Epic Games faces Apple on final day of legal battle over monopoly claims –

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Epic Games faces Apple on final day of legal battle over monopoly claims – fr



Lawyers for Apple Inc.

They began to debate a familiar topic: how to define the market at the heart of the matter. Epic would like U.S. District Judge Yvonne Gonzalez Rogers to view iPhone app distribution as the market, while Apple has pointed out that there are many competing devices out there.

“The problem here is the monopoly they have on distributing apps on this platform,” said Gary Bornstein, an attorney for Epic. “There is no path to this platform other than the one they control which has led to less innovation and higher prices. ”
Judge Gonzalez Rogers will rule on Epic’s claim that Apple has improperly banned third-party app stores on the iPhone and is forcing app developers to use its in-app payment system which takes a commission of up to at 30%.

Apple denied that it was a monopoly, indicating other means of distributing Epic’s game “Fortnite”. The company said its app store policies ensure app security and reliability for users. Apple has argued that its fees are similar to others and that Epic is just trying not to pay its fair share.

Instead of the traditional closing arguments held in front of a jury, the judge had asked both sides to prepare for a debate-style end to the trial which lasted more than three weeks in Oakland, Calif.

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She immediately began probing their arguments, suggesting that Epic’s view of the market and its surrogates could hurt consumers as they choose a particular digital ecosystem, such as Apple’s iOS operating system, knowing that it these are enclosed gardens. “Your economic surrogates are destroying this consumer choice,” she said. Also, she wondered why the market shouldn’t be defined as mobile games.

Before Monday, the judge gave each party a list of topics they wanted to learn more about and asked them to prepare to talk about potential remedies. She has previously touched on the idea of ​​letting app developers provide a link or notify app users that they could go to find cheaper ways to pay for purchases outside of the Apple system, which is currently. prohibited by the company’s app store rules.

“I’ll let you all lead the conversation,” Judge Gonzalez Rogers told lawyers on Friday. “I’m going to push you faster through topics that are less of a concern, and I’ll be spending more time with you on things that, you know, I’m debating right now. “

The judge did not hesitate to intervene during the proceedings with his own questions to witnesses, including directly questioning Epic and Apple CEOs Tim Sweeney and Tim Cook, respectively.

Her pointed questions to Mr. Cook on Friday surprised some close observers, as well as her statements suggesting that she found parts of Apple’s business uncompetitive, such as its integrated payments system. That doesn’t mean she’s made up her mind.

She told lawyers she wanted to know more about the matter.

Apple defended its 30% commission on Monday. “This commission rate was not created by Steve Jobs,” Apple lawyer Dan Swanson said of the late co-founder of the company. The price came from what was found on a digital video game distribution platform called Steam and was cheaper than what was found in physical stores at the time, Mr Swanson said.

Mr Bornstein, Epic’s attorney, replied that there was no evidence Apple felt price pressure from the competition.

“It’s a dynamic market,” said Judge Gonzalez Rogers. “Things are changing quickly. I have a snapshot. We are at one point in a moving current, so understanding your perspective on the role of the court in this dynamic environment would be interesting for me.

Apple’s stock market value hit a new high in 2020, but its long-standing disputes with app developers are boiling in public view. WSJ explains why top companies like Epic Games, Spotify, and Tinder are at odds with App Store rules. Video / illustration: Jaden Urbi / WSJ (Video of 01/10/20)

The judge said it would take her several weeks to deliver a verdict, joking that she hoped it could be done before August 13 – Epic’s first anniversary launching a sophisticated campaign to challenge Apple’s power that has landed on both sides in his courtroom this month. .

On this date, a year ago, Epic introduced an integrated payment system in “Fortnite” aimed at bypassing Apple’s system and breaking its rules. The game was quickly kicked from the App Store and, in turn, Epic took legal action against Apple. The case centers on the themes of online platforms and digital commerce which are hotly debated by lawmakers and regulators around the world.

Apple loss threatens a key part of Mr. Cook’s strategy to diversify the business after seeing iPhone sales stagnate in recent years.

But winning an antitrust case in the United States has always been difficult for plaintiffs; In recent years, courts have given more leeway to corporate practices through a narrower reading of antitrust laws.

Epic must convince the judge that their definition of the market is correct. It must also show that Apple’s policies are causing antitrust damage and that the practices are not benefiting the consumer.

Apple has spent a lot of time justifying its ban on third-party stores by arguing that it protects users and stating that its app review process helps ensure security and reliability.

Epic countered that the security concerns were overblown, arguing that a third-party store could provide equal protection and that iPhone’s security is rooted in its operating system. The two sides have presented conflicting testimonials on the security of the iPhone.

During Friday’s proceedings, the judge turned to Mr Cook and questioned him directly about it. “Mr. Cook, what do you think of third-party data? ” she asked. “You personally, the difference. “

He told the judge that the data shows 1% to 2% of malware is found on iPhones. “It’s quite a difference,” he said.

Write to Tim Higgins at [email protected]

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