Apple and Epic Games’ weeks-long antitrust trial came to a close on Monday, with the creator of the hit video game Fortnite calling Apple a “overlord” and Apple suggesting Epic is paving the way for a “scary” future for iOS users.
The two sides returned to where they started on Monday, arguing over how Judge Yvonne Gonzalez Rogers should interpret Apple’s role in a sprawling digital economy, after spending days presenting reams of dueling economic analysis and documentary evidence. The findings of that investigation could change the way digital app stores operate or help Apple maintain its dominance in the app ecosystem.
Gonzalez Rogers will decide in a matter of weeks whether Apple is an agile innovator who reaped just rewards for building a popular app business, or if it is, as Epic claims, a monopolist who illegally harms competition, restricts innovation, and keeps prices high by controlling the iOS App Store.
After a three-week trial that saw top executives such as Apple CEO Tim Cook and Epic CEO Tim Sweeney called in for questioning, the judge said Monday she hopes to issue an opinion by mid-August, though given the thousands of pages generated by the landmark antitrust case, it could take longer.
Epic has argued that Apple’s walled-garden ecosystem prevents iPhone and iPad apps from being downloaded from anywhere other than Apple’s own app store, effectively making Apple a monopoly owner. Epic claims that Apple’s alleged monopoly allows it to impose restrictive terms on iOS app developers, such as requiring a 30% cut of all in-app sales of digital goods and services. (Last summer, Fortnite was kicked out of Apple’s App Store for defying Apple’s rules on digital payments by directing players to its own, third-party system.)
Epic asked Gonzalez Rogers on Monday for an order prohibiting Apple from enforcing some of its policies and requiring Apple to allow third-party app stores to compete with its own proprietary app store. Epic also accused Apple of attempting to persuade the judge that it is a “benevolent overlord” of the iOS ecosystem, and that it should be allowed to operate without competition “because it’s worked out okay so far.”
Epic’s lawyer stated, “That is not a defense under the antitrust laws.” (When Gonzalez Rogers argued that Apple couldn’t be “benevolent” and anti-competitive at the same time, Epic’s lawyer disagreed, claiming that Apple was only “pretending to be a benevolent overlord” and needed to be genuinely tested against competitors.)
Apple, on the other hand, has urged Gonzalez Rogers to think of the App Store as part of a thriving, competitive video game market. A string of high-ranking executives, culminating in Cook on Friday, argued that Apple’s platform rules protect users while also ensuring security and privacy. Its lawyers stated on Monday that giving Epic what it wants would be unjustified and unprecedented.
Gonzalez Rogers grilled both sides with pointed questions. She questioned Apple’s commission structure, saying, “If there was real competition, that number would move, and it hasn’t.” Later, Apple claimed that it had reduced commissions on several occasions, such as by creating a discount for new customers. Later, Apple claimed that it had reduced commissions on several occasions, including by offering a discount to small businesses.
The judge hinted that she was open to finding that Apple had broken the law at times, musing hypothetically about possible restrictions she could impose on Apple under California law or considering an analysis that could allow for a finding of anticompetitive conduct by Apple without determining that it has a monopoly.
Gonzalez Rogers grilled Cook after his testimony on Friday, asking why Apple couldn’t offer users a cheaper option for games and content than what is available on the iPhone. She also inquired as to why Apple would not allow apps to inform users of their location. She also questioned why Apple wouldn’t allow apps to inform users that in-app content could be purchased for less money elsewhere online — a point she brought up again on Monday.
On Monday, she pushed back hard against Epic, claiming that the company was asking her to “change Apple’s business model.” She challenged Epic’s lawyer, Gary Bornstein, to provide an example of a case involving private litigants that had resulted in that type of result. Before rejecting them as appropriate comparisons, the attorneys briefly debated the landmark Microsoft antitrust case of the 1990s, the US government’s recent case against Qualcomm, and a pending Supreme Court case.
“You haven’t told me a single antitrust case where the kind of relief you are requesting has been granted by a court when a private plaintiff comes in,” she said. “It is a pretty significant step that courts haven’t done.” (Bornstein admitted he did not have a perfect analogy on hand and that the judge faces “a pretty unique situation.”)
Gonzalez Rogers’ reservations about precedent opened the door to Apple’s arguments that giving in to Epic’s demands would be a significant departure from precedent.
“If that is scary for Apple’s iOS customers … and for this court, that is simply a consequence of what Epic is asking for,” said Apple’s lawyer, Richard Doren. In contrast, Epic claimed that Apple is attempting to “scare the court.”
Gonzalez Rogers, on the other hand, appeared to enjoy her position on the cutting edge of the law at times.
“They don’t call us the Wild West for nothing,” she joked.
