Following the submission of Apple’s own expert testimony in its legal battle with Epic Games, Epic has now submitted its own written expert testimony ahead of the start of its antitrust case against Apple
As reported today, Epic Games has sought the opinion of several different experts, mostly to lat out the case it plans to argue in court. The company sought the informed opinion of experts who would solidify its case against Apple by shedding light on its alleged monopolistic conduct. Not only does the report say Apple’s App Store operates in a monopolistic manner, but experts also note that the tech giant gives its own competing apps an unfair advantage.
Epic Games files its own expert testimony against Apple
Dr. David Evans is from the University College London says that while it is possible to switch from one platform to another, a decision to switch OSs may not be ideal for most consumers. That is because an iOS user who switches to Android, or vise versa, would be required to purchase the apps on the new platform separately.
iOS and Android users make sunk cost investments in hardware, software, and learning for their respective ecosystems. A decision to switch OSs is a decision to move ecosystems, meaning consumers would lose the value of these investments and have to make new ones. These costs reduce consumers’ incentive to switch.
Evans also notes how a significant majority of Fornite players choose to play only on one platform, with a small minority opting to use a different platform. Epic Games argues that by denying Fornite players the option to play on iOS, the Cupertino tech giant is restricting that availability completely for players who do not or cannot use gaming consoles to play.
Most Fortnite users play all or nearly all of their game minutes on a single platform. Of accounts with positive all-time game minutes, 82.7% have played Fortnite on only a single platform. The same pattern holds among players who use iOS as their primary platform—90.9% of those players have only used iOS.39 This means there are basically two types of players who used the iOS Fortnite app: those who predominantly used iOS, and those who predominantly used game consoles and personal computers but occasionally used the iOS app. Neither type of player engages in material substitution between playing Fortnite on their iPhones and playing on another device.
Stanford Economics of Technology professor Susan Athey stated that there is no truth to Apple’s claim that a single app store on iOS is essential for the security of users and the platform as a whole.
My expert opinion is that iPhone security is in fact significantly independent of the review process and the distribution channel (however they may be implemented). Thus, my expert opinion is that Apple considerably overstates the security benefits of its centralized App Store model. Apple is justified in caring about the security of its users; however, an iPhone’s security guarantees are predominantly enforced by the iPhone’s operating system, not by Apple’s App Store and the associated review process.
Georgia Institute of Technology professor Wenke Lee built upon this argument by stating that Apple could simply sign developer certificates the way it does for Mac apps.
I have evaluated the iOS security model based on Apple’s own stated goals and processes for enforcing security on iOS. My analysis led me to conclude that … the same security features Apple seeks to enforce on iOS can be achieved without the need for exclusive distribution. For instance, third parties could perform the same security screening steps taken during App Review, and Dr. Rubin does not dispute this. Third parties can also perform developer identity verification and code signing. Most importantly, all of the on-device mechanisms that enforce security on iOS are independent of the app distribution model.
Dr. Michael Cragg from economic consulting firm The Brattle Group addressed Apple’s claim that app developers who do not like the company’s policies are free to create apps for other platforms. Cragg said that iOS is such an important platform that this suggestion is not at all realistic.
Developers are highly dependent on App Store revenue, and Apple has significantly more bargaining leverage than any individual developer. As such, Apple’s Experts are wrong to claim that developers can switch in sufficient numbers to serve a competitive constraint on Apple.
Epic Games and Apple’s bench trial begins on Monday, May 3, 2021. The legal battle between the two companies 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 App Store rules.