Epic vs. Apple’s opening arguments level to a fierce battle for the way forward for iOS

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Enlarge /. Artistic idea of ​​what Apple and Epic lawyers did to each other in the courtroom today.

Epic against Apple / Google

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When the Fortnite studio cited the opening arguments in Epic’s long-awaited bank attempt against Apple, it found that it was “not suing for damages” or “a special offer”. Instead, according to Epic’s attorney, it is “a lawsuit for change, not just for yourself but for all developers.”

While “Epic is far from being the only unfortunate Apple developer and distributor,” Epic attorneys said it happened to be the only company that finally could [say] enough for Apple’s monopoly behavior “by taking” the world’s largest company “in court on the matter.

Apple used its opening arguments to characterize Epic’s lawsuit as “just an attack on Apple’s 30 percent commission that Epic refuses to pay,” and Epic as a company that “has ruled that it will no longer pay for Apple’s innovations want . “

“Instead of investing in innovation, Epic [is] Investing in lawyers and public relations … to take advantage of the free benefits Apple offers, “Apple said.

Lock-in and the developer bait and switch

Much of Epic’s opening argument centered on the idea that iOS users and developers are effectively tied into Apple’s mobile ecosystem, and that Apple knew from the start “what to do to include users”. Epic created a number of emails from Apple executives to demonstrate this argument, including a 2013 email from Eddy Cue explaining how users can be “locked into the ecosystem.”

As Cue wrote to Apple’s Tim Cook and Phil Schiller in 2013:

The more people use our stores, the more likely they are to purchase additional Apple products and upgrade to the latest versions. Who goes but a Samsung phone when apps, movies, etc. have already been bought? They have to spend hundreds more now to get where they are today.

According to Epic, Apple lured developers in with the first promise that the App Store itself wouldn’t be a big profit maker for Apple. Steve Jobs said in 2008 that the company did not “intend to make money from the App Store” but was using the existence of an app marketplace to add value to profitable iOS hardware itself.

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That worked well for everyone at first, as Epic said. However, around 2008 Apple found that some free iOS games were selling additional levels “for a fee”. Apple Vice President Greg Joswiak identified this in an email as a “possible leak in the system” and said, “We need to make sure our terms don’t allow this to happen.” In 2009, a new requirement was imposed to use Apple’s In-App Purchase System (IAP) for such sales. Apple has been cut by 30 percent. Until 2011, subscriptions made through apps had the same requirements.

Epic argued that charging in-app purchase fees was capricious and had nothing to do with security risks, the level of support Apple offered, or the cost of processing user payments. And Epic points out that Apple cut its offering fee for the second year of auto-renewing subscriptions to 15 percent, even though the cost hasn’t changed. “There’s a name for companies that set prices regardless of cost,” said the Epic attorney. “Monopolies.”

  • All in all, this email is just another brick in the wall (from Apple’s walled garden).

    Apple vs. Epic Court Documents

  • If MacOS is secure, as Apple suggests, Epic wonders why iOS needs extra security in the form of full App Store control …

    Apple vs. Epic Court Documents

  • Steve Jobs didn’t expect the App Store to be a winning factor for Apple …

    Apple vs. Epic Court Documents

  • … but Steve Jobs didn’t know what was coming.

    Apple vs. Epic Court Documents

  • A selection of the developer’s reactions to the iOS App Store review.

    Apple vs. Epic Court Documents

  • Fortnite is more than a game, argues Epic. It is the beginning of a whole metaverse.

    Apple vs. Epic Court Documents

  • According to Epic, iOS app distributions should be more like gas stations where different vendors can service the same car after it leaves the lot.

    Apple vs. Epic Court Documents

Despite Jobs’ expectations, Epic said, internal Apple documents show the iOS App Store is now generating profit margins in excess of 75 percent on annual sales of hundreds of millions of dollars. According to Apple, these numbers are misleading and do not take into account the iOS SDK and API costs that are submitted in other areas of the company such as the software division.

In any case, Epic characterized this massive profit-taking on app revenue as Apple’s bait and switch. “The most attractive flower in the garden was a Venus flytrap,” said the epic lawyer. Developers “have helped add value to iOS, and once committed to the iOS ecosystem, their businesses have been dependent on Apple.”

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Consumers have now invested a real, decreased cost in the iOS ecosystem and would incur significant costs to switch, Epic said. Epic cited studies showing that “a developer like Epic could not leave the iOS platform without losing profits, despite a price increase.”

However, Apple cited its own data to suggest that 12-26 percent of iOS users who bought a new phone in the past few quarters have switched to another mobile platform, showing that there are competitive alternatives out there, themselves for users who are supposedly “locked up”. “” And as Fortnite’s iOS usage dwindled after the iOS App Store was removed, the game soared on competing gaming platforms concurrently, according to data submitted by Apple, suggesting other alternatives in this use case.

Safety precautions or pretext

Epic argued that Apple could have built the Walled Garden iOS software with a door, as it did MacOS, which uses the same kernel but still allows the installation of unsigned apps that are not via Apple’s official Mac app Store to be sold. Forcing iOS apps through the App Store and its review process was “not a technical decision, but a political one,” argued Epic.

However, Apple responded that blocking the iOS App Store was also a security decision [unreviewed] Third party native apps on iPhone could put the phone at risk itself. “A mobile device offers a larger and more attractive attack surface than a desktop operating system, argued Apple, thanks to the additional features of the mobile device and the almost constant power-on state. This requires additional layers of security to protect users,” Apple said.

“It’s a rare moment when someone gets off a Mac on a bus or a movie theater,” Apple’s lawyers said. “A Mac doesn’t know where you or your kids are.”

Epic said the argument is just an excuse for a business decision to have complete control over the iOS app market. Quoting Apple executives and materials, Epic Counsel said MacOS was safe and Counsel argued that there was “no” [security] Bug in MacOS that iOS fixed. “

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