Apple says Epic Games demands threaten iOS app security, privacy, quality

Posted:
in iPhone edited May 3
As part of its opening arguments, Apple says that its policies protect the privacy, security, and quality of the App Store, and claims that Epic sued only because it no longer wanted to pay Apple's commissions.

Credit: Apple
Credit: Apple


The Apple v. Epic Games trial kicked off on Monday, May 3 with opening arguments from both sides. The case stems from a lawsuit that Epic Games lodged against Apple after it baited the company into removing "Fortnite" from the App Store.

In her opening statements for Apple, Karen Dunn offered a counter-narrative to Epic Games' argument. She says that "Fortnite" revenue had begun to stall, but instead of innovating, Epic turned to litigation. Instead of hiring engineers, Dunn said, "Epic invested in lawyers."

"Epic, a $28 billion company, has decided it doesn't want to pay for Apple's innovations anymore," Dunn said. "So Epic is here demanding that this court force Apple to let into its App Store untested and untrusted apps and app stores."

Privacy, security, and quality

Apple's lawyer argued that privacy and security on its platform dramatically outpaces it competitors. She also touted the opportunity that the App Store has created for developers while maintaining quality, trust-worthy apps for consumers

The in-app payment system that Epic is contesting, for example, was asked for specifically by developers as tool. Apple says that Epic Games wanted a "side deal" for itself. And, failing to get it, decided to bring a legal case against Apple.

Apple currently charges 30% on app and in-app purchases, which Dunn says is an industry standard. Since the majority of apps on the App Store are free, most developers don't pay Apple anything. Dunn also brought up the different ways developers can monetize, including in-app advertising.

Apple argues that Epic's market definition is too narrow

Additionally, Apple argues that Epic Games' definition of the market is too narrow because of multi-homing. She said that 95% of iOS users regularly use another device other than an iPhone, such as a Mac or a game console.

"The proposed market is too narrow because there are many, many, many platforms where consumers and developers engage in transactions: The Mac, iPhone or Android console to the PlayStation and the Nintendo Switch, which, by the way, does fit in your pocket."

The majority of "Fortnite" players are on other platforms, Dunn said. Apple's iOS ranks in either third or fourth place in most studies. She says that's a mark of a competitive market.

By allowing alternative app stores and side-loading, Dunn says Epic Games is asking Apple to turn iOS into Android -- removing its competitive advantage. She said that's something neither Apple nor its customers want.

More than that, Dunn also argued that Apple's effective commissions have actually dropped on the App Store. In 2019, the effective commissions for game apps was 8.1%, she said. For all apps, it was 4.7%.

Qualcomm precedent

During the opening statement, Dunn also argued that the Apple v. Epic Games battle is a "duty to deal" case. In other words, she says Epic Games is urging the court to force Apple to license its own intellectual property in a specific way.

Dunn mentioned the Qualcomm precedent, in which the Ninth Circuit rejected a lower court's opinion and concluded that it had erroneously imposed an antitrust duty to deal on Qualcomm.

In other words, the court ruled that Qualcomm has no general duty to deal with competitors. If Epic Games loses the case against Apple, the precedent could prove to be a major challenge to an appeal.

Software costs

Apple also addressed the margin argument brought forth by Epic Games. The "Fortnite" maker, for its part, argued that Apple's commissions are unnecessary because its App Store margins are huge.

Those margin calculations, Apple says, only examine one part of the iOS ecosystem. For example, they don't include the software costs that Apple has to pay to make the App Store function. Some of those costs including developing APIs and other developer tools.

Apple also made it clear that its business model is shared by many other companies, including some that have previously allied with the Epic-adjacent Coalition for App Fairness. That includes Sony, Microsoft, and Nintendo.

"IF Epic prevails, other ecosystems will fall too," Dunn said.

Comments

  • Reply 1 of 18
    22july201322july2013 Posts: 2,091member
    I wonder why Apple didn't make the point that Apple's commission on paid software like Fortnite subsidizes the services given to free software, which is the majority of the software available in the App Store. Apple should go on to say that Epic doesn't want Epic's products' costs to subsidize free apps, in order to reduce competition against Epic, and that Apple may have to require free apps to pay a fee if Apple loses to Epic. Therefore competition and consumers would suffer if Epic wins.
    GabyaderutterBeatsbshank
  • Reply 2 of 18
    Trey_LanceTrey_Lance Posts: 61member
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?
    Beatsqwerty52williamlondonbshank
  • Reply 3 of 18
    Trey_LanceTrey_Lance Posts: 61member
    I wonder why Apple didn't make the point that Apple's commission on paid software like Fortnite subsidizes the services given to free software, which is the majority of the software available in the App Store. Apple should go on to say that Epic doesn't want Epic's products' costs to subsidize free apps, in order to reduce competition against Epic, and that Apple may have to require free apps to pay a fee if Apple loses to Epic. Therefore competition and consumers would suffer if Epic wins.
    If Epic wins, Chinese Government wins
    Beatswilliamlondon
  • Reply 4 of 18
    wizard69wizard69 Posts: 13,369member
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?

    This is bullshit as you try to use the horrors of China to deflect from the real issues Apples practices create.   If Epic wins it will be a win for all developers and users of the iOS ecosystem.    Right now Apple has a creatively stacked deck of cards that always generates a winner for them.   Frankly if you combine the issues with App Store and the other anti competitive practices Apple engages in and you will see that Apple is going to have a very tough going in the next few years as governments world wide crack down.   Apple has just gone off the deep end trying to create a world in their image forgetting that many don't have the same views as them.   One of those views is the fairness when it comes to how App store is managed.

    Frankly Apple is using some of he same idiotic excuses, that only the extremely gullible accept, that they use to fight right to repair.    In the end Apples motivations are planned obsolescence and getting a cut of every commercial app that runs on its devices.    It can be likened to Ford demanding 30% from every gas station when you fill up your tank.   It isn't something most Americans would feel comfortable with and frankly is against the law.   I just don't see Apple having a leg to stand on especially if one looks deep into existing law and what has traditionally been accepted business practice.
    williamlondon
  • Reply 5 of 18
    nubusnubus Posts: 93member
    If Epic/Tencent doesn't win, then China could decide on their own to demand an alternative AppStore for iPhone in China.
    The largest Android app store in China is not from Google but... Tencent.
    Beatswilliamlondon
  • Reply 6 of 18
    wizard69 said:
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?

    This is bullshit as you try to use the horrors of China to deflect from the real issues Apples practices create.   If Epic wins it will be a win for all developers and users of the iOS ecosystem.    Right now Apple has a creatively stacked deck of cards that always generates a winner for them.   Frankly if you combine the issues with App Store and the other anti competitive practices Apple engages in and you will see that Apple is going to have a very tough going in the next few years as governments world wide crack down.   Apple has just gone off the deep end trying to create a world in their image forgetting that many don't have the same views as them.   One of those views is the fairness when it comes to how App store is managed.

    Frankly Apple is using some of he same idiotic excuses, that only the extremely gullible accept, that they use to fight right to repair.    In the end Apples motivations are planned obsolescence and getting a cut of every commercial app that runs on its devices.    It can be likened to Ford demanding 30% from every gas station when you fill up your tank.   It isn't something most Americans would feel comfortable with and frankly is against the law.   I just don't see Apple having a leg to stand on especially if one looks deep into existing law and what has traditionally been accepted business practice.
    Your gas station example shows the flaw in your argument. If Ford built the gas station, maintained it, repaired it when needed, kept the lights and pumps on your analogy might be accurate. However, they don’t and it isn’t. Apple spends money to create, maintain and update the App Store. They supply code for developers to use. They host the apps etc. Do they have to do that for free? No of course not
    edited May 3 tjwolfBeatsqwerty52lolliverroundaboutnowfotoformatwilliamlondonbshank
  • Reply 7 of 18
    tjwolftjwolf Posts: 369member
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?
    A troll that's factually incorrect - Sweeney owns a majority of Epic shares.
    williamlondon
  • Reply 8 of 18
    22july201322july2013 Posts: 2,091member
    tjwolf said:
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?
    A troll that's factually incorrect - Sweeney owns a majority of Epic shares.
    I think Tencent owns 40%. That's a minority stake. Tencent can't make Sweeney do anything, but it sure has influence. 
    Beatsbshank
  • Reply 9 of 18
    tjwolftjwolf Posts: 369member
    wizard69 said:

    ...If Epic wins it will be a win for all developers and users of the iOS ecosystem. 
    That is nonsense, in my opinion.  If Apple is forced to allow other app stores for iOS, users will no longer have the same level of security they currently enjoy - and that additional security is what Apple's customers are wiling to pay Apple a premium for.  Apple has always had a set of rules for the app store.  Nobody was forced to abide by them - developers always had the option of simply not developing for iOS.  But developers didn't - because they could make money on iOS and its desirable and growing customer demographic.  But now Epic and some others feel that they no longer need to abide by those rules yet still have access to the platform Apple maintains and enhances.  They want to do a rather Trump'ian thing: get out of their contractual obligations by going to the courts, hoping they get a sympathetic judge.
    Beatsqwerty52lolliverj2fusionfotoformatwilliamlondonbshank
  • Reply 10 of 18
    22july201322july2013 Posts: 2,091member
    If Apple loses in court and the court orders third party app stores, then Apple could respond by letting people install Android (replacing iOS) on iPhones (I'm sure Google would cooperate with that idea) and people could get their third party app stores that way. That would comply with the court order and would give users the choice they want. After all, the users are happy with Android. So give them Android. I wonder how many people would install Android on their iPhone? 2%?

    But we all know that Epic would still gripe, because they don't really want users to be able to install third party app stores, what they want is for iOS to be rewritten to suit their personal business model.
    bshank
  • Reply 11 of 18
    BeatsBeats Posts: 2,065member
    If Apple loses in court and the court orders third party app stores, then Apple could respond by letting people install Android (replacing iOS) on iPhones (I'm sure Google would cooperate with that idea) and people could get their third party app stores that way. That would comply with the court order and would give users the choice they want. After all, the users are happy with Android. So give them Android. I wonder how many people would install Android on their iPhone? 2%?

    But we all know that Epic would still gripe, because they don't really want users to be able to install third party app stores, what they want is for iOS to be rewritten to suit their personal business model.

    This is still unfair as Android is a knockoff Apple platform. You could install identical apps and people wouldn’t know the difference. This really fu**s Apple financially. That 2% is a huge loss for Apple and win for Google without Google doing any work.

    Contrast that to a PS5 game running on Switch. It can’t because both are unique enough to be incompatible.
    qwerty52lolliver
  • Reply 12 of 18
    BeatsBeats Posts: 2,065member
    wizard69 said:
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?

    This is bullshit as you try to use the horrors of China to deflect from the real issues Apples practices create.   If Epic wins it will be a win for all developers and users of the iOS ecosystem.    Right now Apple has a creatively stacked deck of cards that always generates a winner for them.   Frankly if you combine the issues with App Store and the other anti competitive practices Apple engages in and you will see that Apple is going to have a very tough going in the next few years as governments world wide crack down.   Apple has just gone off the deep end trying to create a world in their image forgetting that many don't have the same views as them.   One of those views is the fairness when it comes to how App store is managed.

    Frankly Apple is using some of he same idiotic excuses, that only the extremely gullible accept, that they use to fight right to repair.    In the end Apples motivations are planned obsolescence and getting a cut of every commercial app that runs on its devices.    It can be likened to Ford demanding 30% from every gas station when you fill up your tank.   It isn't something most Americans would feel comfortable with and frankly is against the law.   I just don't see Apple having a leg to stand on especially if one looks deep into existing law and what has traditionally been accepted business practice.

    This has got to be the most stupid response I’ve read on AI in a LONG TIME. Complete with debunked anti-Apple catch phrases. This is up there with YouTube comments from kids who get their “facts” from YouTubers.
    qwerty52lolliverroundaboutnowfotoformatDogpersonwilliamlondonbshank
  • Reply 13 of 18
    22july201322july2013 Posts: 2,091member
    Beats said:
    If Apple loses in court and the court orders third party app stores, then Apple could respond by letting people install Android (replacing iOS) on iPhones (I'm sure Google would cooperate with that idea) and people could get their third party app stores that way. That would comply with the court order and would give users the choice they want. After all, the users are happy with Android. So give them Android. I wonder how many people would install Android on their iPhone? 2%?

    But we all know that Epic would still gripe, because they don't really want users to be able to install third party app stores, what they want is for iOS to be rewritten to suit their personal business model.

    This is still unfair as Android is a knockoff Apple platform. You could install identical apps and people wouldn’t know the difference. This really fu**s Apple financially. That 2% is a huge loss for Apple and win for Google without Google doing any work.

    Contrast that to a PS5 game running on Switch. It can’t because both are unique enough to be incompatible.
    We agree, but I'm discussing an option Apple has if the court rules against Apple.

    The 2% loss for Apple isn't in terms of selling hardware, only in terms of selling software, which is a smaller part of Apple's business. In fact some people might actually buy more Apple hardware if it could run Android, so that's a financial win for Apple.
    bshank
  • Reply 14 of 18
    wizard69 said:

    Frankly Apple is using some of he same idiotic excuses, that only the extremely gullible accept, that they use to fight right to repair.    In the end Apples motivations are planned obsolescence and getting a cut of every commercial app that runs on its devices.    It can be likened to Ford demanding 30% from every gas station when you fill up your tank.   It isn't something most Americans would feel comfortable with and frankly is against the law.   I just don't see Apple having a leg to stand on especially if one looks deep into existing law and what has traditionally been accepted business practice.
    This is an honest question, because it certainly seems like it. Did you get your talking points from Epic's hilariously bad opening statements? They used that same bullshit remark of the gas station, and it is just plainly wrong. Apple owns their store. They can have the criteria put in place for others to sell their goods at their store. If Epic somehow convinces this judge that they are in the right, it would have huge ramifications for businesses outside of technology. For instance, Target could force Walmart to allow for Target to open a mini-store and sell their competing goods, all while Walmart would have to swallow the costs. This is exactly what Epic is proposing, and all it does is benefit themselves. 
    qwerty52lolliverroundaboutnowfotoformatDogpersonwilliamlondon
  • Reply 15 of 18
    wizard69 said:
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?

    This is bullshit as you try to use the horrors of China to deflect from the real issues Apples practices create.   If Epic wins it will be a win for all developers and users of the iOS ecosystem.    Right now Apple has a creatively stacked deck of cards that always generates a winner for them.   Frankly if you combine the issues with App Store and the other anti competitive practices Apple engages in and you will see that Apple is going to have a very tough going in the next few years as governments world wide crack down.   Apple has just gone off the deep end trying to create a world in their image forgetting that many don't have the same views as them.   One of those views is the fairness when it comes to how App store is managed.

    Frankly Apple is using some of he same idiotic excuses, that only the extremely gullible accept, that they use to fight right to repair.    In the end Apples motivations are planned obsolescence and getting a cut of every commercial app that runs on its devices.    It can be likened to Ford demanding 30% from every gas station when you fill up your tank.   It isn't something most Americans would feel comfortable with and frankly is against the law.   I just don't see Apple having a leg to stand on especially if one looks deep into existing law and what has traditionally been accepted business practice.
    How dumb is this gas station analogue some people are clinging to… but let me buy into your narrative just for a momento.

    If Ford created and maintained the fuel distribution, helping station owners set up businesses, then yes. They should take a cut.

    If Ford was liable from engine problems from bad gas, specially when the car is still under warranty, then they would make sure quality control was assured, end to end.

    None of the above is voluntary work. Everything is a hassle, and you still get litigation.

    Now drop the charade! iOS, iPadOS and tvOS are virtually the only platforms that are free of piracy. Answer me this one: how much is the commission of a pirated app?

    If there ever was a instance of “penny wise, buck fool” for developers, it sure is this dismantling of the AppStore.
    williamlondon
  • Reply 16 of 18
    JinTechJinTech Posts: 742member
    Those margin calculations, Apple says, only examine one part of the iOS ecosystem. For example, they don't include the software costs that Apple has to pay to make the App Store function. Some of those costs including developing APIs and other developer tools.
    This is what I have been saying all along. It cost Apple money to run the App Store. That would be like manufactures saying they want a bigger cut from their products sold at Walmart because running and operating the actual store cost next to nothing for a billion dollar company like Walmart.
  • Reply 17 of 18
    maestro64maestro64 Posts: 4,908member
    For all those who think Developers win if Epic when, think again. First it will be appealed, thus the reason Apple Lawyer brought up the Qualcomm case. Lower judges really do not want to be over turned in a higher court especially if there is precedence. Judged do get rated on how many cases they preside over which are over turned.

    In reality most developers who are complaining most do not realize how things were done in the past and the cost to distribute software. Do they really think another store can do what Apple does at a lower costs and only charge 10%, think again, there are lots of costs to facilitate a transaction between the developer and consumer. It is not as easy as of setting up an FTP server and direct consumers to download something. As it was also pointed out Apple gives developers lots of free tool to manage all of this. I know developers pay yearly fee to be developers, but it small compared to what it would cost if you have to make all your own tools.

    Also, the government can not force Apple to provide the technology they use to run their store which maintain all the security. Keeping with the car analogies, it would be like some knockoff part company going to the courts or government demanding Ford or any car company provide trade secrets so they can make an knockoff part. It there is no precedence for something like this. Epic does not want to create a store they just want a lower commission for themselves.
  • Reply 18 of 18
    sflocalsflocal Posts: 5,511member
    wizard69 said:
    Epic is so out of line here , which judge even accepted this law suit?

    Epic is owned by Tencent, you know that company that also makes these movies that says how great the Chinese government is? And half of the board of Tencent have ties to the current Chinese government?

    Hello people?

    This is bullshit as you try to use the horrors of China to deflect from the real issues Apples practices create.   If Epic wins it will be a win for all developers and users of the iOS ecosystem.    Right now Apple has a creatively stacked deck of cards that always generates a winner for them.   Frankly if you combine the issues with App Store and the other anti competitive practices Apple engages in and you will see that Apple is going to have a very tough going in the next few years as governments world wide crack down.   Apple has just gone off the deep end trying to create a world in their image forgetting that many don't have the same views as them.   One of those views is the fairness when it comes to how App store is managed.

    Frankly Apple is using some of he same idiotic excuses, that only the extremely gullible accept, that they use to fight right to repair.    In the end Apples motivations are planned obsolescence and getting a cut of every commercial app that runs on its devices.    It can be likened to Ford demanding 30% from every gas station when you fill up your tank.   It isn't something most Americans would feel comfortable with and frankly is against the law.   I just don't see Apple having a leg to stand on especially if one looks deep into existing law and what has traditionally been accepted business practice.
    *yawn*

    *rolls eyes*

    Do you really believe what you say?  Apple creates the hardware/software for the iPhone.  It builds all the front-end/back-end systems to run it's platform.  It also provided the tools to create the apps.  So yeah, any company that provides everything is 100% entitled to demand a cut of revenue.  What rock have you been under all this time?

    30% is a bargain.  Period.  If Apple wants to lower it, they certainly are entitled to, not that they have to.  Were you even around in the days of boxed-software and computer stores like CompUSA?  I mean seriously... Apple gives developers access to literacy hundreds of millions of loyal, paying customers with far better opportunity to make money on their software than what it used to be like pre-iOS.  Get over yourself.  As a developer myself, you do not speak for me.  I remember the "old" days and don't ever want to go back to that.  Jeez.
    osmartormenajr
Sign In or Register to comment.