Between Epic Games and Apple, the war is over. After three weeks of hearings, the trial between the two firms is about to be concluded, with the hearing last Friday of Tim Cook, current CEO of Apple. The questioning focused on the economic model of the Apple App Store, considered too greedy in its margins by the opposing party.
Prepared for several months, the trial between Apple and Epic Games should finally come to an end. In question, the desire of the video game publisher to integrate purchases directly into Fortnite without paying commission fees from Apple’s App Store platform. In return, the firm had removed the game from its platform last summer. Epic Games is therefore now suing Apple for anti-competitive practices.
The judge, Yvonne Gonzalez Rogers, must indeed decide on the main argument of Epic Games, the 30% fees applied by the App Store on in-app purchases. If the decision is in their favor, it could allow the video game distributor to force Apple to allow it to install alternative app stores on the iPhone and thus avoid the fees.
Tim Cook, manhandled by the judge
During Tim Cook’s questioning, a compromise was suggested where Apple would allow a company like Epic Games to link app users to a web browser to complete transactions, instead of forcing them to use the purchase mechanism. internal Apple. The judge told Apple’s CEO that “the gaming industry seems to generate a disproportionate amount of money compared to the intellectual property you give them and everyone else. “In essence, it’s almost like they’re subsidizing everyone else.”
Tim Cook said Apple faces stiff competition for developers and users, leading the judge to respond, “You don’t have any competition in these in-app purchases, however.” Doubts have also been raised that Apple’s Small Business program, which cut App Store fees for small developers in half, was made for the sake of helping small businesses during the pandemic. Covid-19
Seeing it differently, the judge expressed some doubts about the real reasons that led the App Store to lower its fees; “It seemed to be the result of the pressure built up from the investigations, the legal proceedings,” she said.
Apple, between monopoly and fierce competition
Prior to this speech, Tim Cook said Apple faces stiff competition in the smartphone business and that in the United States, the iPhone only has a “roughly 30%” market share. Internationally, the iPhone has around 15% market share, he said. It is not usual for the American firm to question its dominance in the smartphone market and place itself at the same level as other foreign competitors. According to IDC, Apple shipped 41.6 million iPhones in Q3 2020, down 10.6% year-on-year, placing the company in fourth position for the first time with 11.8% shares.
“This drop was expected and is mainly due to the delay in launching the iPhone 12, which usually takes place in the third quarter. Regardless, the iPhone 11 series performed exceptionally well, contributing the majority of Apple’s volume, followed by the SE device ”. Apple is expected to experience growth in the coming quarters thanks to early strong demand for the iPhone 12 coupled with robust trade-in offers from major carriers, particularly in the United States.
Security and control arguments
Apple argued that controlling its App Store, the only way for consumers to install software on iPhones, is essential to the company’s promises of security and privacy to its users, and a guarantee of quality. in such a competitive market. “We could no longer make the promise of privacy, safety and security if Epic Games wins,” Cook said. For its part, Epic Games maintains that security is an excuse to charge fees and keep control over software makers.
Asked by lawyers for Epic Games, the executive declined to answer a question about whether Apple’s iPhone competes with Google’s Android in the operating systems market. The CEO of the Cupertino company said he was investigating regularly to find out if iPhone users switch to Android devices. Also, he was questioned by Apple’s lawyers about iMessage, the messaging program – exclusive to Apple products – he replied that he did not think that the lack of iMessage on Android had prevented users from using iMessage. iPhone to move on to the competition.
The three-week trial ends today, but Judge Rogers hinted this week that it could be weeks or months before she makes a decision. After that, the dispute is likely to be appealed, she added.