Just a week away from Epic Games vs. Apple court trial, the Cupertino tech giant has filed testimonies of experts substantiating its argument against the gaming company. Epic has accused the iPhone maker of creating a monopoly by controlling the payment distribution methods of its App Store, and of unfairly charging a 30% share cut for all in-app purchases. The developer is seeking the court to allow it to push a direct payment method for its iOS gaming app Fortnite so Epic does not pay Apple App Store’s commission. Apple has categorically denied all allegations and the new filing reveals the company’s line of argument.
The newly filled 257 pages document includes testimonies from expert professors of computer security, antitrust, economic, marketing and law. Based on an assessment of the market, laws, and other facts and figures, professors’ opinions find Apple’s digital market a conducive place to do business and its App Store commission rate just, as per market standard. Here is a brief account of their expert opinion.
Apple expert witnesses testify that its digital market place is not a monopoly
As summarised by MacRumors, a survey conducted by Dominique Hanssens, UCLA Professor of Marketing, reveals that most iPhone and iPad owners use other devices to play digital games like consoles. Therefore, Apple does not have a monopoly in the gaming market.
“Results of my first survey show that 92 percent of respondents who downloaded apps from the App Store had regularly used at least one other type of device (i.e., devices other than iPhones and iPads) with which they could access digital gaming content, in the last 12 months. Further, 99 percent of respondents in the first survey had regularly used or could have regularly used at least one other type of device (i.e., devices other than iPhones and iPads) with which they could access digital gaming content, in the last 12 months.”
Dean Francine Lafontaine, Professor of Economics at the University of Michigan, said that developers can use Safari as an alternative to avoid paying in-app purchases’ share cut.
“Even the rare consumer who has access to only an iOS device has a readily available game transaction alternative to the App Store–the Safari browser. For example, any Fortnite player can use Safari (or Chrome) to purchase Fortnite’s in-game currency, ‘V-Bucks,’ a transaction that generates no commission for Apple.”
Lorin Hitt, Professor in Operations, Information, and Decisions at the University of Pennsylvania, defend the App Store’s 30% commission rate by arguing that it is the industry standard rate.
“My market share calculations support the conclusion that Apple does not have market or monopoly power in a properly defined market. Apple’s share of the digital game transaction market lies between 23.3% and 37.5%. In light of my conservative approach, these market share estimates, especially at the high end, are likely to overstate Apple’s true market share and are, in any event, inconsistent with Apple having substantial market power. The entry of new game transaction platforms is also inconsistent with Apple having market power.”
Last but not the least, Aviel Rubin, Information Security Institute technical director at Johns Hopkins University, elaborates the importance of Apple’s app review process to ensure security on the platform. However, Epic is going to bring up scam apps on the App Store to debunk Rubin’s testimony.
“The introduction of third-party app stores for iOS would decrease iOS security, safety, and trustworthiness, as evidenced by the cases of Google and statistics indicating that third- party app stores host 99.9% of discovered mobile malware… Irrespective of whether they would be able to or intend to achieve the same security goals, the reality is that they could not. Moreover, there is no guarantee that all, or even most, third-party app stores would commit to upholding user security and privacy and intend to achieve such security goals, particularly if those standards come at the expense of efficiency and revenue.”
In addition to key experts, Apple CEO Tim Cook, Apple Fellow Phil Schiller, and its software engineering chief, Craig Federighi at the trial. This legal battle began in 2020, when Epic Games push a direct payment update on its iOS gaming app, Fortnite, and later filed a lawsuit against Apple when it removed the app for violating its App Store rules. Read the complete document here.
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