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Epic against Apple / Google

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Federal District Judge Yvonne Gonzalez Rogers heard arguments this morning regarding Epic's request for an injunction in its case against Apple. That arrangement would force Apple to put Fortnite back on the iOS App Store during testing after the game was removed last month because Epic bypassed Apple's in-app purchase rules.

The hearing gave the clearest indication yet of the best arguments of either party on the matter and of what positions Rogers appears most likely to influence as the case moves towards full trial.

When is a monopoly not a monopoly?

A key issue in this case is Epic's claim that Apple's exclusive control of the iOS App Store is an illegal monopoly that hinders competition. Today's discussion of Epic's claim has been heavily focused on which market Apple is allegedly monopolizing.

Apple argued that iOS is just one of many platforms in the broader competitive video game market like Fortnite. There, Apple faces competition from console manufacturers, PC-based businesses like Steam and GOG, and Google's Android platform, to name a few. In this market, Rogers himself found that most competing platforms charge developers the same 30 percent fee as Apple, suggesting that iOS has no harmful market-controlling power.

Epic's attorney, Gary Bornstein, argued in response that the market in question should not simply be viewed as "all of the ways someone can reach a user to play a video game". Where Apple has the monopoly, it is in the market for developers to sell their game specifically to iOS users.

"So that Apple can face the competitive discipline (from the market), a significant number of developers would have to give up the platform if Apple increases the price," argued Bornstein. "We know it isn't. You are not going to give up the opportunity to reach a billion users."

<img alt = "Apple argues that Fourteen daysThe availability on platforms like the Switch shows that it has no monopoly control over the mobile game market. "src =" https://cdn.arstechnica.net/wp-content/uploads/2020/09/fnswitch-1- 640×360.jpg "width =" 640 "height =" 360 "srcset =" https: // cdn .arstechnica.net / wp-content / uploads / 2020/09 / fnswitch-1-1280×720.jpg 2x”/>Enlarge /. Apple argues that the availability of Fortnite on platforms like the Switch shows that Fortnite has no monopoly control over the mobile game market.

This is an important distinction that Epic must legally make. There is existing case law that states that a company can have monopoly control of a secondary market (in this case app downloads) even if there is competition in a broader market (in this case video game and / or smartphone hardware) is exposed. However, proving this case is an uphill battle that usually requires proving that customers are wrongly "tied" to that secondary market after the primary purchase.

63 percent versus 10 percent

At the hearing, Bornstein stated that "63 percent of iOS users who play Fortnite only play on iOS". These players are not technically "tied" to iOS – they could, and many do, switch to another platform. But they also don't necessarily have multiple devices to play with and may not be able to afford separate hardware to access Fortnite, he said.

Even if iOS players have access to other hardware, the situations are not always analogous, according to Bornstein. "That means there is no (monopoly) market for ridesharing and taxis when people can walk or bike or get a friend to drive them or use public transport," he said. "You can't play an Xbox when you're on a bus." (Though you can play a switch, as Judge Rogers stated in response).

Apple attorney Richard Doren said the number of iOS Fortnite players not using other platforms is negligible. Instead, he cited the claim made by Epic co-founder and CEO Tim Sweeney that less than 10 percent of the average daily Fortnite users played on iOS. This shows that "Epic itself is taking advantage of the (alternative) options in the market that are available to it" and that Apple cannot exercise monopoly control over Epic's Fortnite business.

"Fortnite is not entitled to access to everyone in the world," said Doren. "You just need alternatives (to iOS), and they have that in spades."

In her testimony, Judge Rogers seemed more inclined to assess Apple's position in the broader video game market. "If we look at this plaintiff and the industry, walled gardens have been around for decades," she noted. "Nintendo had a walled garden. Sony had a walled garden. Microsoft had a walled garden … In this particular industry, what Apple does is not much different … It's hard to ignore the economics of the industry. That is what Epic is asking for. "

Aside from Fortnite, Judge Rogers also said she was inclined to agree with Epic's claim that "there is an uproar in the market over the lack of competition for (distribution of) iPhone apps. You read the papers, I read the papers, it is There." However, Judge Rogers also suggested that this particular case may not be the right one to make this argument "given the fierce competition for mobile games".


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