This hearing went really, really poorly for Epic. The judge repeatedly told Epic's lawyers she wasn't particularly persuaded by their arguments with regards to several key aspects of their case. Epic's case hinges on being able to establish that Apple has a "monopoly" in the single-brand market of "iOS app distribution". However, the judge seemed rather unconvinced that a market definition consisting of only iOS devices was actually the correct market to analyze. If Epic can't establish that "iOS app distribution" is in fact a valid antitrust market, they're going to have a lot of problems with their case, as both their section 1 (tying) claim and section 2 (monopoly maintenance) claim rely on that market definition.
As an aside, I've read a number of comments here lamenting that the judge doesn't understand tech, but I think the opposite is true as well: many of the commenters here don't understand the law. The judge needs to work within the framework of existing legal precedent when making her decisions, and unfortunately for Epic, it doesn't really seem like existing precedent is on their side.
As a specific example, many of the comments here point out that smartphones are not like gaming consoles because smartphones are general-purpose computing devices whereas consoles are entertainment devices. Be that as it may, there's nothing in US law that says general-purpose computing devices are supposed to be treated differently than other products for the purposes of antitrust analysis.
I wonder if the existing law is capable of dealing with the current situation. It seems crazy to me that anyone considers the mobile market sane or good for users and developers.
Think about it.
The average person has a smart phone where they only have access to 1 store. The arguments about sideloading on Android are somewhat moot IMO because the severity of warnings and effort to discourage users from sideloading are highly effective and, when combined with no one changing the defaults, the vast majority of people stick to the play store.
On the other side there are the developers who MUST deal with both companies. There is no choice. You can't build an app with a mobile component and ignore 1 of the only 2 distribution platforms. Why would I risk major R&D costs to develop anything novel or disruptive when I have no guarantee I can distribute that product and might even be facing a hostile distributor if my product disrupts them?
Does anyone think having 2 massive incumbents controlling distribution for a mode of computing that's become essential to western life is healthy? How is the market not going to devolve (even more) into a bunch of low effort skinner box IAP trash?
And the game console analogies are dumb. I don't need a game console. I don't have one. However, I NEED a mobile phone to participate in modern society. Try getting and keeping a good paying job if you don't have a mobile phone and are "unresponsive".
> I wonder if the existing law is capable of dealing with the current situation. It seems crazy to me that anyone considers the mobile market sane or good for users and developers.
Think about it.
I see this posted sooooo often and every time I just say "nope, it's exactly what I want and I do not want it to change for iOS".
Very pleased to see Epic starting off poorly here. Hopefully this all goes up in flames for them.
>I don't need a game console. I don't have one. However, I NEED a mobile phone to participate in modern society. Try getting and keeping a good paying job if you don't have a mobile phone and are "unresponsive".
They are not analogies. This case is centered around video game distribution. The comparisons are, in that respect, spot on. What job do you have that requires you to make in app purchases in a video game?
> there's nothing in US law that says general-purpose computing devices are supposed to be treated differently than other products for the purposes of antitrust analysis
Other products include Macs and PCs, which allow "sideloading" by default, out of the box. Why are game consoles the relevant comparison? There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
iPhone was not originally a game console. (Apple itself almost never makes games.) Indeed, iPhone was not originally a store either. Apple argued in court that App Store is not a separate product from iPhone, but that's easily historically refuted: iPhone shipped in 2007 without App Store! App Store was added a year later, so it's obviously not essential to the product. And IAP aren't essential to App Store either, because they weren't added until 2009.
It was developers like Epic who showed iPhone could be a gaming platform. Apple itself has a pretty poor history at gaming, and the Mac has always been subpar compared to Windows.
> iPhone was not originally a game console. (Apple itself almost never makes games.) Indeed, iPhone was not originally a store either. Apple argued in court that App Store is not a separate product from iPhone, but that's easily historically refuted: iPhone shipped in 2007 without App Store! App Store was added a year later, so it's obviously not essential to the product. And IAP aren't essential to App Store either, because they weren't added until 2009.
The failure in your reasoning here is your assertion that the iPhone that was launched in 2007 is the same iPhone that's about to be launched in October.
They are different products.
The iPhone 12 DOES launch with the App Store. If Epic wants to make it so any iPhone(s) that didn't originally launch with the App Store must be able to side load apps, I mean, go ahead.
> Why are game consoles the relevant comparison?
Why aren't they? In fact, I'd argue they are even MORE of a relevant comparison and MORE like a general purpose computer. Sure, Microsoft has not written Office for Xbox, but that's not a limitation of Xbox. You can (and this is encouraged) plug a keyboard and mouse right into an Xbox. It has a GPU, processor, hard drive, RAM, motherboard, etc.. It's literally a computer.
> There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
There's nothing in US law that says smartphones are supposed to be treated like desktop computers either. I have yet to see a convincing and consistent reason that they should be. I guess if you want to say that all computing devices should be open source and modifiable and all that, sure that's fine, but the distinction here is very much an arbitrary one.
PCs are availble from lots of different brands, you can even build your own from components. Game consoles are developed, built and produced by one and only one company: You can't buy an Xbox compatible console not from MS, neither a Playstation compatible device not from Sony. And you can't build your own. Therefore, the developer has to shoulder all the R&D and associated costs upfront. For game consoles we are accepting that the developer should be able to recoupe that cost by getting a share of all games sold. We even accept the idea that some consoles are sold at a loss.
For PCs, there is no central developer shouldering all the R&D costs. You can choose Windows as an OS, or some Linux or even (not legally, but technical) macOS. Lots of licensing and cross marketing deals going on. ("Intel inside," anyone?) You can build a single PC or a series of 50 or 50.000 without much R&D cost (but you won't have an ecosystem or a loyal user base you can control and monetize).
But you can't build an iPhone or iPad compatible device, nor can you buy one without an Apple logo. So, iPhones are in that regard far more comparable to game consoles than 08/15 PCs built from standard components. And it seems kind of consequential that Apple wants to be able to get their share from everything that uses their R&D (and platform and user base).
Being subpar has nothing to do with it, that's for the customers to vote with their wallets.
The underlying point is that it doesn't really matter (from a legal perspective) whether smartphones are more like PCs or game consoles when answering the question of whether it should be legal to sell "walled garden" devices.
> Other products include Macs and PCs, which allow "sideloading" by default, out of the box. Why are game consoles the relevant comparison? There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
I support Epic in this fight, but I agree with the Judge that "market" definitions in casual conversation have become so narrow as to be meaningless. I regularly see posters here unironically assert examples such as "general-knowledge search engine ads", "image-based social media", etc.
Anything can be a monopoly if you arbitrarily define its market as congruent with its market share.
> The judge repeatedly told Epic's lawyers she wasn't particularly persuaded by their arguments with regards to several key aspects of their case.
It is a bit more complicated than that. This was the preliminary injunction stage of the trial.
It is more that Epic did not pass the very high bar that it is so very likely to win the case, such that they should be able to force an injuction to happen right now.
That is a very high bar to pass, and it is more that the judge is not willing to effectively declare epic the winning, right now, all on her own.
Instead, the judge has said that she wants this to go to a jury, and that this is no ordinary case. She said that it is an extrordinary case, that is on the bleeding edge of technology monopoly law, and basically, that such an important case should not be decided by a judgement from the bench.
Or at least this was my impression of what she was trying to say, when I was listening to the trial live.
Which I agree with. I expect this to be a landmark technology monopoly case that is going to make its way all the way to the supreme court. As such, it would be inappropriate for the judge to basically decide the winner so early by enforcing an preliminary injunction, even though I ultimately believe that epic will win.
This is a very ballsy decision by Epic, forgoing significant iOS revenue in the hopes of eventually reclaiming some or all of that 30% app store tax.
I wonder how much of this decision was unilaterally made by Tim Sweeney. He is quite vocal about how much he hates the 30% tax (Valve included) because the vast majority is just profit and not for services rendered. It's excellent ammunition for his case to demonstrate that his storefront only charges 12% and is still profitable.
Question, if Apple were to lose the first trial would they be forced to allow Fortnite back on the App Store while the endless series of appeals follow?
1. Epic spent the first hour of the hearing arguing that the relevant antitrust market was the "iOS app distribution" market. The judge pushed back hard on this because there were alternative distribution channels available to Epic, saying: "I know that's how you want to frame the issue... I'm not convinced that you have."
2. With regards to Epic's tying claim, she said she was not particularly persuaded with their section 1 argument. Referring to IAP, she said: "I just don't see this as a separate and distinct product."
Those points imply she is unlikely to conclude that Epic has met the threshold of likelihood to succeed on the merits to win the preliminary injunction, yes. But they will also be considered during the trial itself.
> Instead, the judge has said that she wants this to go to a jury, and that this is no ordinary case. She said that it is an extrordinary case, that is on the bleeding edge of technology monopoly law, and basically, that such an important case should not be decided by a judgement from the bench.
It's baffling to me that we have still have this ridiculous idea that a lawsuit that's legally and technically complicated should be decided by people who haven't the first clue about the law or technology.
Civil suits shouldn't be tried by juries. Yeah, I said it, and I'll say it every time I'm in voir dire when I'm drawn into a jury pool for a civil suit. We should reserve it for times when a person's freedom or life are on the line, legally, but people fighting over money in complex legal arguments should be decided by legal and technical experts.
I believe you misunderstood how the process works. Plus, I saw this as working out as Epic had planned.
Yes, the judge Gonzalez Rogers said that she is not convinced enough by Epic's claims to force an injunction onto Apple, which would require Apple to immediately reinstate Fortnite into the app store and leave it there until the legal proceedings are finished.
But did anyone really expect that Epic can use the fast track to force Apple to continue distributing Fortnite while forfeiting the 30% before even going to the main trial? Sure, Epic requested that, but that doesn't mean that they reasonably expected to get it granted, too. Such a large case will almost never be settled pre-trial without an official jury.
So her rejecting the injunction is kind of how this normally works.
According to CNN, she also said "Fortnite players on iOS have a variety of choices to access the game even if it is no longer available on iOS" as the main reasoning as to why Apple's action is not illegal tying of App distribution to In-App payments. And then she said that she wants to hear what the public thinks.
So effectively, the stage is now set for Epic. They need to manufacture a large enough outcry by regular consumers about Fortnite being absent on iOS. And they need to do so before the trial in 2021. And to me, it looks like Epic has been very effective so far at making people speak out that they would have wanted Fortnite on iOS.
The judge also said "It's hard to ignore the economics of the industry, which is what you're asking me to do." when comparing the iOS app store to other walled gardens like Xbox and PS. I'd treat that as a friendly hint that Epic needs to show that game consoles and smartphones are not comparable industries. That should be easy, because smartphones are essential for everyday life. Game consoles are not.
And lastly, the judge also said "There are a lot of people in the public who consider you guys heroes for what you guys did, [..]". To me, that sounds like an acknowledgement that the general population does not support Apple's reaction, meaning that Epic is on a good path towards showing that iOS consumers in general do NOT have alternative ways for accessing Fortnite.
My observation extends beyond the preliminary injunction itself which was always going to be a long shot. Epic's entire case depends on being able to successfully plead a single-brand market consisting of only iOS devices. Yes, you are correct that whether Epic wins or loses the injunction now won't necessarily affect the outcome of the trial. However, failing to establish a single-brand market will.
So to the extent that the judge is unconvinced of the validity of a single-brand market now, is not good news for Epic's chances during the trial later.
iOS users have already moved on to the next hyped app. There is no “outcry” from iOS users. Epic even admitted that less than 10% of Fortnite players are on iOS.
Are you claiming that all of the articles that quoted the judge are biased?
I assume Epic endgame isn't this trial. Winning would be nice, but loosing might help show the need for new legislations. Also, the US is only one jurisdiction.
> However, the judge seemed rather unconvinced that a market definition consisting of only iOS devices was actually the correct market to analyze... As an aside, I've read a number of comments here lamenting that the judge doesn't understand tech, but I think the opposite is true as well: many of the commenters here don't understand the law.
I mean this is probably a good case of "the law doesn't understand the law" in that the law does not have a particularly useful definition of what constitutes a "market"
How important are the nuances of law exactly? The talk right now is stacking the Supreme Court with 6 conservatives can give a contested elections to conservatives and overturn Roe v Wade etc.
Not to mention how laws impact demographics differently.
Without knowing anything about laws specifically, this makes it seem like it isn’t very concrete. At all.
The Supreme Court may be the endgame of this trial. Maybe that's why they don't care about the jury. It'll doubtless be appealed no matter who wins, so does the outcome even matter?
Interesting to see the judge bring up the same points that so many have here on HN, myself included. I've read a few articles about this topic, not just this one, but some good points I saw from another article [1]:
> Judge Rogers questioned Epic on when, exactly Apple became a monopoly given that its App Store rules have remained unchanged since the App Store launched, which Epic had no solid answer for, responding only that it was a monopoly when Fortnite came to iOS in 2018. She also said that walled gardens have existed for four decades and that what Apple's doing isn't too different. "They created a platform," she said
> She also reiterated that Epic Games made a "calculated decision" to defy Apple's App Store rules, and the court doesn't provide injunctions for contractual disputes. Epic was "not forthright," she said. "There are people in the public who consider you guys heroes for what you did, but it's not honest.
> Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.
I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc.
What's illegal is taking advantage of your monopoly position. Microsoft was a monopoly? That was fine. Microsoft forced people towards Internet Explorer? Trouble.
Microsoft at the time owned 90 percent of the entire computer market.
The only thing Apple has a monopoly on is things Apple sells. If it is deemed that you can have a monopoly of a subset of a market, ask yourself how this will be applied to other businesses in the future. Does a mall have a legal (not colloquial) monopoly on stores in the mall?
Edit:
If you make a game that has a store in it, do you have to let others sell thing in your game’s store. You have a monopoly on things sold in your game. Your game is a platform.
Yes but the 30% cut (which is supposedly taking advantage of their monopoly) existed from the very beginning. They didn't eventually become a monopoly and then up prices to extort money from developers. From the very start they charged 30%, and despite of that fee, they still gained a huge market share. I would argue that because they were able to gain a monopoly without changing their fees, that the fees are not taking advantage of monopoly whatsoever.
> > Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.
She also glossed over the fact that software can be distributed free with its own payment systems in laptop/desktop OSs like Windows, OS X, Ubuntu etc. When I paid for Sublime I didn't go into an App Store to pay for it.
Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles. They are general purpose computing platforms.
> Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles. They are general purpose computing platforms.
Game consoles are general computing platforms as much as anything. Like Apple's devices they are artificially restricted with a walled garden model.
"I own this device, therefore I should be able to run anything I want" is an argument I can understand. "Company X invented this platform and therefore can choose what to allow to run on it" is also an argument I can understand (though I disagree). What I can't understand is this argument that Apple specifically shouldn't be allowed to restrict software but game consoles should.
Logical successors or not, the walled garden economic model remains actively in-use and viable on gaming platforms, and has not been found to be legally unacceptable to date. What basis exists for the walled garden economic model to be decreed unlawful, whether for video games or applications or any other digital content? How would that basis be legally distinctive from the walled gardens of physical retail stores?
The judge’s point is that this - “walled gardens” - is an economically sound and widely-used practice that has not previously been found to be unlawful, and therefore (likely) no basis exists to find in favor of Epic’s claims at this stage of the proceedings.
(Usual disclaimer applies: I am not your lawyer, I will not prepare additional citations, please seek legal counsel before taking action based on anything written above.)
> Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles.
I think that's a case a person could make in a court of law, but there are also compelling cases for "It's more like a console than not" and for "It's its own thing, a separate category of computing device, which should be beholden to a separate set of rules."
The App Store was one of the value-adds Apple brought to the smartphone ecosystem. In a system of heterogeneous methods to put apps on phones (if the app suite was configurable at all and not pre-loaded onto the device), Apple provided a system where they would do quality curation of the apps that were loaded on the device they made and a clean, obvious method to track the apps a person wanted on their device and install them. No complex configuration, no different-installers-for-different-apps, none of that PC-ecosystem nonsense. Along with the iPhone API (that erred on the side of performance over flexibility), it brought a strong product to market.
It's possible what is offered now isn't the same thing, but I think a case could be made by a competent lawyer that the store is part of the entire product offering and makes for a better consumer product, which is what US antitrust law often hinges on (consumer harm).
Correct me if I'm wrong, but did not Apple create the first app store and then set it, perhaps somewhat arbitrarily, to 30%? After that, all others simply followed suit and set their cut to 30% too?
If so, I would argue that it's high time to revisit the 30% charge. Whatever happened, competition among platforms did not reduce the 30% fee. I'm not sure why, but even if we cannot prove that there was price fixing, the Apple app store and other platforms have become so powerful that individuals and small companies cannot negotiate with any of the stores for a fair price.
The list of companies:
PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more
Include many (hint - the first 3) that were taking huge chunks of game publishers' money long before the iOS App Store ever existed. There were also many app stores for palmOS, WinCE, etc. some of which collected far more than 30%.
There was ClubNokia where you could pay by SMS for ringtones and on certain phones - games. Many 3rd s60 app stores were just credit card collection places and malware distribution centers. None of the stores were preloaded on the phone.
Steam probably had first "app store", but it has to be installed separately and usually you don't have to use it for the most part - you often could buy it online directly from the publisher or on CD/DVD.
PS Store launched in 2006. That's closest to what Apple did. Actually, exactly the same for most part until Apple added in-app, subscriptions etc. Difference was that to get listed on App Store you just had to pay $100 and make application that follows guidelines.
Here is where there are lot differences:
- Legally you can't sell any software for PlayStation without Sony getting a cut.
- That includes physical media
- Steam can only get it cut from sales on its store
- Publishers/developers can either sell directly to you without anyone getting a cut
- Or they can sell you a steam code and then steam doesn't get a cut
This is why I'm saying that Apple is closer to Sony than Steam.
I don't know where 30% cut came from, but I know steam has the same cut.
> I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc.
Presumably, if they’d said “because that’s what Google is/was charging”, it could be pursued as price fixing.
The number probably came from looking at what brick and mortar stores do. Typically stores "mark up" products by 40% from their distributors. And if you think about it, that's effectively what Apple does, but in this case, the distributor (aka app developer) has to "mark-up" the price to cover the cost incurred by selling in the app store. In general this practice is pretty common in retail.
The fact that there even is an "industry rate" is evidence of price fixing, if not by the legal definition (which may require explicit collusion) then by the layperson's definition.
IIRC, the 30% was chosen so Apple would roughly break even on credit card processing for $1 apps.
So Apple effectively only gets revenue from apps $2+, which then subsidizes the costs of reviewing and distributing the plethora of apps that are free.
In a way, it's a similar principle to progressive taxation. If your paid app is a hit on the App Store, then it's helping support the existence of all the free ones too.
> the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.
Justifying lax antitrust with the fact that other, similar market-power abuses, have also been permitted in the current lax antitrust atmosphere... as close to circular logic as it gets.
So you think Apple is abusing its extraordinary monopoly power by... charging what everyone else is charging?
I think legally it makes a pretty big difference: abusing a monopoly is considered a social bad because and to the extent that it results in higher prices for consumers.
No walled gardens should be beyond reproach IMO. I think Epic has it's work laid out for it, and they would definitely have a shot with a jury trial, and likely at the Supreme Court given Apple vs Pepper.
It's sometimes interesting to look at the history of walled gardens and how they came to be. Nintendo's console model, for example, was a direct reaction to previous failed no-walled-gardens models where consumer confidence that they weren't burning money buying a lemon console that only supported crappy games cracked.
B) Why didn't the Judge ask what kind of 'margin' Apple or MS gets for desktop versions of their apps? Because it's not 30%.
C) Asking 'when did Apple become a monopoly because they were not 15 years ago' is irrelevant: when did Standard Oil become a monopoly? AT&T? Certainly not the day they started out. These issues are shades of grey.
I'm tired of judges ruling on issues they don't understand, we need more expertise, just as they have in medicine.
Perhaps the most fundamental issue here with respect to 'Nintendo' comparisons - is that Gaming Consoles are purchased for Playing Games. That's it. All market participants know the stakes.
A mobile phone is an entry point to every line of business imaginable - it's a very broad platform and Apple has tried to take cuts of incidental businesses for all sorts of things.
The analogue would be AT&T charging you for 'every kind of business you did over your phone'.
Or Verizon charing you 30% for 'any kind of business you do over the internet'.
Or the electricity company for 'anything you use electricity for'.
Apple is leveraging the broader terms of mobile access: voice, browser, basic apps, which gives them a duopoly over mobile devices with Apple - into a crazy monopoly over their own platform.
Many markets are not rational in the way we would like them to be and have to be regulated, this is very common with single points of access: phone, water, electricity, energy, drugs, hospitals.
This looks like a prime opportunity for some creative and thoughtful regulatory response.
What lock in? Nobody is forcing Epic to develop for iOS and Fortnight is available on pretty much every other platform. It's literally the antithesis of lock in, no matter how much you dislike Apple or its perceived unjust influence.
Scale and market power are what makes a monopolist, by definition. It doesn't matter if the terms have changed; what has changed since 2008 is the scale and power of Apple.
Incidentally, the 30% came from the iTunes Music Store, on which the App Store was based 100%.
The most popular game consoles have 2-3 thousands games total. They are truly "curated". The Apple App Store and Google Play store each have 2-3 million apps each. They're orders of magnitude larger than game consoles. This is the crucial difference in platforms.
Apparently the 30% cut has it's origins in a deal between Nintendo and Hudsonsoft. 10% licensing fee, and 20% manufacturing costs for physical cartridges.
> Rogers has adjudicated various cases against Apple. In 2012, Rogers dismissed a class action lawsuit with prejudice, upholding Apple's defense that the "Illinois Brick doctrine" from the Supreme Court case Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) applied, as only the developers of apps could be damaged by Apple's policies, and consumers did not have statutory standing to bring suit on the developers' behalf. The Court specifically noted that the 30% fee Apple collects is "a cost passed-on to consumers by independent software developers".[8] The United States Court of Appeals for the Ninth Circuit reversed her decision, and the Court of Appeals was upheld by the Supreme Court in Apple Inc. v. Pepper.[9]
> In December 2014, Rogers presided over a jury trial against Apple, in which plaintiffs claimed DRM on Apple iTunes violated antitrust laws. On December 16, 2014, the jury reached a verdict in favor of Apple.[10]
The is the wrong history though. It only matters if you accept the App Store == console analogy, which I don't. Historically speaking, App Store was not based on game consoles, it was based on the iTunes Music Store. Everything about the App Store design was exactly the same as the iTunes Music Store, right down to being in iTunes itself. App developers even uploaded their apps to iTunes Connect (which has only very recently been renamed to App Store Connect).
US antitrust law isn't designed to break up platform monopolies, period. Which is unfortunate, because the kind of all-owning combinations it's designed around aren't really possible in tech, post-Internet.
Microsoft of the 90s was much-lamented, but in reality they extracted far less value than they could have. They could have easily asked for 30% of all revenue of all Windows software, and developers would have had to pay it.
I'm hesitant to advocate breaking up of platform monopolies or duopolies, but a lesser-version of antitrust law would substantially benefit consumers in both app stores and ISPs. In both cases, the monopoly stems from monopolized access to the end customer, which is what would be beneficial to attack.
IMHO, a sliding scale of mandates for increasingly-open third party access based on market share (broken down into each user market!) would be appropriate.
If you want 90% market share, go for it. But you'd better believe you're going to have to provide (1) customer access to third parties & (2) any work required to enable them, at cost.
Just a reminder that actually by definition consumer harm is the bedrock standard for antitrust litigation in the US. Scale and market power may be components of an argument for consumer harm, but they are not sufficient in and of themselves.
> consumer harm is the bedrock standard for antitrust litigation in the US.
Which is really dangerous, IMHO, because a lot of the most vile bits of monopoly power can happen without directly causing immediate consumer harm.
You shouldn't need to prove consumer harm to win antitrust litigation. That should be just one of a few different harms, any one of which should be able to win antitrust litigation.
To ask you the same question, restated, that the judge asked Epic, which they had no answer for: if Apple wasn't a monopoly before, but they're a monopoly now, when did they become a monopoly?
While it is an interesting question, what does it matter? When did standard oil become a monopoly? Is there some specific date where they changed from competitive to anti-competitive? More likely they grew over time and the ability for competition to exist was diminished over the entire period.
Not a direct answer to your question, but somewhat related. When the iPhone was first released (or a year later when the App Store was released) we did have more competition than we do today.
Windows Mobile, Symbian OS, BlackBerry OS (and to some extent Maemo) all had the opportunity to compete with iOS and Android but were either too slow to transition to market demands or did not get a lot of traction to start with.
While not officially a monopoly in my book, I think it's safe to state that we're now down to iOS and Android for 99% of the market with KaiOS Ubuntu Touch (Tizen?) picking up some of the more niche or cheap devices.
If lowering your price doesn't increase demand then you are in a way a monopoly. I don't see any scenario at all where Apple lower their cut from 30% except via government action, so it makes sense to legally force them to either get competition or to lower their cut below 30% to something more sensible.
It very much matters if the terms changed, considering that the long shot legal precedent Epic is relying on is Kodak v. Image Technical Services. Terms changing in that case was a key element of why a single brand could be considered a valid antitrust market.
Could you explain this in more detail? I read about this case, and my understanding is that the Independent Service Organizations ("ISOs") didn't actually have a direct contractual relationship with Kodak. They were truly independent, and thus there were no terms to change.
As in, to continue with the game console analogy, you must have at least one license to a powerful engine (like Unreal Engine with a 5% fee) to develop efficiently.
Do you actually save 5% (assuming PS is 30%) by developing for the Apple ecosystem? (Assuming Metal is comparable to Unreal)
> Do you actually save 5% (assuming PS is 30%) by developing for the Apple ecosystem?
Probably not - assuming you're being smart and targeting multiple platforms, you're still going to be using Unreal/Unity. And even if you're only targeting the Mac, Unreal/Unity bring a lot more than rendering to the table, so you're probably still using either of them, all with a commercial license.
And unless you're doing distribution yourself, anywhere you put your game will take a percentage, pretty much all around 30%. Some places like itch.io let you define how much they take, but no one really uses itch.io for anything bigger than an indie game.
>Scale and market power are what makes a monopolist, by definition. It doesn't matter if the terms have changed; what has changed since 2008 is the scale and power of Apple.
Anti-trust laws have specific conditions to meet such as predatory pricing, product tying, exclusive dealing, etc. It's not just a matter of market share and market power, they have to have obtained or maintained that market position unfairly. This sets a pretty high bar in a market with 2.5 major app platforms (Apple, Google and Amazon).
> “Walled gardens have existed for decades,” said the judge. “Nintendo has had a walled garden. Sony has had a walled garden. Microsoft has had a walled garden. What Apple’s doing is not much different...
Shouldn't a judge look at what is allowed by the law, instead of being the devil's advocate and say "those guys have done it for years, so it's fine"?
Something might be a long standing practice and still be against the law. Something might have not been against the law in the past and be against it now. I'm not saying that it is, but that's what the judge should base his argument on.
> Something might be a long standing practice and still be against the law
The first step to finding legal precedent is exploring practical precedent. This being an injunction hearing, part of the judge’s job is determining whether Epic is likely to prevail in its argument. The fact that it seeks to challenge practical precedent makes the outcome less predictable and an injunction less reasonable.
> Shouldn't a judge look at what is allowed by the law, instead of being the devil's advocate and say "those guys have done it for years, so it's fine"?
I haven't been able to find the actual details yet, but from what I can gather, this is not the actual hearing.
Right now, the judge's job isn't to determine whether Apple's terms were illegal, or whether Epic breached those terms with Apple.
The judge is deciding whether or not Apple should be injuncted from booting Fortnite from the App Store, and whether or not the matter should proceed to trial.
It's less about black-letter law, and more about judicial discretion (albeit exercised very conservatively). So this type of looser language is to be expected.
No. The judge is asking a valid question based on precedence. It’s up to the plaintiff’s legal team to show the judge either why their case is different, or that the precedent setters are in the wrong as well.
> Something might be a long standing practice and still be against the law.
That's extremely unlikely -- it would have been prosecuted previously otherwise.
A better term for "long standing practice" is precedent. Laws often don't account for certain edge cases or unseen developments, so judges in common law countries do very much look at what other judges have permitted or not in the past, in order to maintain continuity.
Otherwise you'd be at the whim of each and every judge interpreting law totally differently, which would be a nightmare for anyone trying to figure out what is permitted or not.
> That's extremely unlikely -- it would have been prosecuted previously otherwise.
This sounds like the legal equivalent of the joke about the two economists who find a $20 bill on the ground. One asks "Is that a $20 bill?" The other says, "Couldn't be. If it was, someone would have picked it up by now", and they move on.
Hard to say for sure without additional context to the judge's statements; perhaps they were discussing precedent?
In general, if something is common for decades and a plaintiff comes to claim it's illegal, the burden of proof is on the plaintiff. The defendant will be able to bring up previous court cases where the status quo was challenged and unmodified.
> Shouldn't a judge look at what is allowed by the law, instead of being the devil's advocate and say "those guys have done it for years, so it's fine"?
This has been done in the past regarding firearms law - “the law has stood for decades, so it must be constitutional.”
I find that reasoning specious, but it’s happened multiple times so it’s apparently accepted by at least a plurality of our judiciary.
Of course Epic was being dishonest. This is about the court of public opinion - there’s very little chance of
winning this lawsuit, but it draws attention of lawmakers and lobbyists to either change the laws or get the DOJ or EU to take another look at this.
That said, I think most people are going to be disappointed regardless the outcome.
Markets aren’t created by god, they’re created by customers.
If you want to force the creation of an App Store market, one that customers aren’t actually asking for, it will need to be government-mandated.
If you think the EU or US knows how to create a utility market of app stores without completely fucking up competition, security, consumer experience, and enshrining Android and IOS as the “government sanctioned platforms” for 50 years, you are placing far too much faith in the power of regulation. It takes years to decades to get this right - no one has the answers, and governments aren’t great with uncertainty (see how policy and science mix!).
Laws move very slowly, especially with partisan gridlock. Do we really think these platforms have a 50 year lifespan? If not, it’s probably not worth regulating.
Partially off topic but I like this feature of American law of asking people (and not judges) to decide the outcome of this kind of trials:
> Judge Gonzalez Rogers did recommend, though, that the case be taken to a jury trial in July next year to settle these issues permanently. “It is important enough to understand what real people think,” said Rogers. “Do these security issues concern people or not?”
The rate is irrelevant to the question of Epic vs Apple. In their case, Apple had terms already in place which Epic agreed to in order to develop on their platform. Epic then decided to try to defy those same terms by challenging them in court. The judge pointed out that's not how T&Cs work.
If Microsoft introduces wiOS (Or OS W?) in which you can only run applications you install through an app store, then users and developers will decide whether that's an experience they want and if it is, then an ecosystem will develop around it just as happened with Apple. If not, it will just be an expensive lesson for Microsoft while everyone remains on their preferred OS.
If it turns out all major OSes lock their users into app stores and there remains a significant market for users who don't want that experience, the market will be primed for another OS competitor to take that share.
You can still distribute a Mac App outside of the App Store, without a fee. It's pretty clear, as I think is Apple's strategy, that there is a line between Mac and iOS when it comes to possible use cases.
I'm curious to know what they plan to do with iPad OS though... the MacCatalyst and Swift UI strategy will be interesting to watch evolve in light of these challenges.
If Microsoft wants to start doing that in their app store, I don't see why they couldn't. But they'd be competing with all the other app stores available for buying PC software (as well as physical stores selling physical media).
But Microsoft doesn't make hardware that's the only target for their desktop OS, so they don't have the market lock-in Apple does, nor could they claim the app store and the hardware they don't make are part of the same product for PCs running Windows.
In contrast? They already do this for the XBox Live store, where they are the sole online distribution channel for software running on the console they manufacture.
Apple has been charging since they allowed third party access to App Store. Quite different in this case. Epic and consumers know what they’re getting into with Apple.
And now everyone should know what they are getting into with any of these stores that 30% is normal. Fight back is futile. Just makes microsoft look like stupid business guys not charging 30% yet.
Oh there will be an outcry of angry developers the magnitude of which has never been seen before but I also think that MS should be legally allowed to do it.
> She also said that walled gardens have existed for four decades and that what Apple's doing isn't too different.
In relation to this lawsuit it's mostly the same, but in general it's way different. The iOS is not a gaming platform. While gaming consoles are purely for entertainment and mostly optional in almost everyone's life, phones are not. The iOS walled garden is a lot more like a Windows or Mac walled garden would be, if it existed, which would be horrible.
Phones are somehow not accepted as a general purpose personal computing platform, while they clearly are. I don't think Epic Games could reasonably sell that argument in their position, but it doesn't mean they are wrong.
The reason that consoles are not accepted as a general purpose platform is because the manufacturers have gone even farther than phone manufacturers in locking them down. Consoles are just computers with gaming-oriented operating systems.
Consoles couples hardware generations with appstore, the iphone store has one appstore for all hardware generations. That is a huge difference. There is no iphone3 appstore where I can buy iphone3 apps, in fact iphone3 stopped being supported so likely there are many apps that you can no longer install that worked just fine before. However there is still a ps3 store where I can buy 14 year old games and they still work with no maintenance required from the developers because their ecosystem doesn't break things.
So as soon as I use a PS4 to do something other than play video games, Sony should be forced to abandon their current business model? Seems like a shaky distinction to me. “General purpose computer” is an opinion, nothing more.
I wish I could side with one of the parties in this case but it's too complicated, too fucked up.
Epic would be perfectly happy with a big-boy exemption for Fortnite that the "little devs" (who actually might be hurt by the 30% cut or "walled gardens") would never see. They're half owned by Tencent, which stands for everything wrong with exploitative F2P tactics and China's foot-in-the-door politics. I don't want them to win.
But Apple, of course, is clearly planning to cut off open platform development in favor of a single-store system, slowly creeping into macOS. Worse: Microsoft is learning from them and will clearly attempt to replicate any such system should they be successful, which would end up in something closer to a true monopoly.
It's kinda awful. I wish this wasn't two companies suing each other over creed but an actual investigation by a government agency for exploiting a monopoly position.
Unfortunately, there are no antitrust laws whatsoever differentiating products based on whether they are "general-purpose" or not in the United States, and there is also no court precedent for such a distinction. Thus, from the law's perspective, an Xbox is a product just like an iPhone, and any ruling affecting one also affects the other. "General-purpose" has no legal meaning.
I don't really agree that my phone is a "general purpose computing platform". What detail makes something a general purpose computer? Is it true that only games can run on it (what about Netflix clients and media browsers)? My Android media player has a CPU, video output, and runs some games and some non-games. Does that make it a general purpose computer?
People have been saying this for years but there is no evidence. You do need to sign your apps in most cases these days but they don’t restrict you from downloading anything you want.
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As an aside, I've read a number of comments here lamenting that the judge doesn't understand tech, but I think the opposite is true as well: many of the commenters here don't understand the law. The judge needs to work within the framework of existing legal precedent when making her decisions, and unfortunately for Epic, it doesn't really seem like existing precedent is on their side.
As a specific example, many of the comments here point out that smartphones are not like gaming consoles because smartphones are general-purpose computing devices whereas consoles are entertainment devices. Be that as it may, there's nothing in US law that says general-purpose computing devices are supposed to be treated differently than other products for the purposes of antitrust analysis.
Think about it.
The average person has a smart phone where they only have access to 1 store. The arguments about sideloading on Android are somewhat moot IMO because the severity of warnings and effort to discourage users from sideloading are highly effective and, when combined with no one changing the defaults, the vast majority of people stick to the play store.
On the other side there are the developers who MUST deal with both companies. There is no choice. You can't build an app with a mobile component and ignore 1 of the only 2 distribution platforms. Why would I risk major R&D costs to develop anything novel or disruptive when I have no guarantee I can distribute that product and might even be facing a hostile distributor if my product disrupts them?
Does anyone think having 2 massive incumbents controlling distribution for a mode of computing that's become essential to western life is healthy? How is the market not going to devolve (even more) into a bunch of low effort skinner box IAP trash?
And the game console analogies are dumb. I don't need a game console. I don't have one. However, I NEED a mobile phone to participate in modern society. Try getting and keeping a good paying job if you don't have a mobile phone and are "unresponsive".
I am an iOS user. I like that iOS takes a heavy handed approach to the App Store and controls it completely.
I do not want developers to hav the option to have their own payments. Apple Pay is so easy and convenient.
I do not want developers to be able to distribute apps without Apple approval.
Apples policies probably result in developer harm, but anti trust law is to protect me as a user not you as a developer.
To be frank, I don’t really care that Apple is a pain to deal with. That is why I, the user, pay you, the developer to deal with them.
I see this posted sooooo often and every time I just say "nope, it's exactly what I want and I do not want it to change for iOS".
Very pleased to see Epic starting off poorly here. Hopefully this all goes up in flames for them.
They are not analogies. This case is centered around video game distribution. The comparisons are, in that respect, spot on. What job do you have that requires you to make in app purchases in a video game?
Other products include Macs and PCs, which allow "sideloading" by default, out of the box. Why are game consoles the relevant comparison? There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
iPhone was not originally a game console. (Apple itself almost never makes games.) Indeed, iPhone was not originally a store either. Apple argued in court that App Store is not a separate product from iPhone, but that's easily historically refuted: iPhone shipped in 2007 without App Store! App Store was added a year later, so it's obviously not essential to the product. And IAP aren't essential to App Store either, because they weren't added until 2009.
It was developers like Epic who showed iPhone could be a gaming platform. Apple itself has a pretty poor history at gaming, and the Mac has always been subpar compared to Windows.
The failure in your reasoning here is your assertion that the iPhone that was launched in 2007 is the same iPhone that's about to be launched in October.
They are different products.
The iPhone 12 DOES launch with the App Store. If Epic wants to make it so any iPhone(s) that didn't originally launch with the App Store must be able to side load apps, I mean, go ahead.
> Why are game consoles the relevant comparison?
Why aren't they? In fact, I'd argue they are even MORE of a relevant comparison and MORE like a general purpose computer. Sure, Microsoft has not written Office for Xbox, but that's not a limitation of Xbox. You can (and this is encouraged) plug a keyboard and mouse right into an Xbox. It has a GPU, processor, hard drive, RAM, motherboard, etc.. It's literally a computer.
> There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
There's nothing in US law that says smartphones are supposed to be treated like desktop computers either. I have yet to see a convincing and consistent reason that they should be. I guess if you want to say that all computing devices should be open source and modifiable and all that, sure that's fine, but the distinction here is very much an arbitrary one.
For PCs, there is no central developer shouldering all the R&D costs. You can choose Windows as an OS, or some Linux or even (not legally, but technical) macOS. Lots of licensing and cross marketing deals going on. ("Intel inside," anyone?) You can build a single PC or a series of 50 or 50.000 without much R&D cost (but you won't have an ecosystem or a loyal user base you can control and monetize).
But you can't build an iPhone or iPad compatible device, nor can you buy one without an Apple logo. So, iPhones are in that regard far more comparable to game consoles than 08/15 PCs built from standard components. And it seems kind of consequential that Apple wants to be able to get their share from everything that uses their R&D (and platform and user base).
Being subpar has nothing to do with it, that's for the customers to vote with their wallets.
Are they legally required to do so?
The judge presiding over the case disagrees.
Anything can be a monopoly if you arbitrarily define its market as congruent with its market share.
It is a bit more complicated than that. This was the preliminary injunction stage of the trial.
It is more that Epic did not pass the very high bar that it is so very likely to win the case, such that they should be able to force an injuction to happen right now.
That is a very high bar to pass, and it is more that the judge is not willing to effectively declare epic the winning, right now, all on her own.
Instead, the judge has said that she wants this to go to a jury, and that this is no ordinary case. She said that it is an extrordinary case, that is on the bleeding edge of technology monopoly law, and basically, that such an important case should not be decided by a judgement from the bench.
Or at least this was my impression of what she was trying to say, when I was listening to the trial live.
Which I agree with. I expect this to be a landmark technology monopoly case that is going to make its way all the way to the supreme court. As such, it would be inappropriate for the judge to basically decide the winner so early by enforcing an preliminary injunction, even though I ultimately believe that epic will win.
I wonder how much of this decision was unilaterally made by Tim Sweeney. He is quite vocal about how much he hates the 30% tax (Valve included) because the vast majority is just profit and not for services rendered. It's excellent ammunition for his case to demonstrate that his storefront only charges 12% and is still profitable.
Question, if Apple were to lose the first trial would they be forced to allow Fortnite back on the App Store while the endless series of appeals follow?
1. Epic spent the first hour of the hearing arguing that the relevant antitrust market was the "iOS app distribution" market. The judge pushed back hard on this because there were alternative distribution channels available to Epic, saying: "I know that's how you want to frame the issue... I'm not convinced that you have."
2. With regards to Epic's tying claim, she said she was not particularly persuaded with their section 1 argument. Referring to IAP, she said: "I just don't see this as a separate and distinct product."
Those points imply she is unlikely to conclude that Epic has met the threshold of likelihood to succeed on the merits to win the preliminary injunction, yes. But they will also be considered during the trial itself.
https://www.macrumors.com/2020/09/29/apple-epic-games-no-jur...
It's baffling to me that we have still have this ridiculous idea that a lawsuit that's legally and technically complicated should be decided by people who haven't the first clue about the law or technology.
Civil suits shouldn't be tried by juries. Yeah, I said it, and I'll say it every time I'm in voir dire when I'm drawn into a jury pool for a civil suit. We should reserve it for times when a person's freedom or life are on the line, legally, but people fighting over money in complex legal arguments should be decided by legal and technical experts.
Yes, the judge Gonzalez Rogers said that she is not convinced enough by Epic's claims to force an injunction onto Apple, which would require Apple to immediately reinstate Fortnite into the app store and leave it there until the legal proceedings are finished.
But did anyone really expect that Epic can use the fast track to force Apple to continue distributing Fortnite while forfeiting the 30% before even going to the main trial? Sure, Epic requested that, but that doesn't mean that they reasonably expected to get it granted, too. Such a large case will almost never be settled pre-trial without an official jury.
So her rejecting the injunction is kind of how this normally works.
According to CNN, she also said "Fortnite players on iOS have a variety of choices to access the game even if it is no longer available on iOS" as the main reasoning as to why Apple's action is not illegal tying of App distribution to In-App payments. And then she said that she wants to hear what the public thinks.
So effectively, the stage is now set for Epic. They need to manufacture a large enough outcry by regular consumers about Fortnite being absent on iOS. And they need to do so before the trial in 2021. And to me, it looks like Epic has been very effective so far at making people speak out that they would have wanted Fortnite on iOS.
The judge also said "It's hard to ignore the economics of the industry, which is what you're asking me to do." when comparing the iOS app store to other walled gardens like Xbox and PS. I'd treat that as a friendly hint that Epic needs to show that game consoles and smartphones are not comparable industries. That should be easy, because smartphones are essential for everyday life. Game consoles are not.
And lastly, the judge also said "There are a lot of people in the public who consider you guys heroes for what you guys did, [..]". To me, that sounds like an acknowledgement that the general population does not support Apple's reaction, meaning that Epic is on a good path towards showing that iOS consumers in general do NOT have alternative ways for accessing Fortnite.
Also, I'm not sure this is a neutral report on the Apple/Epic battle. The writer is called "James Vincent", just like this guy: https://appleinsider.com/articles/20/02/26/ex-apple-ad-chief...
So to the extent that the judge is unconvinced of the validity of a single-brand market now, is not good news for Epic's chances during the trial later.
Are you claiming that all of the articles that quoted the judge are biased?
I mean this is probably a good case of "the law doesn't understand the law" in that the law does not have a particularly useful definition of what constitutes a "market"
Not to mention how laws impact demographics differently.
Without knowing anything about laws specifically, this makes it seem like it isn’t very concrete. At all.
I don't think Apple has ever marketed their iPhones as a general purpose computing device.
However they do advertise iPad as a laptop replacement.
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> Judge Rogers questioned Epic on when, exactly Apple became a monopoly given that its App Store rules have remained unchanged since the App Store launched, which Epic had no solid answer for, responding only that it was a monopoly when Fortnite came to iOS in 2018. She also said that walled gardens have existed for four decades and that what Apple's doing isn't too different. "They created a platform," she said
> She also reiterated that Epic Games made a "calculated decision" to defy Apple's App Store rules, and the court doesn't provide injunctions for contractual disputes. Epic was "not forthright," she said. "There are people in the public who consider you guys heroes for what you did, but it's not honest.
> Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.
I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc.
[1] https://www.macrumors.com/2020/09/28/epic-games-apple-disput...
What's illegal is taking advantage of your monopoly position. Microsoft was a monopoly? That was fine. Microsoft forced people towards Internet Explorer? Trouble.
The only thing Apple has a monopoly on is things Apple sells. If it is deemed that you can have a monopoly of a subset of a market, ask yourself how this will be applied to other businesses in the future. Does a mall have a legal (not colloquial) monopoly on stores in the mall?
Edit: If you make a game that has a store in it, do you have to let others sell thing in your game’s store. You have a monopoly on things sold in your game. Your game is a platform.
She also glossed over the fact that software can be distributed free with its own payment systems in laptop/desktop OSs like Windows, OS X, Ubuntu etc. When I paid for Sublime I didn't go into an App Store to pay for it.
Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles. They are general purpose computing platforms.
Game consoles are general computing platforms as much as anything. Like Apple's devices they are artificially restricted with a walled garden model.
"I own this device, therefore I should be able to run anything I want" is an argument I can understand. "Company X invented this platform and therefore can choose what to allow to run on it" is also an argument I can understand (though I disagree). What I can't understand is this argument that Apple specifically shouldn't be allowed to restrict software but game consoles should.
The judge’s point is that this - “walled gardens” - is an economically sound and widely-used practice that has not previously been found to be unlawful, and therefore (likely) no basis exists to find in favor of Epic’s claims at this stage of the proceedings.
(Usual disclaimer applies: I am not your lawyer, I will not prepare additional citations, please seek legal counsel before taking action based on anything written above.)
I think that's a case a person could make in a court of law, but there are also compelling cases for "It's more like a console than not" and for "It's its own thing, a separate category of computing device, which should be beholden to a separate set of rules."
The App Store was one of the value-adds Apple brought to the smartphone ecosystem. In a system of heterogeneous methods to put apps on phones (if the app suite was configurable at all and not pre-loaded onto the device), Apple provided a system where they would do quality curation of the apps that were loaded on the device they made and a clean, obvious method to track the apps a person wanted on their device and install them. No complex configuration, no different-installers-for-different-apps, none of that PC-ecosystem nonsense. Along with the iPhone API (that erred on the side of performance over flexibility), it brought a strong product to market.
It's possible what is offered now isn't the same thing, but I think a case could be made by a competent lawyer that the store is part of the entire product offering and makes for a better consumer product, which is what US antitrust law often hinges on (consumer harm).
The argument that there is some other platform where software is distributed for free relies on that platform being comparable iOS.
If it is comparable to iOS, then consumers can just choose it instead.
Yes, let's ignore the actual predecessors of smartPHONES, you know, cellPHONES. It makes our argument much easier, much.
I mean, it isn't a big deal there because you can just go purchase these stuff on other stores.
If so, I would argue that it's high time to revisit the 30% charge. Whatever happened, competition among platforms did not reduce the 30% fee. I'm not sure why, but even if we cannot prove that there was price fixing, the Apple app store and other platforms have become so powerful that individuals and small companies cannot negotiate with any of the stores for a fair price.
Steam, at least, has it beat, in 2005: https://en.wikipedia.org/wiki/Rag_Doll_Kung_Fu
I'm fairly certain there were apps available for purchase on Nokia and other phones well before that, as well.
App Store didn't come until 2008.
Include many (hint - the first 3) that were taking huge chunks of game publishers' money long before the iOS App Store ever existed. There were also many app stores for palmOS, WinCE, etc. some of which collected far more than 30%.
Steam probably had first "app store", but it has to be installed separately and usually you don't have to use it for the most part - you often could buy it online directly from the publisher or on CD/DVD.
PS Store launched in 2006. That's closest to what Apple did. Actually, exactly the same for most part until Apple added in-app, subscriptions etc. Difference was that to get listed on App Store you just had to pay $100 and make application that follows guidelines.
Here is where there are lot differences:
- Legally you can't sell any software for PlayStation without Sony getting a cut. - That includes physical media - Steam can only get it cut from sales on its store - Publishers/developers can either sell directly to you without anyone getting a cut - Or they can sell you a steam code and then steam doesn't get a cut
This is why I'm saying that Apple is closer to Sony than Steam.
I don't know where 30% cut came from, but I know steam has the same cut.
I vaguely remember that when Steam launched and started charging 30%, it was way less than what retail charges.
Presumably, if they’d said “because that’s what Google is/was charging”, it could be pursued as price fixing.
That's not price fixing if they make the decision to match Google on their own, rather than in concert with Google.
So Apple effectively only gets revenue from apps $2+, which then subsidizes the costs of reviewing and distributing the plethora of apps that are free.
In a way, it's a similar principle to progressive taxation. If your paid app is a hit on the App Store, then it's helping support the existence of all the free ones too.
Apple isn’t paying 30c + 2.9% i.e. 33c that someone with no experience ever can get on opening a Shopify store.
Justifying lax antitrust with the fact that other, similar market-power abuses, have also been permitted in the current lax antitrust atmosphere... as close to circular logic as it gets.
I think legally it makes a pretty big difference: abusing a monopoly is considered a social bad because and to the extent that it results in higher prices for consumers.
Also, I'm not sure why you think Apple v. Pepper is relevant here?
How ridiculous.
A) It's not the margins, it's the lock-in.
B) Why didn't the Judge ask what kind of 'margin' Apple or MS gets for desktop versions of their apps? Because it's not 30%.
C) Asking 'when did Apple become a monopoly because they were not 15 years ago' is irrelevant: when did Standard Oil become a monopoly? AT&T? Certainly not the day they started out. These issues are shades of grey.
I'm tired of judges ruling on issues they don't understand, we need more expertise, just as they have in medicine.
Perhaps the most fundamental issue here with respect to 'Nintendo' comparisons - is that Gaming Consoles are purchased for Playing Games. That's it. All market participants know the stakes.
A mobile phone is an entry point to every line of business imaginable - it's a very broad platform and Apple has tried to take cuts of incidental businesses for all sorts of things.
The analogue would be AT&T charging you for 'every kind of business you did over your phone'.
Or Verizon charing you 30% for 'any kind of business you do over the internet'.
Or the electricity company for 'anything you use electricity for'.
Apple is leveraging the broader terms of mobile access: voice, browser, basic apps, which gives them a duopoly over mobile devices with Apple - into a crazy monopoly over their own platform.
Many markets are not rational in the way we would like them to be and have to be regulated, this is very common with single points of access: phone, water, electricity, energy, drugs, hospitals.
This looks like a prime opportunity for some creative and thoughtful regulatory response.
On Epic's own terms, that's not what Apple did. There never was a market for iOS apps that Apple took over.
That means the best argument actually is that they became a monopoly on day one, but you dismiss that for some reason.
What lock in? Nobody is forcing Epic to develop for iOS and Fortnight is available on pretty much every other platform. It's literally the antithesis of lock in, no matter how much you dislike Apple or its perceived unjust influence.
Incidentally, the 30% came from the iTunes Music Store, on which the App Store was based 100%.
The most popular game consoles have 2-3 thousands games total. They are truly "curated". The Apple App Store and Google Play store each have 2-3 million apps each. They're orders of magnitude larger than game consoles. This is the crucial difference in platforms.
https://www.msn.com/en-us/news/technology/the-30percent-fee-...
> In December 2014, Rogers presided over a jury trial against Apple, in which plaintiffs claimed DRM on Apple iTunes violated antitrust laws. On December 16, 2014, the jury reached a verdict in favor of Apple.[10]
Source: https://en.m.wikipedia.org/wiki/Yvonne_Gonzalez_Rogers
Very true. Worth noting here also is that (US) antitrust law isn't designed to break up 100% of all monopolies.
Microsoft of the 90s was much-lamented, but in reality they extracted far less value than they could have. They could have easily asked for 30% of all revenue of all Windows software, and developers would have had to pay it.
I'm hesitant to advocate breaking up of platform monopolies or duopolies, but a lesser-version of antitrust law would substantially benefit consumers in both app stores and ISPs. In both cases, the monopoly stems from monopolized access to the end customer, which is what would be beneficial to attack.
IMHO, a sliding scale of mandates for increasingly-open third party access based on market share (broken down into each user market!) would be appropriate.
If you want 90% market share, go for it. But you'd better believe you're going to have to provide (1) customer access to third parties & (2) any work required to enable them, at cost.
Which is really dangerous, IMHO, because a lot of the most vile bits of monopoly power can happen without directly causing immediate consumer harm.
You shouldn't need to prove consumer harm to win antitrust litigation. That should be just one of a few different harms, any one of which should be able to win antitrust litigation.
Windows Mobile, Symbian OS, BlackBerry OS (and to some extent Maemo) all had the opportunity to compete with iOS and Android but were either too slow to transition to market demands or did not get a lot of traction to start with.
While not officially a monopoly in my book, I think it's safe to state that we're now down to iOS and Android for 99% of the market with KaiOS Ubuntu Touch (Tizen?) picking up some of the more niche or cheap devices.
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As in, to continue with the game console analogy, you must have at least one license to a powerful engine (like Unreal Engine with a 5% fee) to develop efficiently.
Do you actually save 5% (assuming PS is 30%) by developing for the Apple ecosystem? (Assuming Metal is comparable to Unreal)
Probably not - assuming you're being smart and targeting multiple platforms, you're still going to be using Unreal/Unity. And even if you're only targeting the Mac, Unreal/Unity bring a lot more than rendering to the table, so you're probably still using either of them, all with a commercial license.
And unless you're doing distribution yourself, anywhere you put your game will take a percentage, pretty much all around 30%. Some places like itch.io let you define how much they take, but no one really uses itch.io for anything bigger than an indie game.
Anti-trust laws have specific conditions to meet such as predatory pricing, product tying, exclusive dealing, etc. It's not just a matter of market share and market power, they have to have obtained or maintained that market position unfairly. This sets a pretty high bar in a market with 2.5 major app platforms (Apple, Google and Amazon).
Shouldn't a judge look at what is allowed by the law, instead of being the devil's advocate and say "those guys have done it for years, so it's fine"?
Something might be a long standing practice and still be against the law. Something might have not been against the law in the past and be against it now. I'm not saying that it is, but that's what the judge should base his argument on.
The first step to finding legal precedent is exploring practical precedent. This being an injunction hearing, part of the judge’s job is determining whether Epic is likely to prevail in its argument. The fact that it seeks to challenge practical precedent makes the outcome less predictable and an injunction less reasonable.
I haven't been able to find the actual details yet, but from what I can gather, this is not the actual hearing.
Right now, the judge's job isn't to determine whether Apple's terms were illegal, or whether Epic breached those terms with Apple.
The judge is deciding whether or not Apple should be injuncted from booting Fortnite from the App Store, and whether or not the matter should proceed to trial.
It's less about black-letter law, and more about judicial discretion (albeit exercised very conservatively). So this type of looser language is to be expected.
That's extremely unlikely -- it would have been prosecuted previously otherwise.
A better term for "long standing practice" is precedent. Laws often don't account for certain edge cases or unseen developments, so judges in common law countries do very much look at what other judges have permitted or not in the past, in order to maintain continuity.
Otherwise you'd be at the whim of each and every judge interpreting law totally differently, which would be a nightmare for anyone trying to figure out what is permitted or not.
This sounds like the legal equivalent of the joke about the two economists who find a $20 bill on the ground. One asks "Is that a $20 bill?" The other says, "Couldn't be. If it was, someone would have picked it up by now", and they move on.
In general, if something is common for decades and a plaintiff comes to claim it's illegal, the burden of proof is on the plaintiff. The defendant will be able to bring up previous court cases where the status quo was challenged and unmodified.
This has been done in the past regarding firearms law - “the law has stood for decades, so it must be constitutional.”
I find that reasoning specious, but it’s happened multiple times so it’s apparently accepted by at least a plurality of our judiciary.
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That said, I think most people are going to be disappointed regardless the outcome.
Markets aren’t created by god, they’re created by customers.
If you want to force the creation of an App Store market, one that customers aren’t actually asking for, it will need to be government-mandated.
If you think the EU or US knows how to create a utility market of app stores without completely fucking up competition, security, consumer experience, and enshrining Android and IOS as the “government sanctioned platforms” for 50 years, you are placing far too much faith in the power of regulation. It takes years to decades to get this right - no one has the answers, and governments aren’t great with uncertainty (see how policy and science mix!).
Laws move very slowly, especially with partisan gridlock. Do we really think these platforms have a 50 year lifespan? If not, it’s probably not worth regulating.
Be careful what you wish for.
> Judge Gonzalez Rogers did recommend, though, that the case be taken to a jury trial in July next year to settle these issues permanently. “It is important enough to understand what real people think,” said Rogers. “Do these security issues concern people or not?”
If Microsoft introduces wiOS (Or OS W?) in which you can only run applications you install through an app store, then users and developers will decide whether that's an experience they want and if it is, then an ecosystem will develop around it just as happened with Apple. If not, it will just be an expensive lesson for Microsoft while everyone remains on their preferred OS.
If it turns out all major OSes lock their users into app stores and there remains a significant market for users who don't want that experience, the market will be primed for another OS competitor to take that share.
No.
There are massive barriers to entry for some markets, particularly platforms, and it's naive to indicate that 'some competitor will come along'.
Many markets are 'locked down' to the point wherein there is very little competition among them, and high tech gives us many examples of that.
I'm curious to know what they plan to do with iPad OS though... the MacCatalyst and Swift UI strategy will be interesting to watch evolve in light of these challenges.
But Microsoft doesn't make hardware that's the only target for their desktop OS, so they don't have the market lock-in Apple does, nor could they claim the app store and the hardware they don't make are part of the same product for PCs running Windows.
In contrast? They already do this for the XBox Live store, where they are the sole online distribution channel for software running on the console they manufacture.
Second, why break up AT&T in 70s/80s, you know what you are getting into when you sing up a contract with them.
In relation to this lawsuit it's mostly the same, but in general it's way different. The iOS is not a gaming platform. While gaming consoles are purely for entertainment and mostly optional in almost everyone's life, phones are not. The iOS walled garden is a lot more like a Windows or Mac walled garden would be, if it existed, which would be horrible.
Phones are somehow not accepted as a general purpose personal computing platform, while they clearly are. I don't think Epic Games could reasonably sell that argument in their position, but it doesn't mean they are wrong.
Epic would be perfectly happy with a big-boy exemption for Fortnite that the "little devs" (who actually might be hurt by the 30% cut or "walled gardens") would never see. They're half owned by Tencent, which stands for everything wrong with exploitative F2P tactics and China's foot-in-the-door politics. I don't want them to win.
But Apple, of course, is clearly planning to cut off open platform development in favor of a single-store system, slowly creeping into macOS. Worse: Microsoft is learning from them and will clearly attempt to replicate any such system should they be successful, which would end up in something closer to a true monopoly.
It's kinda awful. I wish this wasn't two companies suing each other over creed but an actual investigation by a government agency for exploiting a monopoly position.
Want to put out some software and not pay the $99/year Developer Fee and still have a simple install process for your users? Good luck with that.
And the judge explicitly disagreed.