Dashed off without benefit of notes, recordings or a law degree…
On market definition:
Epic wants to define the relevant market as Apple’s app distribution system. Apple wants to define it as the smartphone market. At one point the judge suggested she might define it as the market for mobile games, which tends to favor Apple because it doesn’t have dominant share of that market.
The fairness prong:
Apple could be on the hook even without a monopoly, according to Epic, by the third prong of the Sherman Act (I think that’s what they said). Apple maintained the court must pass the first prongs (including finding that Apple has monopoly control of the relevant market) before it considers fairness.
Balancing comes up when the defense (Apple in this case) offers what it maintains are sound competitive reasons for the alleged anticompetitive behavior. In that case the judge must weigh those benefits against the harm to consumers that would be caused if the behavior was curtailed. The judge seemed to feel that was an exercise she would have to perform.
As she did when questioning Tim Cook, the judge noted that impulse in-app purchases are enormously profitable for Apple and that the company seems to face no competitive pressure in that space. One idea she floated with Tim Cook is that Apple get paid only once — when it brings the gamer to the game — and that the rest of the revenue from in-app purchases should go to the game publisher.
The walled garden:
The judge seemed receptive to Apple’s argument that letting Epic’s app store — and apps Apple hasn’t approved — into the walled garden would destroy the relatively malware/porn/crime-free ecosystem Apple has worked so hard to create and sustain. Not good for Epic.
I was riding my bike during the debate and missed some of the colloquy. Feel free in the comment stream to correct my memory or fill in the blanks.