The Limited Times

Now you can see non-English news...

Epic Games vs. Apple: 1000 Davids vs. Goliath

2021-05-26T08:13:21.093Z


The attack by the game developer Epic Games against Apple's app store business model could fail. But the air for the company is getting thinner: The debate about its power is only just picking up speed.


Enlarge image

Tim Cook after his testimony in Oakland: Apple is confident of victory

Photo: BRITTANY HOSEA-SMALL / REUTERS

Yvonne Gonzalez Rogers staged the last day of the trial in the Epic Games against Apple case as a kind of gladiatorial fight.

Instead of the usual lengthy closing arguments, the judge let the opposing lawyers loose on each other in the Oakland courtroom.

For almost four hours, both sides fought for the upper hand: Is Apple a monopoly that parasitically enriches itself with successful apps like "Fortnite"?

Or, conversely, is Epic Games a free rider of the iPhone success who wants to avoid a fair fee?

Apple has a lot to lose in the process.

The company usually collects a commission of 30 percent on sold digital content from well-known app developers such as Epic Games.

The game company tried to bypass this levy on "Fortnite", whereupon Apple threw the popular online game from its app store.

If Epic Games' lawsuit is successful, that would be a severe blow to the iPhone manufacturer's business model.

Epic Games lawyers estimate that Apple's revenue from app store commissions totaled at least $ 20 billion in 2017 alone, while the company itself does not provide any figures.

Apple is also an issue in Washington

But even if Tim Cook can fend off the attack, it could be a Pyrrhic victory: Resistance to the market power of the world's most valuable company is growing and the outcome of the proceedings is being closely followed in Washington.

The US Congress has already held several hearings on the app practices of Apple and Google, which also operates an app marketplace with Google Play.

The Justice Department is also examining the payment model as part of an antitrust investigation against Apple.

The senator and former Democratic presidential candidate Amy Klobuchar has introduced a bill to facilitate action against overpowering corporations.

With a market share of over 50 percent for smartphones, Apple is the undisputed number one in the USA.

iPhone users can only download apps via Apple's App Store and every purchase made in apps is inevitably processed via Apple's payment system - and subject to commission for the developer.

It's like a car dealer charging a commission for every tank of fuel after the sale, the Epic Games lawyers argue.

Does Apple earn a disproportionate amount of money?

Tim Sweeney, the head of Epic Games, can be sure of the sympathy of many other software developers during his campaign against the rulers of Cupertino.

Apple earns more from the apps developed by other companies than they do themselves, claimed Sweeney.

Apple justifies its fee primarily with the security standards of the app store.

In addition, the company points out that other companies such as Sony and Microsoft also demand commissions of 30 percent from game developers.

Yvonne Gonzalez Rogers was also uneasy about the fact that Apple earned from in-app sales via the iPhone without being exposed to annoying competition. But after Apple boss Tim Cook had to put up with some unpleasant questions last week, the judge this time raised doubts about the position of Epic Games. It was the decision of the consumer to go to Apple's "ecosystem", she said. And when in the past was a company forced to change its business model because of a cartel violation?

Yvonne Gonzalez Rogers will now decide alone, there is no jury in the process.

Her original announcement to deliver the verdict by August 13th - the anniversary of the battle started by Epic Games - she describes as a joke on Monday.

You now have to work through thousands of documents.

For the time being, she paid tribute to both sides: the opponents had provided a "stunning example" of legal art.

It's not just about Apple

Many competition experts are skeptical as to whether the lawsuit will ultimately be successful, because the antitrust case law is rather restrictive.

Rebecca Haw Allensworth, an expert at Vanderbilt Law School, does not consider the outcome of the proceedings to be decisive.

Regardless of whether Epic Games wins or not, the lawsuit will draw attention to "the serious problem of market power that tech platforms have through their role as gatekeepers," she predicted at Bloomberg.

Criticism of the gatekeepers' overwhelming power is aimed not only at Apple, but also at other tech giants such as Alphabet, Amazon and Facebook.

They have all become rulers of digital marketplaces that hardly anyone can get past.

To rulers, whose abundance of power is increasingly viewed critically.

According to Allensworth, the legal situation has always changed slowly but steadily in the past. "If I were a big tech company, I'd be very worried that this would happen again."

Source: spiegel

All tech articles on 2021-05-26

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.