That Fate of Apple’s Lucrative App Store was placed in the hands of a California federal judge on Monday after lawyers for the technology giant and its opponent, the “Fortnite” developer “Epic Games”, in their strongly observed antitrust proceedings.
About three-week court case is it about Epic Games ‘ claim that Apple is the App Store operates as an illegal monopoly and forces developers to distribute their app exclusively through the App Store and use only Apple’s payment processing services, which require you to pay a 30% commission to Apple.
It’s about billions and the future the app stores
Epic Games asks Judge Yvonne Gonzalez Rogers, a preliminary injunctionin which Apple is prompted, change its business modelto allow app developers to transfer their apps to iPhones through third-party app stores. According to Apple, such a change would endangering the security of mobile devices. CEO Tim Cook testified last week that such a move “is an experiment I don’t want to do.”
Apple does not divide the revenue for the App Store in its balance sheet, but bundles the market with its service business such as Apple Music +, Apple TV + and iCloud. Nevertheless, in 2020, the segment amounted to $ 53.7 billion or about 20% of Apple’s total revenue. In-app purchases for gaming apps provided the the App Store’s dominant source of revenue.
The dispute began when” Fortnite, ” with about 350 million registered players, was booted from Apple and Google’s app stores in August and banned after Epic Games bypassed the platforms by offering direct in-game purchases at a 20% discount.
The courts are very careful in cartel cases
“The courts are very cautious in cartel cases. I don’t think they want to destroy a company in any way. I think the judge will be careful to see the arguments from both sides […] before deciding in favor of the defendant or in favor of the plaintiff. So I would imagine that the judge will make a fairly narrow decision. “- Shubha Ghosh, Professor at Syracuse University College of Law
While the App Store from Apple the commission at larger developers still at 30 %, after Epic Games filed a lawsuit, commissions for companies with annual sales of less than $ 1 million were reduced to 15%. Separate requirements apply to subscription servicesDevelopers pay 30 % for the first year of a subscription and 15 % for each additional year. Free apps remain free and Apple takes no commission from developers for downloads.
“Apple’s business model was developed long before anyone claimed it was a monopolyApple’s lawyer argued, saying that the model protects users more effectively from malware and other security and privacy breaches than Android – based devices.
The tech giant’s lawyers also positioned Apple’s less malware-driven ecosystem as Market alternative to the mobile operating system of Android. An option that would supposedly be nullified and reduce competition for mobile devices if the software were opened to external providers.
“The iOS environment would be turned into an equivalent or maybe even bad annotation of Android and that eliminates consumer choice” – Apple’s lawyer Gonzalez Rogers
Epic Games responded to the argument by pointing out that Apple had taken into account requests from the Chinese government to remove App Store content.
While Wedbush analyst Dan Ives predicted that Apple would win its court battle with Epic Games, he pointed out that the technology giant was subject to antitrust scrutiny in both the European Union and the United States. In October, House Democrats released a report on Big Tech, noting that the App Store allowed Apple to”make above-average profits.”
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