


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