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Epic Games confronts Apple on the final day of a court battle over monopoly claims

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Apple Co., Ltd.

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And on Monday, Epic Games Inc. began closing arguments to judges to determine if iPhone makers have unfair exclusivity that would hurt third-party software developers.

They started discussing familiar topics: How to define a market In the center of the case. Epic wants Judge Yvonne Gonzalez Rogers of the US District Court to consider distributing the app on the iPhone as a market. Meanwhile, Apple emphasized that there are many competing devices.

“The problem here is that we monopolize the distribution of apps to that platform,” said epic lawyer Gary Bornstein. “There is no way to go to that platform other than the one they manage, which has led to lower innovation and higher prices.”

Judge Gonzalez Rogers ruled Epic’s allegation that Apple improperly banned third-party app stores on the iPhone and required app developers to use an in-app payment system that costs as much as 30%. ..

Apple denied it was a monopoly, Shows other ways you can distribute the Epic game “Fortnite”. The company states that app store rules ensure the safety and reliability of apps for users. Apple claims that the price is similar to everyone else, and Epic is just trying to get out of fair share payments.

Instead of traditional closing arguments in front of the jury, the judge urged both sides to prepare for the end of a more than three-week trial debate in Oakland, California.

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She soon began scrutinizing their debate, and Epic’s view of the market and its alternatives is that certain digital ecosystems, such as Apple’s iOS operating system, know they are a walled garden. Suggested that it could hurt consumers to choose. “Your financial alternative destroys that consumer’s choice,” she said. In addition, she wondered why the market should not be defined as a mobile game.

Before Monday, the judge gave them a list of topics she wanted to hear more on both sides and instructed them to be ready to talk about potential remedies. She’s already had the idea of ​​letting app developers provide links and letting in-app users know that they can leave to find a cheaper payment method for purchases outside the Apple system. I raised it. This is currently prohibited by the company’s App Store rules.

Judge Gonzales Rogers told lawyers Friday, “I will encourage all of you to have a conversation.” “I push you faster through less interesting topics, and as you know, spend more time with you about what I’m discussing right now.”

The judge is shy to chime in the process with her own questions for witnesses, including investigating both Epic and Apple CEOs Tim Sweeney and Tim Cook, respectively. It wasn’t a shop.

Her keen question to Mr Cook On Friday, it surprised some close observers with her statement suggesting that some of Apple’s businesses, such as in-app payment systems, are uncompetitive. That doesn’t mean she’s decided.

She told the lawyer that she wanted to hear more about the matter.

On Monday, Apple defended a 30% commission. “The fee rate wasn’t created by Steve Jobs,” Apple lawyer Dan Swanson said of the company’s late co-founder. Prices came from what was found on a digital video game distribution platform called Steam, which was cheaper than what was found in physical stores at the time, Swanson said.

Bornstein, Epic’s lawyer, said there was no evidence that Apple was under pressure to price from competition.

“This is a dynamic market,” said Judge Gonzales Rogers. “Things are changing rapidly. There are snapshots. We are moving at some point, so it’s interesting to me to understand what your perspective will be about the role of the court in that dynamic environment. That is. “

Apple’s stock market value set a new record in 2020, but long-standing controversies with app developers are visible to the general public. The WSJ explains why well-known companies such as Epic Games, Spotify, and Tinder are in conflict with App Store rules. Video / Illustration: Jaden Urbi / WSJ (Video from 10/1/20)

The judge said it would take weeks to make a verdict and joked that he hoped it could be done by August 13. ..

A year ago that day, Epic introduced an in-app payment system on Fortnite with the goal of circumventing Apple’s system and violating its rules. The game was immediately kicked out of the app store, then Epic filed proceedings against Apple.. The case focuses on online platform and digital commerce themes that are being hotly debated by lawmakers and regulators around the world.

Apple’s losses threaten an important part of Cook’s strategy to diversify its business after seeing the recent stagnation of iPhone sales.

However, winning antitrust proceedings in the United States has traditionally proven to be difficult for plaintiffs. Courts in recent years have given more freedom to corporate practices through a narrower interpretation of antitrust law.

Epic needs to convince the judge that the definition of the market is correct. We must also show that Apple’s policies harm antitrust laws and that practices do not benefit consumers.

Apple has spent a lot of time justifying the ban on third-party stores by claiming to protect users and pointing out the app review process as helping to ensure security and reliability.

Epic argued that security concerns were exaggerated, Claim that third-party stores can provide equal protection And the safety of the iPhone is rooted in its operating system. Both sides provided conflicting testimony regarding iPhone security.

During the procedure on Friday, the judge turned to Mr Cook and asked him directly about it. “Mr. Cook, what do you think the third-party data shows?” She asked. “You personally make a difference.”

He told the judge that the data showed that 1% to 2% of the malware was on the iPhone. “That’s a big difference,” he said.

Write to Tim Higgins Tim.Higgins@WSJ.com

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Epic Games confronts Apple on the final day of a court battle over monopoly claims

Source link Epic Games confronts Apple on the final day of a court battle over monopoly claims

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