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Apple's app store goes on trial in threat to 'walled garden'

Apple faces one of its most serious legal threats in recent years in a federal trial that begins today. Epic Games, maker of the video game Fortnite, says Apple's app store is an illegal monopoly that squeezes mobile apps for a slice of their earnings.

5/3/2021 4:45:00 PM

Apple faces one of its most serious legal threats in recent years in a federal trial that begins today. Epic Games , maker of the video game Fortnite, says Apple's app store is an illegal monopoly that squeezes mobile apps for a slice of their earnings.

SAN RAMON, Calif. (AP) — On Monday, Apple faces one of its most serious legal threats in recent years: A trial that threatens to upend its iron control over its app store, which brings in billions of dollars each year while feeding more than 1.6 billion iPhones, iPads, and other devices. The federal court case is being brought by Epic Games, maker of the popular video game Fortnite. Epic wants to topple the so-called “walled garden” of the app store, which Apple started building 13 years ago as part of a strategy masterminded by co-founder Steve Jobs . Epic charges that Apple has transformed a once-tiny digital storefront into an illegal monopoly that squeezes mobile apps for a significant slice of their earnings. Apple takes a commission of 15% to 30% on purchases made within apps, including everything from digital items in games to subscriptions. Apple denies Epic’s claims.

SAN RAMON, Calif. (AP) — On Monday, Apple faces one of its most serious legal threats in recent years: A trial that threatens to upend its iron control over its app store, which brings in billions of dollars each year while feeding more than 1.6 billion iPhones, iPads, and other devices.

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The federal court case is being brought by Epic Games, maker of the popular video game Fortnite. Epic wants to topple the so-called “walled garden” of the app store, which Apple started building 13 years ago as part of a strategy masterminded by co-founder Steve Jobs.

Epic charges that Apple has transformed a once-tiny digital storefront into an illegal monopoly that squeezes mobile apps for a significant slice of their earnings. Apple takes a commission of 15% to 30% on purchases made within apps, including everything from digital items in games to subscriptions. Apple denies Epic’s claims. headtopics.com

ADVERTISEMENTApple’s highly successful formula has helped turn the iPhone maker into one of the world’s most profitable companies, one with a market value that now tops $2.2 trillion.Privately held Epic is puny by comparison, with an estimated market value of $30 billion. Its aspirations to get bigger hinge in part on its plan to offer an alternative app store on the iPhone. The North Carolina company also wants to break free of Apple’s commissions. Epic says it forked over hundreds of millions of dollars to Apple before it expelled Fortnite from its app store last August, after Epic added a payment system that bypassed Apple.

Epic then sued Apple, prompting a courtroom drama that could shed new light on Apple’s management of its app store. Both Apple CEO Tim Cook and Epic CEO Tim Sweeney will testify in a Oakland, California federal courtroom that will be set up to allow for social distancing and will require masks at all times.

Neither side wanted a jury trial, leaving the decision to U.S. District Judge Yvonne Gonzalez Rogers, who already seems to know her ruling will probably be appealed, given the stakes in the case.Much of the evidence will revolve around arcane but crucial arguments about market definitions.

Epic contends the iPhone has become so ingrained in society that the device and its ecosystem have turned into a monopoly Apple can exploit to unfairly enrich itself and thwart competition.Apple claims it faces significant competition from various alternatives to video games on iPhones. For instance, it points out that about 2 billion other smartphones don’t run iPhone software or work with its app store — primarily those relying on Google’s Android system. Epic has filed a separate case against Google, accusing it of illegally gouging apps through its own app store for Android devices. headtopics.com

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ADVERTISEMENTApple will also depict Epic as a desperate company hungry for sources of revenue beyond the aging Fortnite. It claims Epic merely wants to freeload off an iPhone ecosystem in which Apple has invested more than $100 billion over the past 15 years.

Estimates of Apple’s app store revenue range from $15 billion to $18 billion annually. Apple disputes those estimates, although it hasn’t publicly disclosed its own figures. Instead, it has emphasized that it doesn’t collect a cent from 85% of the apps in its store.

The commissions it pockets, Apple says, are a reasonable way for the company to recoup its investment while financing an app review process it calls essential to preserving the security of apps and their users. About 40% of the roughly 100,000 apps submitted for review each week are rejected for some sort of problem, according to Kyle Andeer, Apple’s chief compliance officer.

Epic will try to prove that Apple uses the security issue to disguise its true motivation — maintaining a monopoly that wrings more profits from app makers who can’t afford not to be available on the iPhone.But the smaller company may face an uphill battle. Last fall, the judge expressed some skepticism in court before denying Epic’s request to reinstate Fortnite on Apple’s app store pending the outcome of the trial. At that time, Gonzalez Rogers asserted that Epic’s claims were “at the frontier edges of antitrust law.” headtopics.com

The trial is expected to last most of May, with a decision to come in the ensuing weeks. Read more: The Associated Press »

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Whats funny is if you ask tech people if they like apple and you get a universal no, with a good variety of reasons. You ask tech bros and they all love apple... for some reason? Raze them to the ground, Epic Games. I beg of you, lay waste to the tyrant, it must be dealt with. Smote it's ruin upon the mountainside.

Apple stans inc. ahahahha gonna be fun to watch apple slap epic around and teach it who's Daddy. Epic is one to talk about monopolies. That company absolutely is a monopoly, a monolithic company and one that doesn't give two shits about their employees or their customers and their leadership will do everything possible to fuck you over. And they'll do it with a smile. And the exact same can be said about Apple.

But you don't need an app store to download fortnite you can download from Epic site. i hope epic win then maybe google and Microsoft will be next The only reason epic is doing this is because they don't want to pay apple any royalties for in app purchases. This boils down to money and that's it. Epic wants as much as they can get and so does apple. Epic thinks because they have fortnite they can do what they want

I mean... if you don’t like apples platform you switch to google play or something else. It’s not a monopoly if it’s run by them and you don’t like that. There are other options. Yeah, a threat of a lot of lawyers making a lot of money.

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Theres no way epic wins this when its stated in the terms of service before putting an app up on the app store lol Can’t wait to see the final result of this in 60 years when it settles out of court 😩🙏🏽 Lovely, we have two greedy tech giants going after each other!!!! L Don't they agree to the 30% cut? Or however much it is.

......and so Epic Games which actively steals devs by offering them tons of money to release solely on the Epic Games Store is......? nesgamer85 trial starts today Not wrong 😑 👀👀 Androids (Samsungs) are better than IPhones

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Apple is a private company This is interesting as they both have heavy fan bases, many of which likely overlap. IDK, do the kids like Apple? Fortnite seems popular, especially with the younger crowd. Epic is tryna milk this trial tbh Apple is not a monopoly when there are other platforms around. It's a choice to stay on apple’s platform to get to a broader parameter of customers. Pick your poison they say.

Epic Games is a corporate money making machine at this point and Fortnite just needs to stop but if they win this, it could actually be beneficial to a lot of companies Apple is the 4th row y’all They're free to stop using Apple..... Epic tryna make waves rip not happening to be fair, it does suck that, unlike with apple's desktop computers, you can't just install whatever you want on an iphone out of the box

thank u capitalism very cool It’s almost as if they’re giving app developers a platform to distribute their products 😱 How dare they ask for compensation!?

Apple may win a court battle but lose a regulatory warEpic Games accuses Apple of having abused its dominance when it kicked Fortnite off the app store last year It’s about money. Everything is... barf

This is peak absurdity. Apple created their App Store, their platform. It's THEIRS? If Fortnite wants to use the user base Apple created then they pay the same price as everyone else just as every other platform charges a percentage. Fortnite thinks they're above the rules. Yeah how dare Apple want something for letting people sell stuff in their place

On the clock. Godspeed. Epic: We want to make games for your platform Apple: There is a fee for that Epic: We do not want to pay any fees Apple: Then you cannot be on our platform Epic: We demand to be on your platform for free Apple: No Epic: *Lawsuit* Man fuck epic. They broke tos And this could explain reports of Microsoft possibly slashing revenue it gets in the Xbox store from 30% to 12% cause they could be seeing the writing on the wall and avoiding a future case themselves.

Honestly...fuck Apple. cryborg Are mobile app makers not free to sell their apps through Apple’s App Store while also offering them directly to customers directly from their website? Also, how is Apple extorting them when developers freely sign up with Apple? They CAN go it alone - or find another outlet, no?

cryborg This case is about whether you are going to have safe secure environments for private info or a virus infested mess for Epic can make more money, maybe just ban games on phones completely. is XBox live, Playstation Network, Nintendo also a walled garden with a 30% cut if you want to develop/sell on their platforms?

Apple AirTags pulled from sale by Australian store due to child safety concernsApple says the product meets safety standards, but one chain is playing it safe. People need a little more good news now. Apple answers the question: Can you make a consumer device too small? Yes. Kids are stupid and will put everything in their mouths, by this logic they should ban all products smaller than a basketball. Or just ban babies, problem solved.

cryborg There is more to it than that, Epic wants to make money and don't really care if they throw your security out with it. “One of its most” in “recent years.” Could you write anything more vague? Actually, meaningless. Let’s goooooooo Really, why should a reputable brand do this? No way this happens. One of the huge benefits to the Apple ecosystem is a safe App Store. Fuck Epic Games and their endless greed.

Everybody knowns nothing worst than a federal case Play on Google’s phone. I hope they get to put down monopoly type bullies! I like Apple but agree App Store is a monopoly What Apple has done is a classic case of monopolistic actions. Time for courts to loosen the grip; let competitive payment systems come in. Today, people have no choice but pay whatever Apple demands. End of the day, it is not just App developers, but consumers who pay the toll.

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Good start Fuck ALL big biz. Google has a “walled garden” too their users just pretend they don’t. Google takes a cut of app developer sales too. Google apps won’t run on anything but Android devices either. If this succeeds, Google will have to change practices as well. Apple should just buy epic games and end this

Breaking News Monopoly sues other Monopoly at 7! Exactly! Gotta love the balls on a company suing the company that helped make them ridiculously wealthy. this isn't even remotely close to a 'serious legal threat', this is performative if anything That's exactly why I will never use an iPhone.🤑🤑🤑🤑😱 I receive my profit in my wallet$9500 under my manager can’t stop to say thank to you LisaKlaux this profit has really made my family to finally believe that I am not wasting my time online Forextrading is real when you find the right manager contact the manager 👇👇 Lisaklaux

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Be interesting to see how this shakes out, Sony wants to have their own walled garden with PlayStation products, wonder how this case will affect their ambitions for a similar economic fiefdom.