Apple asking judge stop iOS, App Store from being labeled 'essential facility'

AppleInsider

As the Epic Games v Apple case starts to wind down, Apple has filed a motion requesting an early denial of the claim that iOS is an "essential facility."

Credit: Apple

The ongoing Epic Games versus Apple dispute is in its third week of trial, but Apple is now seeking a partial ruling as soon as the case concludes. It concerns just one of the claims made by Epic Games, but Apple says the trial has demonstrated that the "Fortnite" developer has "effectively abandoned this claim."

Epic's claim was that Apple violated the Sherman Act "through its unlawful denial" of access to iOS and the App Store. Epic Games further claimed that iOS was an essential facility.

"At trial, Epic adduced no proof in support of this claim," writes Apple in its filing, the full text of which is available below. "On the contrary, Epic's principal expert [Dr David Evans] expressly disclaimed any opinion on essential facility, and (in response to a direct question from the Court) rejected the notion that iOS should be treated as a public utility."

Apple further said that Epic Games itself demonstrated that the claim that iOS and the App Store were essential was spurious. "Epic's own experience, as established by the trial evidence, confirms that there is nothing 'essential' about iOS," writes Apple.

"Fortnite was a success before it was made available on the App Store...," it continues, "and Fortnite's revenues from iOS (prior to its removal) accounted for just 7% of its total revenue."

"When asked by the Court what Epic's 'backup plan' was if the Court did not grant the requested relief," argues Apple's filing, "Mr. Sweeney did not suggest that Epic would be out of business, but instead testified that Epic simply 'would have to live with' its ejection from the App Store, 'without supporting the iOS platform.'"

Apple's filing details multiple points from the trial which, it claims, rebuts Epic's claim that iOS and the App Store is essential, and that Apple denies access to both.

Instead, Apple suggests that "the real basis for Epic's claim is that it does not like the terms of access it does have."

"Having completed its case-in-chief, Epic has no factual, expert, or legal support for its theory of essential facility, and has effectively abandoned this claim," says Apple.

Furthermore, Apple also says in the filing that even if the judge considers iOS and the App Store to be those essential facilities, Epic has access to both, making the argument moot.

While the filing asks that the Court grant judgement on this claim in favor of Apple and against Epic, there remain a further nine counts to be considered in the games company's case.

Epic vs Apple - Partial Findings Petition by Mike Wuerthele on Scribd

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The_New_tonton

IMO this should be granted. Anyone and everyone has the right to choose Android and Windows and avoid Apple 100%.

foregoneconclusion

There just isn't much substance behind Epic's antitrust claims. 

dewme

Epic’s intention from day one has clearly been to get the US government to essentially nationalize Apple’s App Store. This is 100% self serving on Epic’s part because they are lazy.

lkrupp

This whole dispute that’s going on about Apple worldwide relies on a convoluted definition of monopoly. How can it be construed that people have no choice in smartphones? The whole world knows by now that buying an iPhone means you knowingly agree to live in the walled garden. You have the choice not to buy an iPhone if you don't like that. To buy an iPhone and THEN start to bitch about the ‘monopoly’ of the walled garden seems irrational and petty. Then there’s fact that iOS is a minority mobile operating system worldwide. Even in the U.S. it’s market share is below 50%.

I personally reject the idea that Apple is a monopoly unto itself and I hope judges and governments come around to that opinion.

Bombdoe

This sums it up for me. 

Instead, Apple suggests that "the real basis for Epic's claim is that it does not like the terms of access it does have."

dantheman827

lkrupp said:

This whole dispute that’s going on about Apple worldwide relies on a convoluted definition of monopoly. How can it be construed that people have no choice in smartphones? The whole world knows by now that buying an iPhone means you knowingly agree to live in the walled garden. You have the choice not to buy an iPhone if you don't like that. To buy an iPhone and THEN start to bitch about the ‘monopoly’ of the walled garden seems irrational and petty. Then there’s fact that iOS is a minority mobile operating system worldwide. Even in the U.S. it’s market share is below 50%.

I personally reject the idea that Apple is a monopoly unto itself and I hope judges and governments come around to that opinion.

iOS has around 60% in the US last I checked.

applguy

dantheman827 said:

lkrupp said:

This whole dispute that’s going on about Apple worldwide relies on a convoluted definition of monopoly. How can it be construed that people have no choice in smartphones? The whole world knows by now that buying an iPhone means you knowingly agree to live in the walled garden. You have the choice not to buy an iPhone if you don't like that. To buy an iPhone and THEN start to bitch about the ‘monopoly’ of the walled garden seems irrational and petty. Then there’s fact that iOS is a minority mobile operating system worldwide. Even in the U.S. it’s market share is below 50%.

I personally reject the idea that Apple is a monopoly unto itself and I hope judges and governments come around to that opinion.

iOS has around 60% in the US last I checked.

You're both correct.
iOS smartphone US market share is around 50%
iOS tablet and smartphone US market share is around 60%

davidw

dantheman827 said:

lkrupp said:

This whole dispute that’s going on about Apple worldwide relies on a convoluted definition of monopoly. How can it be construed that people have no choice in smartphones? The whole world knows by now that buying an iPhone means you knowingly agree to live in the walled garden. You have the choice not to buy an iPhone if you don't like that. To buy an iPhone and THEN start to bitch about the ‘monopoly’ of the walled garden seems irrational and petty. Then there’s fact that iOS is a minority mobile operating system worldwide. Even in the U.S. it’s market share is below 50%.

I personally reject the idea that Apple is a monopoly unto itself and I hope judges and governments come around to that opinion.

iOS has around 60% in the US last I checked.

That's about 60% based on 2020 US quarterly sales figures. It has only been in the past year that iOS has surpassed Android in US quarterly sales.  And It has only been in the last 2 quarters, that iOS sales has been 60% or above. That's because Apple released new 5G iPhones and new iPads in the last half of 2020. At the end of 2019, Android marketshare in the US stood at about  52% and iOS at about 48%. 

Since 2012, iOS has never been over 50% of quarterly sales in the US, until last year. It has been below 45% in some quarters (When Samsung releases their new line.)  Apple did not all of sudden gain over 10% marketshare in the US, in one year. They only gained 10% of the quarterly sales in that time. 

https://leftronic.com/blog/android-vs-ios-market-share/ ;   

And here's why one can't use recent quarterly sales figures, when trying to determine iOS marketshare in the US. An extreme example would be, if Apple were to all of a sudden discontinue selling iPhones and iPads with iOS, would iOS marketshare be zero? 

https://www.theguardian.com/technology/2013/nov/07/android-market-share-smartphone-users-google-apple

So right now, I doubt if iOS is anywhere near 60% of US marketshare when using installed base. But it might be soon, if Apple can keep up their near or above 60% US quarterly sales numbers for another year or two.

And remember, "monopolies" are not illegal. It's only when one abuses their dominate market power, that it becomes a matter of anti-trust. And one don't need to have a "monopoly", to have dominate power in the market. 

https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined
 
Companies that would be considered "monopolies", if they were to abuse their dominate market power, are more common than most realize. 

https://www.cheatsheet.com/money-career/10-companies-you-didnt-know-had-near-monopolies.html/ ;   

radarthekat

What @davidw said.

Apple wants judgement on this point as precedent to present in any future cases and in defense against a US government Sherman Act investigation, and also the parallel EU investigation.  

The monopolist argument is a slippery slope.  Apple themselves could file a case against any retailer that takes a cut for selling iPhones, suggesting Walmart has a monopoly on Walmart shelf space, Target has a monopoly on Target shelf space, etc.  How dare these shelf space monopolists charge margins on products sold?  How much did it really cost to put up that 4” of shelf that an iPhone consumes?  Why should Apple Pay so much more in absolute terms when a $30 toaster oven consumes 24” of shelf in the same store?  These retailers are obviously abusing their shelf-space monopoly power.  Same for movie theaters selling popcorn.  I want to set up my popper in the lobbies too.  I demand access at equal cost.  And I also want to be able to sell a competing in-game currency to Fortnight’s Vbucks.  Take that, Epic Games!