Last May, Epic Games planned to break Apple’s and Google app store rules and will eventually sue them in cases that could reshape the entire app economy and have impact. Insight to antitrust investigations worldwide.
Epic CEO Daniel Vogel sent other executives an email raising concerns: Epic had to convince Apple and Google to give in to their requests for looser rules, he wrote, “otherwise we look like the bad guys.”
Vogel warned Apple and Google “will see this as an existential threat”. In preparation, Epic has devised a marketing and public relations plan to engage the public behind the campaign against the tech giants.
Apple detained that plan in a federal courtroom in Oakland, California, on Tuesday, the second day of the trial expected to last three weeks stemming from Epic’s claim that Apple relies on control. Control your App Store to unfairly squeeze money out of other companies.
Northern County District Judge Yvonne Gonzales Rogers, who will decide the case, also asked Epic’s chief executive, Tim Sweeney, a series of questions about its potential consequences. She asked if he knew anything about the economics of other types of applications, including food, maps, GPS, weather, dating or instant messaging.
“So you don’t know how what you’re asking for will affect any of the developers involved in those other categories of apps, do you?” the judge asked.
“Personally, I don’t,” said Mr. Sweeney, on his second day in the witness stand.
Apple’s attorneys argued that Epic hacked the App Store fees to boost the slowing business. Total revenue on Fortnite, Epic’s flagship video game, has declined in the last three quarters of 2019 compared to 2018, according to an Epic presentation to the board of directors on its plans to counter Apple. The presentation was released in court on Tuesday, along with emails from executives.
Under questioning from Apple lawyers, Mr. Sweeney said Epic’s own game store is not expected to be profitable until at least 2024.
Epic lawyers said the lawsuit is not just about Epic and Fortnite but about fairness for all apps that must use Apple’s App Store to reach consumers.
Katherine Forrest, attorney at Cravath, Swaine & Moore, said: “Our argument in this case is that all applications have problems.
Epic does not ask for payment if it wins the trial; it is seeking relief in the form of changing App Store rules. Epic has asked Apple to allow app developers to use other methods to collect payments and open their own app store in their apps.
Apple has countered that these requests will give rise to a world of new problems, including making the iPhone less secure.
On Tuesday afternoon, Benjamin Simon, the founder of Yogaosystem, the app maker Down Dog Yoga, testified of his company’s problems with Apple’s policies. Simon said he had to charge extra for App Store subscriptions to compensate for the 30% fee Apple charged him, and that Apple’s rules prevented him from advertising inside his app a price. Cheaper is available on the web.
Simon said Apple warned app developers not to talk about their policies in guidelines for their apps to be approved. “If you run to the press and throw trash to us, it doesn’t help,” he said. “It’s in the instructions.”