Home / Technology / Epic Games vs. Apple Trial Week Two: Everything You Need to Know

Epic Games vs. Apple Trial Week Two: Everything You Need to Know

The second week of trials between Epic Games Inc. and Apple. Inc.

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Centered on expert testimony, debating whether smartphones are interchangeable with other video game platforms and the digital age market definition.

Epic sued Apple in August and accused the tech giant of violating antitrust laws after pulling off the popular video game developer “Fortnite” from the App Store. Epic violates a contract applicable to all developers who distribute apps on their mobile devices.

The Oakland, California ruling, in which U.S. District Judge Yvonne Gonzalez Rogers will decide the results, could help transform the multibillion-dollar market for mobile app distribution. hold

Judge Gonzalez Rogers has been used to handle cases in the tech industry, and neither Apple nor Epic is her courtroom newcomer. She said she helped her son succeed as an aviation engineer by rejecting his video games. But also noticed that her daughter has a Nintendo. Co., Ltd.

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7;s an overview of what happened so far and what’s coming next:

Who are Epic’s key witnesses and what do they say?

David Evans, an economist at the University of Chicago, argues on behalf of Epic that game consoles are not a good substitute for smartphones as they cannot be used to access the Internet by consumers on the go. If so, “people won’t be using smartphones,” he said, adding that while the Nintendo Switch is portable, there’s no mobile network connection.

Dr Evans added that Apple’s rules prevent developers from informing consumers that their prices for in-app purchases take account of the iPhone maker’s 30% commission, or whether consumers may. Get a better deal elsewhere.

Phil Schiller, a friend at Apple, also participated in the experiment.


David Paul Morris / Bloomberg News

Also talking about Epic is Susan Athey, an economics professor of technology at the Stanford Graduate School of Business.She said Apple locks consumers into a mobile operating system, known as iOS, because in many cases switching devices they will. Purchased apps have to be purchased and other obstacles have been addressed.

Epic’s attorney, Yonatan, also cited a 2013 email from Apple Executive Eddy Cue to Apple Fellow Phil Schiller and current Chief Executive Tim Cook: “ Who would buy a Samsung phone if they had the apps, movies, etc. bought? ? Now they have to spend hundreds more to get to where they are today. ”

Who are Apple’s key witnesses and what do they say?

Lorin Hitt, a professor at the Wharton School at the University of Pennsylvania, discusses in-app purchase pricing, noting that developers can charge different prices on iOS devices to demonstrate App Store flexibility. It cut developer fees for selling long-term subscriptions in 2016, and has said it plans to do the same this year for companies generating less than $ 1 million in revenue annually through marketing.

Hitt said anti-competitive measures were likely to result in a decrease in quality. But it hasn’t happened with iPhone and iPad apps as developers see their revenues increase over time, “they can raise prices because consumers recognize the value of what they have to offer.” He said

Legal officials pushed court boxes into a building in Oakland on Thursday.


David Paul Morris / Bloomberg News

Hitt also rejected the notion that Apple locks iPhone and iPad users into the mobile ecosystem. “One thing that consumers really have changed,” he said. He added that the high customer retention rate was not evidence of replacement costs. “I stick to the products I have because I like the products I have.”

Another Apple witness said that Epic’s conclusion that the App Store was a monopoly was incorrect, said Richard Schmalensee, a professor of economics at the Massachusetts Institute of Technology, that Apple’s behavior was similar to that of credit card companies because they offered a platform. Transactions and regulations are there to ensure they collect commissions from sellers.

Schmalensee also argues that because Apple has a knack for identifying hardware connected to the App Store, it benefits consumers by completing, private and secure purchases. With multiple third-party carriers, users can’t automatically share purchases with family members.

Apple’s stock market cap hit a new record in 2020, but a long-standing dispute with app developers is emerging in the public view.The WSJ explains why high-profile companies like Epic Games, Spotify and Tinder are against the rules. App Store’s video / illustration: Jaden Urbi / WSJ (video from 10/1/20)

Why is the banana in the tuxedo formed during the experiment?

Early week’s testimony from Epic vice president of marketing Matthew Weissinger added to the hype when referring to the banana-like “Fortnite” character known as Peely during Mr Weissing’s inquiry. Apple attorney Nger expressed Peely’s alter ego wearing a tuxedo “Agent Peely”, saying it was inappropriate to show Peely without a suit in a federal courtroom. To keep the record straight, Epic’s advisers questioned whether there was anything inappropriate about Peely without a suit. Mr. Weissinger replied: “It’s just a banana.”

Weissinger also testified that his employer had a much better relationship with console maker Sony Group. Corp

, Microsoft Corp

And Nintendo, more than ever with Apple, the promotional partnership with Apple on “Fortnite” was less successful and less targeted for gamers, he said.

When will we hear from Apple CEO Tim Cook?

Cook may have been the last witness Apple called part of his defense.

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Is Apple restricting unfair competition in the mobile app market? Why or why not? Join the conversation below.

On Tuesday, Judge Gonzalez Rogers asked the parties if they were following witnesses and when Cook planned to take over, Epic’s attorneys said they would conclude the testimony. This week, Apple’s attorney, Richard Doren, said about Mr. Cook, “We believe it will be the final day of the case.”

But by Friday it looks like the trial will be extended to week four. Judge Gonzalez Rogers said she had reserved the courtroom for another day.

Cook has been Apple’s chief executive since 2011 and is expected to testify about the company’s values, organization and operations, the launch of the App Store, and the competition that Apple faces. The company, saying in a congressional hearing last year, it helped create a reliable and secure user experience. Under his leadership, Apple’s market value rose to more than $ 2.2 trillion from about $ 350 billion.

Write to Sarah E. Needleman at sarah.needleman@wsj.com.

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