On final day of the Epic vs Apple trial, many topics were revisited including how to define the market in question; judge could now take months to reach verdict

Epic v. Apple came to a close on Monday with a series of contentious back-and-forth debates in place of traditional closing arguments.

Protocol 2021-05-25 Nick Statt

Context & Ripple Effects

The case began with Epic challenging Apple’s App Store “walled garden” and 30% cut, while Apple characterized the commission as standard practice. By the close, the dispute had narrowed around the market definition needed to assess those competing claims.

The judge’s earlier questions about the App Store’s lack of competition had already put that issue in focus. The final exchanges leave the court to reconcile Epic’s theory with Apple’s defense before issuing a ruling.

First-order effects

Apple and Epic now await a decision whose reasoning must address the judge’s questions about App Store competition and the parties’ competing definitions of the relevant market.
Neither side gets an immediate operational change from the trial’s close; the next consequential step is the court’s verdict, which may take months.

Second-order effects

The ruling’s market definition will determine whether Epic’s challenge to Apple’s App Store model is evaluated as a dispute over a narrowly defined distribution channel or a broader competitive market.
The trial record, including the competing App Store arguments presented in court, gives other platform-gatekeeper disputes a closely watched framework for arguing about competition and commissions.

Third-order effects

If courts continue to treat market definition as the threshold question in platform cases, gatekeeper power will increasingly turn on how digital distribution choices are classified rather than on commission rates alone.

The trend: Platform-gatekeeper litigation is concentrating on whether app distribution constitutes a distinct market and therefore a distinct source of competitive leverage.

Discussion

@benedictevans Benedict Evans on x
Apple execs on why the Mac apps store wasn't really working. https://twitter.com/...
@timsweeneyepic Tim Sweeney on x
The Epic vs Apple trial has now concluded! I won't be commenting before the verdict is delivered. Thanks to everyone whose efforts made this possible, and to Popeyes for building a fine restaurant next door to the Oakland federal courthouse. https://twitter.com/...
@benedictevans Benedict Evans on x
Apple exec: 'Should we buy LiquidSky and stream everything from FCP to AAA Windows games from the cloud? Fedherighi: “Um, no” https://twitter.com/...
@nickstatt Nick Statt on x
Tim Cook's tesitmony really laid bare how Apple sees a lot of the debates here, in particular that it owns all the commerce on App Store, 100% controls access to the customer base, and sees the whole platform as a way to be compensated for its IP and R&D investment.
@atulbutte Atul Butte on x
@benedictevans @NoisyNarrowBand Wow, and back in 2017...
@happypower MSF Happy Power on x
@TimSweeneyEpic You got this Tim. Thanks for spending the time and money for the people 🤝
@nickstatt Nick Statt on x
Epic's lawyer says there's an obvious remedy the court could provide. “We have something, and it's called the Mac,” Bornstein says. “It's a model that existed in the world and this very company has said is safe. People can go to and download with comfort and assurance.”
@nickstatt Nick Statt on x
Both sides are now trying to figure out what the hell Apple actually means when it says you can't tell iOS users about cheaper in-app purchase options outside the App Store using a sign-up email. Everyone seems to be confused because there are different rules for different apps.
@patrickmcgee_ Patrick McGee on x
Would not have expected this even a week ago. Last few days have been v consequential. “We also currently believe that Epic has a slight edge in winning the Apple litigation.” -Nick Rodelli, head of Legal Edge Research at CFRA
@betterthemask Meghna Jayanth on x
welcome to hell, Judge Rogers https://twitter.com/...
@patrickmcgee_ Patrick McGee on x
Epic, on remedies: We hold up the Mac not as what Apple *must* do, but what it *could* do. Apple can still have an App Store and encourage people to use it. People can keep shopping there. But people could have a choice to shop elsewhere, too.
@nickstatt Nick Statt on x
There is now a debate over whether anyone has complained about anti-steering. It's literally the entire focus of the EU's antitrust investigation into Apple, instigated by Spotify... which doesn't let you sign up for Spotify Premium on iOS anymore. https://www.theverge.com/...
@macton93 Michael Acton on x
Back to this: @EpicNewsroom Bornstein: “I don't have a precise example where a court ruling in a case involving a private party that has had precisely the same kind of impact.” But dealing with unique situation here in terms of @Apple market power https://twitter.com/...
@benedictevans Benedict Evans on x
@atulbutte @NoisyNarrowBand That was probably planned in 2015 or earlier.
@tha_rami Rami Ismail on x
Seems in at least one regard, Judge Rogers is more game developer than both Apple or Epic. https://twitter.com/...
@benyt Ben Smith on x
So many high level conversations at tech companies start with a random person emailing the CEO https://twitter.com/...
@patrickmcgee_ Patrick McGee on x
4. same rights through the App Store 5. Apple is enjoined from restricting other in-app payments. 2/2
@patrickmcgee_ Patrick McGee on x
What Epic wants, from Apple's POV: 1/2 1. no prohibition on sideloading 2.all stores get access to apple functionality 3. no warnings signs or indication that some apps haven't been approved
@thezedwards @thezedwards on x
@PatrickMcGee_ i'd agree w/ that. Apple may lose, but the ramifications of requiring apple hardware to host new software marketplaces will implode the security & business models of Xbox + PlayStation + Nintendo + fireTV + SmartTVs + Roku etc. imo the appeal will get into impacts/…
@benedictevans Benedict Evans on x
@NoisyNarrowBand presumably moving the Mac to apple silicon
@noisynarrowband Christoph Engemann on x
@benedictevans What is the “olive” Fedherighi is referring to?
@mslopatto Absolute Mayhem Situation on x
Doren, for Apple: Epic presented no witness at all for what remedy they want or why it would be workable.
@patrickmcgee_ Patrick McGee on x
A big question from the judge. She sounds reticent of having The Court basically tell a company - let alone the world's largest company - to fundamentally change their business model. https://twitter.com/...
@patrickmcgee_ Patrick McGee on x
I'm no legal scholar but the more the Judge relies on precedent, the worse things are for Epic. BigTech companies have a by-the-minute relationship with consumers that companies have never had before. iPhone isn't a one-off purchase - it's a relationship.
@thedextriarchy Adi Robertson on x
On remedies now. Judge starts with Epic's Bornstein: says it bothers her that Epic doesn't seem interested in paying for access, and if it is, it doesn't have a good explanation for how it would collect money. “I still don't understand where you expect this to go.”
@snazzyq Quinn Nelson on x
If the Epic v. Apple lawsuit has revealed anything surprising, it's how poorly just about every Apple executive writes their emails. There's hardly any grammar, oodles of spelling mistakes, and wacky structure. No proofs have been read.
@reedalbergotti Reed Albergotti on x
Apple's Moye: “The fact that Apple feels the need to have an anti-steering provision is absolute proof the apple platform competes with other platforms to which they could be steered.” Epic's Bornstein: That's “economic nonsense.”
@annekpix Anne Makovec on x
If I were to bet, I'd guess the judge in #applevsepic will rule in favor of @Apple. She said, “It is Apple's business strategy to create a... ecosystem that is incredibly attractive to its purchasers... you know that's what you're buying into and you choose to make that decision.…
@thedextriarchy Adi Robertson on x
Judge jumps in. “Courts do not run businesses ... In the cases where courts have found antitrust conduct, how have the courts fashioned remedies to deal with the antitrust conduct?”
@nickstatt Nick Statt on x
We're back in court and onto remedies. Epci says “the right thing to is to get rid of those particular anticompetive restrictions” on the App Store.
@patrickmcgee_ Patrick McGee on x
Judge YGR: I'm not promising a verdict by August 13 but I will try to do this while arguments are fresh. 4,500 pages of testimony to sift through(!)
@leah_nylen @leah_nylen on x
YGR: Can you find me a single antitrust case where the type of relief you are requesting has been granted by a court? It is a pretty significant step that courts haven't done.
@reckless Nilay Patel on x
I don't think anyone can explain to a normal iPhone user why they can buy a $3000 OLED TV from the Amazon app but can't buy a $20 ebook in the Kindle app without sounding like a conspiracy theorist
@benedictevans Benedict Evans on x
(Incidentally, this is also a good summary of why no, Apple isn't working on streaming games itself)
@stroughtonsmith Steve Troughton-Smith on x
This is kinda bonkers. Ask any Mac dev and they'll give you plenty of reasons why they're not on the Mac App Store. Tim thinks the MAS' problem is a lack of games. Not sandboxing. Not payment model. Not upgrade model. Not App Store restrictions defining out categories of apps htt…
@stevesi Steven Sinofsky on x
The lack of traction on the Mac apps store is so important to the understanding of why phone stores have been so important to the up-leveling of platforms in general. The PC era was about apps taking over control of hardware, bypassing abstractions. That's a huge part of this. ht…
@stroughtonsmith Steve Troughton-Smith on x
There's a lot of fact-twisting, misdirection and dishonest arguments coming from Apple's lawyers in closing in the Epic case, which contrasts starkly with Epic's factual points. I feel like if Apple were on the right side of history here, they wouldn't have to lie & manipulate
@reckless Nilay Patel on x
Wait I don't ever want this part of the trial to stop https://twitter.com/...
@b_fung Brian Fung on x
Apparently the judge in a prior hearing joked about having a decision by Aug. 13 (the date last year when Epic released its Fortnite hotfix that kicked all of this off). She now says only some got the joke. “I am not promising to have this by Aug. 13 but I am going to try.”
@thedextriarchy Adi Robertson on x
Judge notes that Epic also sued Google. “On Google's platform, there are many stores, and yet Epic sued them anyway.” So how would opening up iOS solve the problem, “given that Epic has also sued Google on the exact model” that he's saying iOS should use?
@b_fung Brian Fung on x
Apple also making the case that it is highly responsive to developer feedback, and that it has reduced commissions several times since the launch of the app store.
@fosspatents Florian Mueller on x
Very peculiar: Counsel for Apple argues that litigation and regulatory action driving price reductions is like competition. Judge also struggling with that suggested equivalence.
@thedextriarchy Adi Robertson on x
Final day of Epic v. Apple starts in 10, with my colleague @mslopatto in the courtroom! Apple seems like it's in a relatively strong place fighting sideloading, but last week ended with some tough payment questions for Tim Cook: https://www.theverge.com/... https://twitter.com/..…
@patrickmcgee_ Patrick McGee on x
Apple says there is competition in prices from groups like Steam, or on PCs and Consoles Epic: Mr Cook didn't even know what Steam was, let alone did he feel pressure to lower prices from its competition.
@nickstatt Nick Statt on x
Epic v. Apple is back for a final day in court for what are effectively closing arguments before the case is in the judge's hands. Here's my story from Friday on the surprising end to Tim Cook's testimony. Will report any notable exchanges here on Twitter. https://www.protocol.co…
@thedextriarchy Adi Robertson on x
Swanson says Apple isn't making massively more in commissions with the App Store than other platforms like Steam. (Even though, as he notes, Apple allegedly doesn't know exactly how much the App Store makes.)
@thedextriarchy Adi Robertson on x
Judge notes that there's another class action suit pending against Apple. “Apple's not just being sued by Mr. Sweeney and his company. They're being sued by an entire class of developers,” she says.
@nickstatt Nick Statt on x
Judge YGR: “So far there doesn't seem to be anything in the market itself that is pressuring Apple to compete for developers?” Both sides are debating the relevant market, and whether it should be app distribution or just game transcations or both.
@protocol @protocol on x
Judge Yvonne Gonzalez Rogers got Cook to admit that gaming, and in particular in-app purchases for mobile games on the iPhone, generate the majority of the App Store's revenue. https://www.protocol.com/...
@jeremiahlee Jeremiah Lee on x
This judge sounds amazing. “You're charging the gamers to subsidize Wells Fargo.” https://twitter.com/...
@protocol @protocol on x
Judge Yvonne Gonzalez Rogers, who is presiding over the Epic v. Apple antitrust trial, saved her best for last. https://www.protocol.com/...
@nickstatt Nick Statt on x
That's it for the courtroom play-by-play as Epic v. Apple trial is scheduled to end on Monday after both sides effectively give closing arguments and hand it off for the judge to decide. But we may not get a verdict for months. 😬https://twitter.com/ ...
@nickstatt Nick Statt on x
Here's @thedextriarchy with the full transcript of the judge and Tim Cook's back-and-forth today in the final day of Epic v. Apple, and it's worth reading. No one will likely get as prime an opportunity to question Apple about its business model for years to come. https://twitter…
@keleftheriou Kosta Eleftheriou on x
Cook said Apple needs to get a return on its intellectual property investment, and that's essentially why the App Store takes 30%. Only problem, he won't tell us how much that investment is 🤷 https://www.protocol.com/...
@nickstatt Nick Statt on x
Here's my story on the fireworks in the final 10 minutes of Tim Cook's testimony, and what it tells us about how Judge Yvonne Gonzalez Rogers may rule in Epic v. Apple https://www.protocol.com/...

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