Apple may have won most of the verdicts in the lawsuit filed against it by Epic Games, but the higher the appeals go, the harder it is becoming.
When the judge ruled in the case brought by Epic Games, the maker of the uber-popular game Fortnite, Apple celebrated. Nine of the rulings went in its favor. However, both companies filed appeals on the parts of the case they lost, setting the stage for the second round of the clash.
Apple is now finding out that Epic has managed to gain supporters and not quite a few of them. Now solidly in Epic’s corner are 35 states of the US, coming under a coalition. Other notable friends of Apple include Microsoft and the Electronic Frontier Foundation, EFF.
Other Epic supporters include Match Group, which filed the complaint that led to Apple paying 5 million euros per week in fine in the Netherlands, Basecamp, Public Citizens, The Committee to Support the Antitrust Laws, The American Antitrust Institute, another coalition of 14 professors from law, economics, and business backgrounds, yet another alliance of 38 professors from similar backgrounds, etc.
The federal government also jumped into the fray but without supporting either party.
All these parties filed amicus briefs supporting Epic, seeking to force Apple to accept a smaller cut of the transactions going through the App Store. The game maker accuses Apple of wielding monopoly powers over its iOS apps.
In its own submission to the court, Epic argues that the ruling from the lower court would upend established principles of antitrust law and endanger antitrust policy.
In their brief, the state coalition said, “Apple’s conduct has harmed and is harming mobile app developers and millions of citizens. Meanwhile, Apple continues to monopolize app-distribution and in-app payment solutions for iPhones, stifle competition, and amass supracompetitive profits within the almost trillion-dollar-a-year smartphone industry. Apple must account for its conduct under a complete rule of reason analysis.”
Microsoft, a key ally of Epic during the trial, had this to say, “A broad ruling for Apple could leave little room for a limiting principle to prevent Apple from leveraging its control of iOS to foreclose competition in countless adjacent markets. Google, the only other mobile operating system provider, could be empowered to do the same. The stakes are high for Microsoft and other businesses that depend on antitrust laws to protect competition on the merits.”
Meanwhile, the EFF said in opposition to Apple, “A holistic review of the district court’s factual findings will show that Apple does have market power in app distribution, and that its proffered justifications for its restrictive App Store policies do not outweigh the anti-competitive effects of those policies. Accordingly, this Court should find Apple’s policies to be illegal under the Sherman Act. This result will leave Apple free to continue innovating for the benefit of its users, while allowing innovation to flourish outside of Apple’s walls as well.”
The American Antitrust Institute argued that Apple qualified as a monopoly. “First, despite factual findings that directly evidence iPhone purchasers are locked-in by both information costs that prevent accurate lifecycle pricing and switching costs that weigh against switching from iOS to Android to access 4 alternative app-distribution services and in-app payment processors, the district court held there could be no relevant aftermarkets in Apple app-distribution and in-app payment processing. Had the district court properly understood the economic and legal significance of its factual findings in the context of Apple’s alleged anti-competitive conduct and its effects, it could not have arrived at this result.”