Today's closing arguments in the Epic Games Inc. v. Apple trial centered on two critical and highly technical legal questions: what is the relevant competitive market, and what should the court do if Apple is found to be unfairly monopolizing the market?
In this case, the market in question for Epic is simply the market for iOS apps. Epic claims that Apple has a monopoly in this market because iOS users can't legally download applications or make in-app purchases unless they use Apple's App Store.
Apple, however, claims that this is the wrong way to look at the environment in which iOS operates, and that the company already faces "massive competition on a worldwide scale."
This includes smartphone competition from Android (which has a much greater global market share), as well as gaming competition from consoles, PC storefronts such as Steam and other channels.
Epic retorted that App Stores on other platforms are insufficient consumer substitutes. That's because "you would not see switching in sufficient numbers in terms of app distribution to constrain Apple's conduct" even though those rivals lowered their App Store commissions.
Conversely, Epic said, "if Apple were to raise the price [of its commission], you would not see sufficient people switching to an Android device or a console."
Apple said that it has never increased developer commissions above the 30% set when the App Store first launched in 2008, a rate that was comparable to what rival digital marketplaces like Steam were charging at the time.
Instead, Apple claims that policies like the Reader rule (which requires content purchased outside of iOS to be freely loaded onto an iOS device), the video partner program for streaming services, and last year's Small Business Development program have essentially reduced its App Store commission prices in many cases.
While the parties in the case clearly disagree on whether Apple is behaving unfairly as a monopolist, they also disagree on what the court should be able to do if an issue occurs. Epic is requesting a number of injunctions to prohibit Apple from restricting what developers can do with iOS hardware.
Apple, however, claims that doing so will jeopardize the entire ecosystem it has created around the iPhone.
Apple would still be free to curate its own iOS App Store, protect its customers, and enforce whatever rules it chose under Epic's proposed solution, according to Epic's counsel, just like a grocery store decides what items to stock. "The problem is they're the only store in town," Epic argued, "the only store that there is to get apps onto the iPhone. It's that restriction that's at issue."
Judge Yvonne Gonzalez Rogers said that she is reviewing thousands of pages of evidence and over 4,500 pages of testimony, so we should not expect a verdict right away. She is, however, eager to assess the case "while memory and arguments are fresh."
