Epic vs Apple: what we learnt from the trial that could change the iPhone

Financial Times ^ | May 25, 2021 | Patrick McGee, Reuters

[ScubaDiver]

The British/English version of ‘learned.’ It doesn’t sound correct to an American ear, but to them, it’s perfect English.

[The MAGA-Deplorian]

Change the iphone? Other than size and power, is that really possible?

[ScubaDiver]

I think that probably shouldn’t fly, either. To me, Apple really screwed the pooch when they banned Parler, effectively disallowing it to run on any of its OS including iOS. Imagine the antitrust pitchforks that would be out for Microsoft if Microsoft retained the ability to foreclose specific applications from running on its operating system. People would be pissed, rightly and governments would respond with fine threats.

Apple should be allowed to offer a walled garden for users who want to the benefits and security of a walled garden. But, for others, they have to make it easier to sideload apps on every OS.

[ScubaDiver]

In fairness, the look and feel to iOS got a big update with iOS 14 which isn’t reflected in that meme because it stops at the iPhone 6.

[SunkenCiv]

I wonder if the trial, which took place in California, was in Carmel?

[SunkenCiv]

Teadrinkers.

[ConservativeMind]

Fair point, but if Apple could only review programs for security, then content is not required to be in scope.

In essence, Apple would have to allow all apps that passed the security scan.

[SunkenCiv]

Yup. True. It's not generally known in the US, but the UK went wild when Apple introduced aluminium notebook computers.

[SunkenCiv]

The battery life has been going up in relation to the overall processing power, and the next gens will improve that some more, while adding cores.

[jurroppi1]

I wondered when someone would bring that up.

[Menehune56]

American: Learned, Burned
British: Learnt, Burnt

[fireman15]

Why post an article that is behind a pay wall? Trying to encourage the FR tradition of commenting without reading?

It doesn't take a lot of effort to get around the FT pay wall. Using the brave browser I used DuckDuckGo.com to search for the title of the article “Epic vs Apple: what we learnt from the trial that could change the iPhone”. The first link that came up was from scoopnest.com and it had an embedded link to https://www.ft.com/content/fc8fd505-2e75-4646-b2a7-34d32796f32a which went around the paywall in the brave browser but interestingly enough still does not work in Microsoft Edge.

Here is a longer excerpt from the article that gives a better idea what the gyst of the lawsuit is actually about... Apple's ongoing monopolistic behaivior. Posting the complete article would violate FT and Free Republic terms of use.

"When Epic Games, the maker of Fortnite, opened its case against Apple at the start of this month, accusing the iPhone maker of operating an illegal monopoly, the legal analyst Nick Rodelli gave the software developer a one-in-three chance of prevailing. Others put the odds even lower."

"By the time the judge retired on Monday to consider her verdict, which could have big consequences for a billion iPhone users and thousands of app developers — not to mention Apple’s profits — the case looked harder to call."

"Rodelli, who works for the investment research firm CFRA, put the chances at 55 per cent in Epic’s favour. Apple, he said, had lost credibility by pleading ignorance on key questions, while Judge Yvonne Gonzalez Rogers appeared to be more interested in present-day business facts than older legal precedents — a plus for Epic, which has conceded its case lies on the “frontiers” of antitrust theory."

"Here are five takeaways from the trial:"

"App Store margins"

"Apple threw Fortnite out of the App Store last year when Epic tried to get round the 30 per cent commission that the iPhone maker charges on app sales and purchases made inside the smartphone’s games."

"Epic claimed that the App Store operates with a 78 per cent profit margin and that this reflects a monopolistic stranglehold on developers, who are forced to go through the App Store to reach iPhone users. Emails among Apple executives going back to 2010 indicated the App Store was already more profitable than anticipated early on." "Apple disagreed but did not rebut it with a figure of its own. It argued it could not calculate a margin figure for the App Store because it does not break out the costs and revenues that way."

"That allowed Epic to argue that Apple’s reluctance to discuss the details was itself evidence that the iPhone maker is aware of the anti-competitive optics at play."

"Tim Cook’s testimony Observers of the trial saw a turning point during the testimony of Tim Cook on Friday last week. He also tried to sidestep questions about the issue of profit margins, and much else, too."

And the article goes on from there, but this probably is enough to give a better idea of what the article is actually about so that appropriate comments canbe made.

[Starcitizen]

As a mobile games developer, Apple is doing same thing it threatened years ago under the guise of security.

They were going to ban any game not made directly with native iOS tools. No Unity3D engine, no Unreal Engine. No Xamarin, No Cocos. Nothing. That would have reduced Apple a has-been.

The Epic Fortnite issue important as a gamer can but an add-on through (in-app purchase) on the Epic Games Store (or the PlayStation Store or the Microsoft Store or the Google Play Store and the add-ons will function cross-account) only Apple disallows this.

[fireman15]

Pinging Swordmaker...

[PIF]

Excerpt - no link

Epic v. Apple fight: Billions at stake as judge determines fate of App Store
by Alexis Keenan May 25, 2021
Alexis Keenan is a legal reporter for Yahoo Finance and former litigation attorney. Alexis Keenan on Twitter @alexiskweed.

While Wedbush analyst Dan Ives predicted that Apple would win its court battle with Epic, he pointed out that the tech giant has also faced antitrust scrutiny in both the European Union and the U.S. In October, House Democrats issued a damning report on Big Tech finding that the App Store allowed Apple to “generate supra-normal profits.”

“We continue to believe Apple comes out with a victory in this Game of Thrones battle, but clearly risks exist if the Judge goes against Apple,” Ives said. “We believe Apple winning the Epic case will remove a major overhang on the stock, although Big Tech remains in regulatory scrutiny for years to come.”

[SunStar]

I’d say Apple should allow other sales options, but that only Apple-certified/reviewed apps be allowed on iPhones.

I think device users should be allowed to directly/side-load apps onto their iPhones, just like they can on Android. This is why Google isn't being sued too. Epic could then offer their app directly to their users, Apple can offer what they want on their store. That would be called "freedom". I've been waiting for someone to challenge Apple on this issue, and I'm very happy to see Epic try.

[VTenigma]

I guess I should have looked at the byline better.

[SunkenCiv]

Thanks PIF. “We’ll use your system, because it maximizes our market penetration, but then when you’re not looking we’ll change the rules under which we agree to...” No, ya won’t. :^D

https://news.yahoo.com/epic-apple-antitrust-app-store-case-billions-at-stake-133246708.html

[coon2000]

or you could be really free and just buy an Android. That’s “freedom”. Then what Apple does will mean nothing to you.

[Swordmaker]

"Epic claimed that the App Store operates with a 78 per cent profit margin and that this reflects a monopolistic stranglehold on developers, who are forced to go through the App Store to reach iPhone users. Emails among Apple executives going back to 2010 indicated the App Store was already more profitable than anticipated early on." … "Apple disagreed but did not rebut it with a figure of its own. It argued it could not calculate a margin figure for the App Store because it does not break out the costs and revenues that way."

The reason that Apple could not provide an exact margin for the App Store is that it’s programming of iOS APIs which the iOS developers use, or the SDKs are not charged in the costs of operating the App Store but are intrinsically a cost of operating it. They are developed along with the development of iOS and charged there.

This 78% margin claim is not even possible as the maximum theoretical revenue from the App Store before costs, which include development of APIs, maintenance of server farms, leasing of non-owned server space, credit card servicing, Point-of-sales, loss prevention (my lady’s Goddaughter works for Apple in iOS App Store’s loss prevention fraud prevention department), customer service, etc., is the 30% commission from sales. To claim that Apple is operating with a 78% profit margin on their App stores is patently absurd and shows an overall and abysmal ignorance of GAAP (Generally Accept Accounting Principles). Apple returned approximately that amount of revenue TO the developers, not retained it for themselves! Most other app stores from other platforms kept more.

This Obama appointed leftist judge is more interested in hers, Epic’s, and others’ feelings about Apple’s App Store than she is about the rule of law and Anti-trust precedents… she is as much as admitting. She may rule against Apple, but she will be over-turned on appeal if she does. She is NOT an Anti-Trust specialist court. She is merely a District Court judge with a Progressive bias. —PING!

EPIC GAMES vs. APPLE PING!

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