The antitrust expert’s verdict lies in Epic Games Inc.’s antitrust case against Apple Inc.: The split decision by Apple has been given an advantage simply because it is unlikely to be considered a monopoly.
However, there is a real chance that when Federal Judge Yvonne Gonzalez Rogers decides to take the case this summer or fall, she might try to force Apple AAPL.
To make changes to the App Store, the iPhone maker’s payment system and the 30% commission charged to developers are the expected targets among observers of the last three weeks of trials speaking with MarketWatch.
Throughout Monday̵7;s closing arguments, the judge signaled she was in trouble with monopoly forces working in the iOS ecosystem, but admitted federal courts were not doing business. The way she defines the markets involved in the historic case could lead to corrections that drive narrower and more nuanced measures. But none of the experts that MarketWatch spoke of expecting her to rule it out entirely.Apple is illegally controlling the monopoly.
“The judge will be in Apple’s favor because the law is clearly beside Apple,” said Carl Szabo, vice president of technology lobbying group NetChoice, which has a member of Google Alphabet Inc. GOOGL.
Amazon.com Inc. AMZN,
Facebook Inc. FB,
And Airbnb Inc. ABNB.
“And like the other judges, she didn’t want her judgment to be overruled.”
For more information: What each party can prove in Epic’s trials with Apple.
If anything, he said, Epic’s website and app store offered evidence of a way to “bypass” Apple’s in-app purchase system, at the heart of Epic’s lawsuit. Apple forbids app makers to advise consumers. Instead, use a different payment method that will allow them to bypass the App Store payment system and commission, as Epic tried before Apple kicked off popular game “Fortnite” from the App Store.
“I always thought that the judge might support Apple’s ability to manage their App Store, but found that Epic was enforcing ApplePay,” intellectual property attorney Ted Claypoole told MarketWatch.
Experts say the established measures that could charge a 30% commission fee or find an alternative to Apple’s payment system were more likely than the entire ruling with Apple.
“[The judge’s] question [during the case’s conclusion on Monday] Shows that she is uncomfortable with the non-competition that Epic can present at trial in terms of pricing and responding to developer concerns, ”said Valary Williams, an anti-corruption attorney. Monopoly told MarketWatch, “I’m not sure how that would translate into her final order.”
“Courts often don’t like to control prices. I think she is more likely to accept other payment methods, ”Williams said.
The ruling may depend on the market involved: Epic argued that the respective market, at the heart of the case, should be narrowed down to an iOS app, Epic’s best path to legal victory could be a confirmation of the competing platform. Android phones, in particular, are not interchangeable with iOS because of the “walled gardens” created by Apple, according to Ari Lightman, Carnegie professor of digital media and marketing at Mellon University’s Heinz College.
On the other hand, Apple insists there are tons of options for developers in the store – 1.8 million apps in 27 categories – and plenty of market competition in the form of an online store from Google, Microsoft Corp. MSFT,
Samsung Electronics Company Limited 005930,
Sony Group Corp. SONY,
Nintendo Co., Ltd. 7974,
“If I decide that the market involved is a game, there is no monopoly. But there is evidence of anti-competitive behavior, ”said Gonzalez Rogers, with an Apple lawyer on Monday.“ If I decide that the market is mobile games, how will that affect your analysis? ”
Gonzalez Rogers asked the tough questions on both sides on the final day of Monday’s trial, not specifying where she stood at one time, she warned Epic.
“Your recipe appears to ignore the reality that the customer chooses for the ecosystem. There is a lot of evidence in this experiment that in the flagship device market, this is Apple’s business strategy to create a unique ecosystem that is incredibly attractive to buyers, ”she said. That ecosystem, your economic substitution as you define them, will destroy the ecosystem they choose to enter. ”
In another exchange, she commented on Apple: “Well, Apple, not only But it was sued by Epic.It is also sued by a group of developers, not just [Epic Chief Executive Tim] Sweeney “
Apple attorney Daniel Swanson, who oversees the market implications of Monday’s litigation, could only offer this. “I’m quite sad,” he said, “but the monopoly will be gone. We think other devices iPhone owners will likely play a role. ”
For more information: Oracle hit third in Google’s legal battle, but the game is likely to continue for developers.
Wherever Gonzalez Rogers ended up in a historic case when she issued her verdict in summer or fall, don’t expect things to end there. The case is likely to go through the appeals court for years and may eventually end up in the U.S. Supreme Court, such as Google GOOGL.
v. Oracle ORCL,
According to legal experts
“As the judge noted, the outcome will not be settled by her decision as the defeated party will appeal to the federal appeals court,” said Larry Downs, program director of the Georgetown Center for Business and Policy. Public evolution of Regulation and innovation
What the trials shed is the App Store’s approach to developers and profitability, with up to 80% margins that will require some form of corrective measures, according to Apple’s fiercest critics.
“This experiment is just part of a global drive to address competition in the digital market, and I just expect it to grow,” said Meghan DiMuzio, executive director of the Coalition for App Fairness, a preferred group of companies. “A more fair deal” for app inclusion in the App Store and Google Play. Nearly 60 members include Epic, Spotify Technology SPOT,
Match Group Inc. MTCH,
And Tile Inc.
“Just as important as the Epic ruling, it is just part of a broader discussion,” DiMuzio told MarketWatch.