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Epic’s first arguments against Apple suggest a fierce battle for the future of iOS

Superheroes are fighting.
Zoom in / Artist’s concept of what Apple and Epic’s lawyers did to each other in court today.

In conducting the initial arguments in Epic̵

7;s long-awaited lawsuit against Apple, Fortnite studio noted that it was “not suing for damages” or “a special deal.” Instead, the Epic advisor said he was “judging change, not just for himself, but for all developers.”

While “Epic is far from the only unfortunate developer and distributor of Apple,” Epic’s lawyers said it simply turned out to be the only company that could [say] enough for Apple’s monopolistic behavior “by” taking the world’s largest company to court on the matter.

Apple, meanwhile, uses its introductory arguments to characterize Epic’s lawsuit as “just an attack on Apple’s 30 percent commission, which Epic doesn’t want to pay,” and Epic as a company that “decided it no longer wanted to pay for Apple’s innovation. ” “

“Instead of investing in innovation, Epic [is] investing in lawyers and PR … to take advantage of the benefits that Apple provides for free, ”said Apple.

Lock-in and developer bait-and-switch

Much of Epic’s initial argument focused on the idea that iOS users and developers were effectively locked into Apple’s mobile ecosystem, and that Apple knew from the beginning of iPhone history “what it needs to do to lock users.” Epic sent a number of emails from Apple executives designed to demonstrate this argument, including an email from Eddy Cue in 2013 about how to get users “hooked on the ecosystem.”

As Cue wrote to Tim Cook and Phil Schiller of Apple in 2013:

The more people use our stores, the more likely they are to buy additional Apple products and upgrade to the latest versions. Who will go, except for a Samsung phone, if there are already purchased applications, movies, etc. Now they have to spend hundreds more to get to where they are today.

Epic said Apple lured developers with an initial promise that the App Store itself would not be a major profit generator for Apple. In 2008, Steve Jobs said the company did not “intend to make money from the App Store” but instead used the existence of an app market to increase the value of the lucrative iOS hardware itself.

In the beginning, it worked well for everyone, according to Epic. But around 2008, Apple realized that some free iOS games were starting to sell extra levels “for a fee.” Apple Vice President Greg Josviak described the e-mail as “a possible leak in the system” and said “we will have to make sure that our conditions do not allow this.” In 2009, a new requirement was imposed to use the in-app purchasing system (IAP) for such sales, supplemented by a 30% discount from Apple. Until 2011, subscriptions made through apps also came with the same requirements.

Epic argues that this in-app purchase charges are capricious and have nothing to do with security risks, the amount of support Apple offers, or the cost of processing consumer payments. And Epic points out that Apple eventually reduced its required fee to 15 percent for the second year of automatic subscription renewals, although there was no change in costs. “There’s a name for a business that sets prices regardless of cost,” said Epic’s lawyer. Monopolies.

Contrary to Jobs’ expectations, Epic says Apple’s internal documents show that the iOS App Store now makes profit margins of more than 75% with hundreds of millions of dollars in annual revenue. Apple says these figures are misleading and do not take into account the cost of the iOS SDK and API, which are registered in other parts of the company, such as the software division.

In any case, Epic characterizes this huge revenue from app revenue as Apple’s lure and switch. “The most attractive flower in the garden was the Venus fly trap,” said the Epic adviser. The developers “helped add value to iOS, and after committing to the iOS ecosystem … their business depended on Apple.”

Meanwhile, consumers have invested real, sunken costs in the iOS ecosystem and will have significant switching costs, Epic said. Epic cites research that shows that “a developer like Epic can’t leave the iOS platform even when prices go up without losing a profit.”

But Apple cites its own data, which suggests that 12 to 26 percent of iOS users who bought a new phone in recent quarters have switched to a different mobile platform, indicating that there are competitive alternatives even for alleged users. that they are “locked”. “And when iOS use Fortnite decreases after the removal of the iOS App Store, the game on competing gaming platforms increases simultaneously, according to data provided by Apple, offering other alternatives in this case of use.

Security precautions or pretext

Epic claims that Apple could have built the iOS software “fenced garden” with a door, as it did for MacOS, which shares the same core, but still allows the installation of unsigned apps that are not sold by Apple’s official Mac App Store. Forcing iOS apps through the App Store and the review process is not a “technical solution, but a political solution,” Epic said.

But Apple responded that locking the iOS App Store is also a security solution and that “placement [unreviewed] Natural third-party applications on the iPhone can compromise the phone itself. “The mobile device provides a larger and more attractive surface to attack than the desktop operating system,” Apple said, thanks to the mobile device’s additional capabilities and near-permanent power-on status. This requires additional layers of protection to protect consumers, Apple said.

“It’s a rare moment when someone leaves a Mac on a bus or in a movie theater,” Apple’s lawyers said. “Mac doesn’t know where you are or you’re kids.”

Epic said the argument is just a pretext for what constitutes a business solution for exercising complete control over the iOS app market. Epic lawyer cites executives and Apple’s materials that say MacOS is secure, and the lawyer claims that “there is no [security] a MacOS failure that iOS has cured. “

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