How ‘Fortnite’ Maker Epic Games Will Try To Prove Apple Is Operating The App Store As An Illegal Monopoly

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Epic Games Inc., the maker of “Fortnite,” has drawn a clear battle line as it prepares for a monumental court battle against Apple Inc .: It claims that the iPhone maker is abusing its control of the App Store for anti-competitive purposes. Apple AAPL, -1.51% controls the only means of installing software on an iPhone through its app review process. As such, the iPhone maker has collected more customers and locked them into its ecosystem, removing apps for business reasons under the guise of security, Epic said in a legal filing on April 7.

“Apple’s core business model is to ‘hook’ its users into this integrated Apple ecosystem, so they ‘don’t want to quit,'” Epic says in its 365-page archive. “On an agenda for a 2010 executive team meeting, Apple founder and late CEO Steve Jobs wrote that he wanted to ‘bring all of our products together, so [Apple] additional lock[s] clients in [its] ecosystem ‘”. Apple’s onerous 30% cut, in turn, has forced developers like Epic Games to raise prices, increases that are then passed on to consumers, Epic says. Despite repeated claims by Apple CEO Tim Cook that Apple is not dominant in any market, Epic highlighted iOS’s 40% share of the smartphone operating system market by revenue as of 2019, and 56% of Apple’s revenue for smartphones priced $ 300 or more. starting in 2019. Don’t Miss: Apple v. Epic: What to Expect from a Trial That Could Change Antitrust Law and the Mobile App Ecosystem? See also: Will video games be the Achilles heel for Apple and Google in antitrust investigations? Apple’s aggressive defense of its revenue stream on the App Store, Epic argues, is part of a public relations machine designed to protect lucrative turf and continue to squeeze potential rival apps with hefty fees and arbitrary rules. He even jokingly refers to Apple’s stance as that of a “sleepy monopolist” rather than that of an innovator. Epic Games CEO Tim Sweeney does not dispute the effectiveness and value of Apple’s mobile operating system, the company says, but he does disagree with Apple’s effort to exclude competition by distributing applications. Those sentiments were echoed in a Senate hearing on app stores on April 21. [Apple] he took the internet and moved it to the App Store, ”testified Jared Sine, legal director of online dating services company Match Group Inc. MTCH, -0.59%. He and other developers have called for federal legislation on app stores, which is supported by Sen. Amy Klobuchar of Minnesota, the leading antitrust voice among Democrats. The Senate hearing underscores what Epic strategists say is a general sentiment in the developer community that Apple may have created an excellent mobile operating system, but has exercised unlimited power over developers through commissions, to whom it admits. in his store, intimidation and recriminations. For more information: The ‘Fortnite’ dispute could open the floodgates for serious scrutiny from Apple Another line of legal attack from Epic focuses on iMessage and Apple’s flirtation with its making available on Alphabet Inc.’s Android operating system, which is also the target of an Epic antitrust lawsuit – as early as 2013. A new statement cites an email exchange between Eddy Cue, now Apple’s senior vice president of software and services, and Federighi, Apple’s senior vice president of software engineering, in April 2013. “Do we want to lose one of the most important applications in a mobile environment for Google? “Cue question. That exchange came amid reports that Google GOOGL, -1.64% GOOG, -0.81% had tried to buy WhatsApp for $ 1 billion. Facebook Inc. FB, -1.34% finally acquired WhatsApp, for $ 19 billion, in 2014. In another dig at its legal adversary, Epic quotes a senior Apple engineer who compared the App Store’s defenses against sophisticated digital attackers to “bringing a plastic butter knife to a shootout.” The anecdote is based on internal documents quoting Eric Friedman, head of Apple’s Risk and Fraud Engineering Algorithms unit. In it, Friedman said that Apple’s review process for new apps for the App Store was “more like the pretty lady who greets you … at the Hawaiian airport than the drug sniffing dog.”