Apple asks judge to close courtroom for Epic’s expert App Store witnesses

From Bloomberg’s “Apple Trial Threatens to Reveal App Store’s Commission Bounty,” posted Friday: 

Apple Inc.’s App Store has long been touted as a growth engine. Now, the world’s most valuable company is fighting in U.S. court to not reveal in public just how lucrative it is.

In a trial scheduled to start Monday, Epic Games Inc. is alleging that the iPhone maker’s 30% commission on app sales is a violation of antitrust law, cheating developers and consumers. Epic’s long-odds gambit to gain free access to the App Store, which has garnered support from mom-and-pop developers and giants like Microsoft Corp., comes amid increasing global regulatory scrutiny of Apple’s domination of software on its ubiquitous phones. On Friday, the European Union issued a warning over the App store, saying it thinks Apple abused its power.

Apple has asked the judge in California to close the courtroom when Epic calls on an expert witness to discuss the “the purported ‘profitability’ of the App Store on a standalone basis.” Apple said in a filing late Wednesday that it isn’t objecting to the court considering such evidence brought by Epic, but is “concerned that analysts, investors, reporters, and others in the marketplace could misinterpret the public disclosure of non-public, unaudited financial information.”

My take: Misinterpretation is a given. What I can’t tell is whether Epic thinks the App Store is too profitable or less profitable than Apple lets on.

The trial is scheduled to start Monday.

8 Comments

  1. Kirk DeBernardi said:
    “My take: Misinterpretation is a given.”

    Oh, you are SO spot-on on this one PED.

    Shame on Apple for making the App Store an undeniable success for everyone involved — especially the end consumer.

    Where in the encyclopedia does it say that capitalism can’t make too much money?

    My father told me long ago that that is one of the most enduring blessings of capitalism — the tempering of unbridled creation to the benefit for all.

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    April 30, 2021
    • Kirk DeBernardi said:
      I hope Epic gets their ass handed to them in court.

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      April 30, 2021
  2. Fred Stein said:
    Yesterday Microsoft announced they will reduce their cut of Games revenue from 30% to 12%. Sony and Tencent are investors in Epic.

    This ‘game’ is being played at many levels: PR, legal, regulatory, other industry competitors, etc. All have their own self-interest, AND NOT public interest as they all claim.

    Apple gaming revenue (from Aug 2020 per sensor tower and statista) grew 23% which beats the industry as whole. No wonder they are perceived as a threat.

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    April 30, 2021
  3. David Emery said:
    I believe we have to recognize that, while the App store fees may be consistent with ‘industry practice,’ the charge that Apple provides preferential treatment to its own apps when they compete with others is a significant vulnerability. That’s true even without a ‘favorable definition of the market’ that Epic and others seek.

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    April 30, 2021
  4. Michael Goldfeder said:
    @ David Emery: So when Costco markets their own Kirkland chocolate chips and replaced Hershey’s that’s an antitrust violation? Or it makes them vulnerable to a complaint? All store owners can place their own house brands inside and compete with all other products. Outsiders pay “shelf fees” to be inside these stores. That’s been going on since forever. Epic’s claims and those of the EU are absolutely absurd!

    Everyone wants access to Apple’s customers for free. They say Apple is anticompetitive and being a bully by favoring their own Apps. Just like Costco, Safeway, Walmart, and every other business’ do every day who market their brands.

    Epic will lose their Federal District Court case. Then the hysteria will start to erode and fade away.

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    April 30, 2021
    • David Emery said:
      “@ David Emery: So when Costco markets their own Kirkland chocolate chips and replaced Hershey’s that’s an antitrust violation? ”

      It certainly allows FTC to make a case against Costco. I’m not saying FTC would win that case.

      The much more interesting example is when Amazon creates a product that is the clone of another company’s product, and then promotes its own “Amazon Basics” product to the disadvantage of the originator. And I believe there have been antitrust investigations against Amazon for exactly that practice.

      What’s key in these cases is that the ‘store owner’ is competing with a third party in -exactly the same product-. That is explicitly NOT the case with Epic, Apple is not a game developer.

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      April 30, 2021
  5. Michael Goldfeder said:
    @ David Emery: Agreed.

    1
    April 30, 2021

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