The Epic vs Apple trial is wrapping up, but the battle has just begun
For now it's full send... but what will things look like when the smoke clears?
It’s almost over. On Monday, Epic Games and Apple wrapped up their arguments in the high-stakes bench trial taking place in Oakland’s Federal Court.
The previous three weeks demonstrated what happens when two companies with market capitalizations the size of nation states try to use the legal system to fundamentally shape their opponent’s business model. Ugly? Yes.
In the case of Epic, it wanted to weaponise the force of the US judicial system to change the way developers distribute and monetise software on the iOS App Store.
The move on 13 August that kicked this all off was the activation of "allegedly hidden code in Fortnite allowing Epic Games to collect in-app purchases directly" via its "Fortnite Mega Drop", which meant Apple couldn't get its traditional 30 per cent cut. It duly booted the developer out of the store. Later that day Epic filed its initial complaint [PDF], alleging Apple was abusing its dominant position by seeking to "control markets, block competition, and stifle innovation."
Apple, for its part, hit back a week later, alleging [PDF] Epic orchestrated its own banning as part of a plan to plug its own service and get out of giving Apple its commission, saying "Epic’s plan was to violate the agreements intentionally in order to manufacture an emergency."
It also filed a counterclaim alleging breach of contract in September.
For years, Epic had tired of giving Apple 30 per cent of the revenue it generated on the App Store — a practice Sweeney had characterised as rent-seeking. While the company has attempted to re-brand its fight as a crusade for all developers, with some support, it nonetheless stands to benefit from a win.
Apple entered the melee from a fundamentally defensive position. Company execs — like its CEO Tim Cook and Apple Fellow Phil Schiller — were summoned to the stand and forced to justify its policies.
We heard Schiller defend iOS's locked-down nature as necessary for user security. Craig Federighi, Apple's SVP of Software Engineering, was forced to concede that MacOS has a malware problem. Cook was grilled — extensively — about whether the 30 per cent commission exacted from large developers was justified.
That’s not to say Apple didn’t land a few body blows itself. It strived to portray Epic Games as greedy, aiming to get the benefits of the iOS app store but without paying towards it.
We also learned how much Epic’s teen-classic Fortnite earned from the iOS store alone — $700m in the two years leading up to its ban. Schiller brought up various ecosystem features, like Apple’s Metal API, which it argued was essential to Epic Games’ success in the mobile gaming sphere.
And Tim Sweeney, Epic Games’ co-founder, was portrayed as capricious. We heard how Apple’s leadership was “blindsided” when they learned Epic had snuck an unauthorised payment system into Fortnite, after what was previously a productive and cordial working relationship.
All wars are ugly, inlcuding legal ones. Here, the opposing sides have the power of discovery.
It was through this process we saw the inner machinations of Apple’s leadership team, gaining a level of transparency. We witnessed, in stark language, how Apple saw its locked-down content marketplaces as tools to prevent customers from switching to Android.
For now, the lawyers can rest easy. The burden of judgement rests on Judge Yvonne Gonzalez Rogers' shoulders.
Judge Rodgers must weigh up whether Apple’s ironclad control of the iOS platform is justified, or whether it constitutes an abuse of monopoly power. If she agrees with Epic Games’ arguments, what are the appropriate remedies? Can Apple loosen its grip without risking user safety or privacy?
If she finds in Apple’s favour, Epic will be forced to turtle, and ponder its next step. Does it try to repair its shattered relationship with a rival? Or does it continue the crusade, leading a quixotic fight across appeal courts and statehouses?
The arguments may be over, but the fight has just begun. ®