Epic vs. Apple: Four ways to split the baby

From Bloomberg’s “Epic-Apple Judge Signals Her Ruling Won’t Please Either Side” posted Tuesday:

Here’s how some outcomes could play out:

    • No change to status quo: The judge rejects all of Epic’s claims against Apple, granting the iPhone maker a sweeping victory. This would result in no forced changes to the App Store, allowing Apple to continue to require developers to distribute their software exclusively through its store and ban third-party in-app-purchase systems.
    • Tweaks to App Store policies: The judge modifies Apple’s license agreements to allow third-party App Stores on iOS. She could also rule that Apple has to provide ongoing support for third-party stores so that they don’t break from future software updates. The judge will decide whether this exemption to App Store rules applies only to Epic or is required for all developers.
    • Sweeping changes: The judge finds the App Store is anticompetitive and issues an injunction, as requested by Epic, that blocks the store from carrying on business as usual. In this scenario she might rule that Apple must make a combination of changes that include providing support for third-party app download stores and permitting in-app transactions through alternative payment systems.
    • A compromise: The judge issues a more nuanced decision that mostly retains Apple’s control of the App Store and its in-app-purchase system. But Apple might have to allow to developers to have links, which could be in the form of a button in an app, to lead users away from the App Store to payments systems on the web where they can buy virtual goods at lower rates.

Legal experts gave Apple the advantage heading into the trial. But a complete victory for the iPhone maker looked less certain Friday during the judge’s sharp questioning of Chief Executive Officer Tim Cook, when Gonzalez Rogers voiced skepticism about Apple’s argument that the benefits of its tight controls on how apps are vetted and marketed outweigh Epic’s antitrust claims.

My take: The compromise Bloomberg proposes seems like a good bet.

9 Comments

  1. Aaron Belich said:
    Change anything and it’ll be a ripple through Sony, Nintendo, Microsoft, and anyone else’s console marketplaces.

    5
    May 25, 2021
  2. Fred Stein said:
    Four names are listed at the bottom of the BB article. It seems none listened to the trial on Monday. YGR will not make a ruling that would over-turned.

    On Monday, she strongly indicated that mobile is the market, not just iOS; And that consumers chose Apple’s wall garden vs. Android; And that Epic seeks to invalidate that consumer choice.

    She may allow links. That won’t satisfy Epic who want the impulsive purchase in an immersive game; And who want other developers in their store. Minimal impact to Apple.

    8
    May 25, 2021
  3. Michael Goldfeder said:
    After all is said and done Epic’s legal position was doomed when Tim Sweeney stated in his testimony that had Apple offered them a better deal he would have accept it and moved on. That destroyed IMO what was a fatally flawed antitrust claim from the start. There isn’t a cap on profits for a company last time I checked. It’s called the free marketplace.

    7
    May 25, 2021
  4. Jerry Doyle said:
    I’m sure there will be a compromise. Those of you on this blog with a legal background know that judges prefer neither side tastes victory. No one leaves the court believing his/her side “won.” The settlement presents us “no winners” and “no losers,” but each side feels to a degree they have been screwed. So, know that neither party walks away with a smile on its face relative to the outcome and there will be no celebration on this blog, just sighs of disdain & relief.

    2
    May 25, 2021
    • David Emery said:
      And that’s after making it as uncomfortable to both sides as possible to force a settlement before the judge issues a ruling… (I always thought that was ‘justice deferred’.)

      2
      May 25, 2021
  5. David Emery said:
    Since no judge likes to be overruled on appeal, her opinion will need to be well justified. That’s probably what will take the time, writing an opinion that will stand up to the losing attorneys and then the Appeals Court.

    1
    May 25, 2021
  6. Alan Trerise said:
    Apple would appeal any compromise. All developers would change to a free trial/paid upgrade model just to get the extra 30% if they could link out for the upgrade. There is also a web view in iOS which displays a web page in an area of your app. You wouldn’t even have to switch to safari. You give a developer any daylight and they will find a way to exploit it.

    I honestly don’t get the whole issue. Apple established the 30% on day one 13 years ago. They have never increased it; only lowered it. If your revenue plan doesn’t take the cut into account then you shouldn’t be in the app business.

    10
    May 25, 2021
    • Bart Yee said:
      I agree with you Alan, Once you start messing with a system that has been functioning well, its opening Pandora’s box – the intended and then unintended consequences (lost and compromised security, management, and control of 3rd party app stores leading to legions of user experience issues or outright malware penetration of the Apple ecosystem) all get pointed to Apple first and maybe the outer stores. Should Apple and Apple users have the right to sue the 3rd party stores if their distributed apps lead to bad actors, fraud, identity and data theft, etc. etc., all in the name of the store operators making more profits?

      1
      May 26, 2021
  7. Gregg Thurman said:
    Jeez I tired of outcome speculation/fodder. I hope this is the end of it until YGR’s opinion is rendered.

    5
    May 25, 2021

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