Factbox-Apple vs Epic case: heated arguments, dramatic calls

September 10, 2021

(Reuters) – A U.S. judge on Friday issued a ruling in “Fortnite” creator Epic Games’ antitrust lawsuit against Apple Inc’s App Store, striking down some of Apple’s restrictions on how developers can collect payments in apps.

The ruling comes after a three-week trial in May before Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California. Here are some highlights from the case:

EPIC CEO SWEENEY SAYS APPLE HAS “TOTAL CONTROL”

Tim Sweeney said Apple exercised “total control over” all software on iOS when he testified in May, and that he knew he was breaking Apple’s App Store rules by putting Epic’s own in-app payment system into the game. Apple countered it was simply trying to protect the security and privacy of its 1 billion iPhone users.

EXPERTS BATTLE

Experts make the case that Apple’s iPhone users are so loyal that the device constitutes a single-brand market. Apple has long argued that it is a minority player in thriving markets, but a decision otherwise could have far reaching implications for its business.

DISPROPORTIONATE PROFITS

Apple made at least $100 million – and likely more – from “Fortnite” in just two years, showing how lucrative the App Store model can be for the iPhone maker.

Gonzalez Rogers questioned Apple Chief Executive Tim Cook, pressing him to concede that game developers generate most App Store revenue and help subsidize other apps on the store that pay no commission.

Epic has asked the judge to order Apple to allow users to put third-party software onto their iPhones and ease its in-app payment rules.

FRAZZLED COOK

Apple saved Cook to be its star closing witness, but then Judge Gonzalez Rogers grilled him hard enough to throw the normally unflappable Cook off balance.

When Gonzalez Rogers cited a survey that found 39% of software developers were unhappy with Apple’s app distribution services, Cook replied that “we turn the place upside down” to respond to developer complaints. He later conceded that he does not receive regular reports on how developers feel about working with Apple.

GAMERS VOICE OUT

In an effort to make the trial accessible to the media and the public, Gonzalez Rogers set up audio-only phone lines that both groups could dial into, but the effort was hamstrung by the aging technology available to underfunded federal courts.

Through the trial, the masking and plexiglass required by COVID-19 precautions made some witnesses – including Sweeney – almost unintelligible on the phone lines.

During the first day of trial, when the court’s staff, struggling to get the lines working, inadvertently left the public lines unmuted, it revealed a cacophony of chatter from “Fortnite” fans who had dialed in, including some foul language and commentary such as, “if Apple wins, destroy all your Apple devices!”

(Reporting by Nivedita Balu in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila)

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