By Natalie DeCoste
The first week of the highly anticipated antitrust legal battle between Epic and Apple has ended, and the trial is already providing insight into previously unknown corporate relationships.
Epic Games sued Apple in August of 2020, accusing the tech giant of engaging in monopolistic behaviors when Apple pulled Epic’s game Fortnite from its App Store. Apple had removed Fortnite from its App Store after Epic added a direct payment option to Fortnite to circumvent the 30% cut that Apple takes from all digital transactions.
Now, with the first week of trial finished, many critiques of Apple’s business practices have been dragged into the light.
Epic spent much of the first day of trial painting a picture of Apple and its App Store as a monopolistic and anti-competitive ecosystem that fails to offer consumers the benefits it claims to provide. Epic referred to the way that Apple runs its business as a “walled garden” and brought forward several internal emails detailing how the company built said garden.
“To justify its walled garden, Apple needed to convince those locked in and those locked out that the wall served some higher purpose, something more than profitability—and so Apple security justification was born,” said Katherine Forrest, a lawyer for Epic.
Apple has continuously refuted these claims and insisted that its business model ensures users will have a safe, private, and reliable place to download software.
“Epic is here demanding that this court force Apple to let into its App Store untested and untrusted apps in app stores, which is something that Apple has never done. Apple’s unwavering commitment to safety, security, reliability, and quality does not allow that, and the antitrust laws do not require it,” said Karen Dunn, a lawyer for Apple.
One of the major takeaways from the first week was the nature of Apple’s negotiations with app developers. These negotiations revealed that while Apple did not compromise on what is allowed on its store, it did offer front-page placement, coordination, and publicity through Apple product launches, access to exclusive programming features, and direct outreach to senior executives.
One of the significant negotiations that came to light was between Apple and Netflix. In 2018, an Apple manager met with employees at Netflix and wrote an email to his colleagues summarizing the meeting. The email detailed how Netflix ran a test to see if it could stop accepting in-app purchases on Apple products to circumvent the 15% to 30% commission to Apple. The test raised questions about whether Apple should take “punitive measures,” such as ceasing to promote Netflix on the App Store or escalating concerns to Netflix executives.
Ultimately, Netflix discontinued new subscriptions through Apple in December 2018, allowing it to bypass Apple’s cut on in-app purchases, but not until after Apple had offered the company significant incentives to keep the feature, like promotion of the Netflix app on the App store.
Epic also attempted to paint Apple’s policies as onerous restrictions by claiming Fortnite is more than just a game but a digital experience.
Meanwhile, Apple tried to downplay its reach by claiming its iPhones and iPads are just two devices out of many on which Fortnite can be played. The company pointed to the Sony Playstation, Microsoft Xbox, Nintendo Switch, and Google’s Android system as other venues for people to play Fortnite.
Other highlights from the trial included an in-depth look at Apple’s App Store review process, the process surrounding the launch of Microsoft Office starting in 2012, and Facebook and Apple’s strained relationship.
