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Epic Games and Apple target consoles and fenced gardens on the day of the test

At the center of the case is Fortnite, the hugely popular video game made by Epic, which was kicked out of Apple’s App Store last summer for violating its digital payment rules by creating its own system. Apple (AAPL) receives a 30% discount on many in-app purchases on iOS devices and does not allow alternative payment systems. The removal of Fortnite from the App Store led Epic to sue Apple.

On the first day, Epic and its first witness, CEO Tim Sweeney, tried to find that Apple’s App Store and its refusal to allow other app stores on its platform were anti-competitive. The company claims that Apple̵

7;s strict control over its iOS ecosystem – called “fenced garden” – is a monopoly and calls on the iPhone maker to allow alternative app stores and potential apps for its devices outside of its own and what it approves of.

“Epic is only looking for changes in Apple’s future behavior, not financial damage,” Sweeney said in a statement.

Apple claims that allowing applications on its devices that are not subject to its restrictions would jeopardize the security and privacy of its ecosystem – features it has highlighted as points of sale. He also claims to be competing in a huge video game market, of which he is only a small part, so he has no monopoly and cannot abuse such a position.

Much of the work during the day focused on the two companies trying to determine how they defined their business. Sweeney described Fortnite as a “metaverse” and a “social experience” – a virtual world of movies, TV shows and concerts beyond just gameplay.

Market definition is key to any potential antitrust case. It is not illegal to have a monopoly under US law; it is only illegal to try to maintain a monopoly at the expense of competition. Apple seeks to establish that its operating system, iOS, competes with several other platforms and thus does not violate antitrust laws.

Epic says Apple uses iOS to lock users and developers in a restrictive environment, where it then charges them hefty fees for additional transactions. An epic Attorney Catherine Forest at one point likened Apple to a car dealership that charges customers every time they refuel their cars.

Apple has dismissed allegations of anti-competitive behavior, focusing on the gaming industry, arguing that Fortnite is available on several other major platforms, including PCs, Google’s Android operating system and even Epic’s own online gaming store, as well as popular consoles. for video games such as Sony’s PlayStation, Microsoft Xbox and Nintendo Switch. Users of all of these platforms can play Fortnite against each other and largely make in-app purchases on one platform to use on another, Apple said.

“Epic wants government intervention to take away the choices consumers currently have,” said Karen Dunn, an Apple attorney, in her opening statement.

Tim Cook and other Apple executives will testify against Epic in the Fortnite trial

Another Apple lawyer, Richard Doren, pointed out during his cross-examination of Sweeney that Epic pays a similar fee of 30% on console platforms, although these platforms also do not allow external applications or alternative payment methods. Sweeney claims that the consoles, which lose money from hardware sales and are offset by software, have a different business model from Apple’s winning app store.

Several other big names are expected to testify in the coming days, including Apple CEO Tim Cook and representatives of Facebook (FB) and Microsoft (MSFT).

The judge’s decision – and, of course, the appeals that will almost certainly follow – could have huge consequences not only for Apple and its iOS ecosystem, but potentially for other app stores and the overall app economy, which has grown to hundreds billions of dollars and maintains millions of jobs. This is a case that can either change the way many in-app purchases work, or strengthen power technology platforms to set the rules for an increasingly digital world.

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