Epic Games CEO cites Apple’s ‘full control’ over iPhones on day one of antitrust lawsuit By Reuters


© Reuters. FILE PHOTO: The Fortnite game graphic is displayed on a smartphone in front of the Apple logo in this illustration taken May 2, 2021. REUTERS / Dado Ruvic / Illustration


By Stephen Nellis

OAKLAND, Calif. (Reuters) – The CEO of the creator of “Fortnite” Epic Games said Monday he knew he was breaking Apple Inc’s (NASDAQ 🙂 App Store rules by bringing his own Epic’s integrated payment system. last year, but wanted to highlight Apple’s influence on iPhone users worldwide, who now total 1 billion.

“I wanted the whole world to see that Apple has full control over all software on iOS, and that it can use that control to deny user access to apps,” said Tim Sweeney behind layers of plexiglass. in a federal courthouse in Oakland, California. on the first day of an antitrust lawsuit against Apple.

The three-week trial leads to a lawsuit that Epic brought in U.S. District Court for the Northern District of California last year that focuses on two Apple practices that have become cornerstones of its business: Apple’s requirement that virtually all third-party partner software for the world’s billion iPhones be distributed through its App Store, and the requirement for developers to use the system Apple’s in-app purchase, which charges commissions of up to 30%.

Epic broke Apple’s rules in August by introducing its own integrated payment system into “Fortnite” to bypass Apple’s commissions. In response, Apple launched Epic from its App Store.

Epic sued Apple, alleging the iPhone maker was abusing its power over app developers with app store review rules and payment requirements that hurt competition in the software market. Epic has also launched an aggressive public relations campaign to draw attention to its allegations, just as Apple’s practices have come under scrutiny by lawmakers and regulators in the United States and elsewhere.

In opening arguments, Epic lawyer Katherine Forrest of Cravath, Swaine & Moore laid out the video game company’s argument that Apple has “brick by brick” built its App Store in a “walled garden” intended to extract fees from developers who wish to access Apple. billion iPhone users. Forrest argued that Apple has locked these users into its ecosystem with apps such as iMessage, which allows Apple users to send messages to other devices, but has limited functionality when communicating with them. android users.

“The most common flower in the walled garden is the Venus fly trap,” Forrest argued before judge Yvonne Gonzalez Rogers.

Apple countered Epic’s claims by arguing that the App Store rules have made consumers feel safe and secure by opening their wallets to unknown developers, helping to create a massive market in which all developers have benefited. Apple claims that Epic intentionally severed contracts with Apple because the game maker wanted a free ride on the iPhone maker’s platform.

In opening arguments for Apple, lawyer Karen Dunn de Paul, Weiss noted that Epic is asking the judge to force Apple to allow third-party software to be installed on its phones outside of the App Store, similar to ” sideloading “the Android operating system already allows.

“Epic is asking for government intervention to remove a choice that consumers currently have,” Dunn told the court.

The courtroom was closed to the public, but in the audience as “corporate witnesses” on either side were Epic’s Sweeney and Apple App Store chief Phil Schiller.

During his testimony, Sweeney said that Epic pays commissions to other platform owners such as Sony Group Corp’s PlayStation and Microsoft Corp (NASDAQ :), but explained that these hardware makers use developer fees to subsidize further development of their hardware.

Judge Gonzalez Rogers also asked her first straightforward questions about the trial during Sweeney’s testimony, asking whether Apple’s original 2007 and 2008 iPhones were sophisticated enough to run Epic’s video games. Sweeney said they weren’t.

“So Apple must have done something on the iPhone itself to make it sophisticated enough to read your software?” How is it different from consoles? ” she asked.

Sweeney responded that hardware development was similar, but the two devices had different business models.

Sweeney and Schiller are expected to attend the entire trial, which will also include in-person testimony from Apple CEO Tim Cook and other senior executives from both companies.

Epic is not asking for damages, but is asking the court to make orders that would end many of Apple’s practices.

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