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Epic Games v. Apple
The Epic Games v. Apple case is coming to a close!
Closing arguments were held on May 24th.
This is a big case at the intersection of platform capitalism, platform economy, competition and antitrust law.
In this case, we are going to see how well the current antitrust laws hold up against platform owners who have monopolistic tendencies.
Please review this 101 video on the platform business model and the Platforms section of Introduction to Platform Cooperativism Mini-course to get an overview of platform governance.
Here is a summary of the case so far and what spurred it on.
You can find quotes from the article below.
Apple v. Epic antitrust trial closing arguments — Judge grills both sides on competition
“In antitrust trials, the definition of the relevant market is critical because it is used to measure whether a company has monopoly power or not. Since Apple has a small percentage of the overall game market (versus Android, console, and PC games), it cannot be said to have monopoly power in games. But if the relevant market is defined as iOS games, then the situation is different as developers are at Apple’s mercy and it is theoretically not so easy for either developers or users to switch to other platforms.”
“During the closing session, the judge began with a focus on the foremarket, or the competition for smartphones, and the aftermarket, the competition for in-app purchases. Both sides said the market was two-sided, where users have some choice over choosing phones and developers have a choice over the stores they will use. Apple argues there is plenty of competition among devices.”
“Last Friday, while questioning Cook, the judge noted that it seems that Apple is putting the burden of paying for the costs of the store and other investments on the backs of the game developers in a disproportionate way.”
“One reason for Apple’s answer is that Epic Games showed that when it comes to Fortnite, most of its $631 million in revenue came from iOS, while only $47 million came from Android for a similar number of downloads, around 80 million. That represents a monopoly market share in Epic’s view. The judge indicated she was happy with the relevant market being mobile gaming.”
“The attorneys also discussed Apple’s “anti-steering” policies where it said developers can’t advertise a lower price for in-app purchases off the device, like on a website, as Epic advertised with Fortnite before it got booted off the App Store. The U.S. Supreme Court ruled in a case between the State of Ohio and American Express that the company did not violate antitrust law due to a failure to show harm to both sides of a two-sided market, meaning consumers on one side and other merchants on the other.”
“And even if Apple wins the trial against Epic, its woes may not be over. Epic helped round up other app makers who were not happy with Apple in the Coalition for App Fairness. They brought up that Apple faces regulatory scrutiny from the U.S. Senate and the European Commission, as well as regulators in Australia.”
“Meghan DiMuzio, the executive director of CAF, and Public Knowledge’s John Bergmayer wrote in an op-ed in Wired that Apple’s App Store is anticompetitive.”
“‘The App Store’s draconian demands prevent app creators from making changes that would help consumers, or from making helpful apps in the first place,” they wrote. “Apple and Google representatives recently found themselves in front of a Senate antitrust hearing about their app store practices. Apple, in particular, came under fire because it has turned on the developers that made the platform so valuable, and consumers are paying the price. For example, the dating app company Match testified that App Store fees are its single greatest expense. Spotify shared how Apple’s fees forced them to raise prices on consumers as Apple launched a competing streaming service, Apple Music. And Tile argued that Apple has used its platform to disadvantage Tile’s products and pave the way for Apple’s competing AirTags.’”
Who do you think will win, Apple or Epic?
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Author: Charles Adjovu, LDCRC
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