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Epic vs Apple trial wraps up - what's at stake

Peter Griffin, Contributor. 25 May 2021, 10:51 am

A three-week country case in the US between video gamer maker Epic and Apple over access to the App Store wrapped up yesterday and it could be weeks before a judgement is released.

Epic, which makes the wildly popular online game Fortnite, took Apple to court over its policies controlling access to the App Store, including anti-steering provisions that prohibit Epic from advertising via Apple's platform, alternative ways to pay for Fortnite.

Epic has bristled at Apple's monopoly over the App Store, where it takes a percentage of all revenue generated through the Fortnite app. Last year, Epic created a "hot fix" to bypass Apple's system for payments, which led to both Apple and Google removing Fortnite from its stores.

The current lawsuit will now determine whether Apple is judged to have engaged in anti-competitive practices and whether there should be any remedy for Epic. A crucial aspect of the judgement will be what exactly it applies to.

An epic tussle

Will it relate to mobile gaming or will, as Epic argues, it should apply to the entire app ecosystem, given that the same rules apply whether the revenue-generating app is a game, a productivity app or a music streaming service.

Apple argued in court that its 30% standard commission on App Store purchases generating revenue for developers of US$1 million or more, is fair and covers its intellectual property and research and development costs. In his closing statement yesterday, Apple's lawyer Richard Doren, said that forcing Apple to allow access to competing app stores on the iPhone, who essentially see Apple "drop its gloves and stand in the middle of the arena and take what comes without any meaningful defence".

Apple's CEO Tim Cook has argued that Apple created the App Store ecosystem and there are plenty of competitors, including the key rival in the Android world - the Google Play store.

But it remains the fact that Apple has complete control over which apps appear in the App Store and therefore on the iOS devices that make up a large part of Apple's world. Epic has argued that the iPhone should become more like Apple's Mac computers, which have an App Store as well, but allow the software to be freely downloaded outside of that store.

Apple's App Store has become the go-to trusted place for downloading apps due to Apple's strict quality control and security requirements. But Epic says that Apple could still vet apps downloaded outside of the App Store - just not clip the ticket on the revenue that is generated through them.

What does it mean for Kiwi developers?

The App Store is a direct route to consumers all over the world for Kiwi app developers seeking to go global. The most successful to date have mainly been game developers and the larger ones including PikPok and Rocketwerkz would be generating over US$ 1million in App Store sales and therefore paying Apple a 30% cut. Most developers would be under that threshold and paying 15%, which seems like a reasonable fee given the reach of the App Store. 

But developers, in general, are likely to favour any new court-ordered provisions that allow them more flexibility in how they market their apps - and direct consumers in how to pay for them.

The court case, which may well be subject to appeals regardless of the outcome, could set a precedent for how the massive app economy is controlled and regulated. 

Judge Yvonne Gonzalez Rogers certainly has her work cut out for her.

 


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