New chapter in the fight between Apple and Epic Games. And one, by the way, that considerably expands the cast of actors. Microsoft, 35 state prosecutors and the Electronic Frontier Foundation —among other voices— have submitted briefs in tune with Epic’s position, which in the summer of 2020 brought the Cupertino firm to trial for considering that it applies anti- competitive practices to developers, It charges them abusive commissions in its AppStore and exercises a monopoly position. The reports are now arriving, precisely, as a consequence of that trial, which closed in 2021 with a sentence that did not satisfy either party.
The case, as we have been telling you, comes from behind. In a risky but well-studied move, in August 2020 Epic Games introduced its own payment system for its customers at Fortine. The goal: dodge the 30% commission that Apple charges for each transaction in the app. Upon learning, the Cupertino firm expelled Fortnite from the App Store, which caused Epic, in turn, to go to California Court. A battle started during which the developer of Fornite tried to show that Apple applies anti-competitive practices and abuses his position.
A battle that comes from afar
The case, obviously, is much more than a simple tug-of-war between two multinationals. What Epic was looking for was to question Apple’s business model in the App Store and open alternative payment methods in iOS apps without having to face the 30% commission. The sentence came in September and although in theory it agreed with Apple on almost all points, in practice it meant a “draw”. Why? The judge ruled in his favor on almost all the charges that Epic Games had brought against him and forced the developer to pay Apple for breaking his contract; but she also threw a pot of cold water at the apple company: she forces it to accept that developers like Epic include alternative payment gateways in their apps .
That decision was followed by an appeal phase during which both companies appealed the points that harm them. Now, as part of that process, various organizations, including attorneys general, professors, the EFF, or even Microsoft, have filed reports that somewhat support Epic’s battle and its attempt to show that Apple has a monopoly in iOs apps. What exactly have the other agencies submitted? Amicus curiae, which can be defined as documents that provide additional relevant information and originate from actors who are not directly involved in the case, such as prosecutors or the EFF.
The most striking, however, may be the statement by Microsoft, which was already an ally of Epic Games during the trial. “If Apple is allowed to come between any business with online services and iPhone users, few areas of the vast mobile economy will be safe from Apple’s interference and eventual dominance. Consumers and innovation will suffer, in fact they already have,” argued the multinational, which in the past has faced its own investigation for abuse of dominant position and monopoly both in the United States and in the EU.
“A broad ruling in favor of Apple could leave little room for a limiting principle that prevents Apple from taking advantage of its control of iOS to exclude competition in countless adjacent markets”, Microsoft abounds: “Google, the other provider of mobile operating systems, could be empowered to do the same. The stakes are high for Microsoft and other companies that rely on antitrust laws to protect competition in the background.”
Microsoft is not the only one that in one way or another questions the 2021 ruling. Even the Department of Justice went so far as to point out that “several legal errors had been made in the ruling that could jeopardize the effective application of antitrust rules, especially in the digital economy. In his opinion, the process had interpreted the Sherman Act of 1890 “in a limited and erroneous manner”, which would leave “many anti-competitive practices outside its protection”. Attorneys general from 35 states and nearly 40 business, law and economics professors have directly asked the appeals court to reverse the 2021 decision.
“Apple’s conduct has harmed and is harming mobile app developers and millions of citizens,” state prosecutors abound : “While Apple continues to monopolize app distribution and in-app payment solutions for iPhones, stifling competition and racking up supra-competitive profits in the smartphone industry. You must account for your conduct under a full rule of reason analysis.”
