Nov 15, 2022 - News

Epic takes a second shot at Apple

Illustration of the App Store logo stepping on the Epic logo.

Illustration: Aïda Amer/Axios

Lawyers for Epic Games, the Cary-based video game maker behind Fortnite, walked into a San Francisco courtroom Monday to begin round two of its David versus Goliath legal battle against Apple.

  • The question at stake: Does the influence of Apple's App Store, which every one of the world's 1 billion-plus iPhones must use, give the company an illegal advantage and stifle competition?

Why it matters: The legal battle, which dates back to 2020, is perhaps the most high-profile antitrust case in a generation and could have a huge impact on the digital economy if Epic's complaint against the world's largest company is successful.

State of play: Currently, Apple has tight control over its App Store and charges a commission of 15-30% on every digital service sold through an iPhone.

  • That commission has made the company around $20 billion a year, according to one expert witness. Apple says the fee is important to paying for the iPhone's services, security and research and development.

Yes, but: Epic argues the fee is too high of a burden for developers like itself who have no alternative option if it wants to do business with iPhone owners. (Epic is also suing Google for how it operates its Android operating system for smartphones.)

  • If Epic had its way, it would try to operate its own Epic Games Store as a rival app store on the iPhone.

What they're saying: Epic's lawyer Thomas Goldstein said in court Monday that Epic can't really compete with the App Store because the Epic Games Store is completely barred.

  • "The only thing kept out by Apple's walled garden is competitors," he told the trio of judges hearing the case.

The other side: "Apple had an edge over the competition based on security," Apple's lawyer, Mark Perry, said. "... What's kept out by walled gardens is fraudsters and pornsters and hackers and malware ... who wish to hijack the phone."

The intrigue: Epic and Apple just so happen to be neighbors now, as Apple renovates a Cary office building in advance of opening an East Coast headquarters in Research Triangle Park.

Be smart: A resolution is going to take a while. Even if the appeals court returns a decision within nine months, this case is big enough that it could find its way to the U.S. Supreme Court, perhaps extending the case until 2024 or 2025, the Associated Press reckons.


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