SAN RAMON, Calif. —was alternately portrayed as a price-gouging monopoly and a hub of world-changing innovation during the preamble to a trial that may reshape the technological landscape. The contrasting portraits were drawn on Monday as lawyers for Apple and its foe, , outlined their cases in an Oakland, California, federal court before U.S. District Judge Yvonne Gonzalez Rogers.
Who will decide the case? The trial, expected to last most of this, revolves around the 15% to 30% commission that Apple charges for subscriptions and purchases from apps downloaded from its store — the only one accessible on the iPhone, iPad, and iPod. While Apple depicted its app store as an invaluable service beloved by consumers and developers alike, Epic Games attacked it as a breakthrough idea that has morphed into an instrument of financial exploitation that illegally locks out the competition.
Epic, the maker of the popular Fortnite, laid out evidence drawn mainly from Apple’s internal documents to prove the company has built a digital “walled garden” during the past 13 years as part of a strategy crafted by its late co-founder, Steve Jobs. The formula, Epic contends, is designed to make it as difficult as possible for and services.
“The most prevalent flower in theis the Venus flytrap,” said Epic lawyer Katherine Forrest. Later, Forrest highlighted expert testimony that will be submitted during the trial that estimated Apple reaped profit margins of 75% to 78% during 2018 and 2019, even though Jobs publicly said the company didn’t expect to make large sums of money from the when it opened in 2008.
Theis now an integral piece of a services division that generated nearly $17 billion in revenue during the first three months of this year alone.
Apple brushed off Epic’s arguments as a case brimming with unfounded allegations made by a company that wants to get rid of thecommission to increase its profits while freeloading off an iPhone ecosystem that has cost more than $100 billion to build.
Karen Dunn, Apple’s attorney, pointed to Epic’s internal documents outlining a “Project Liberty” strategy that paved the way for Fortnite to breach its app store contract last summer purposefully and set up a showdown over the fees.
“Rather than investing in innovation, Epic invested in lawyers, PR, and policy consultants to get all of the benefits Apple provides without paying,” Dunn said.
Reflecting on the high stakes riding on the case,— Jobs’ hand-picked successor — will testify during the trial. Sweeney took the stand after the opening statements. Still, because of pandemic restrictions, Cook isn’t expected to appear until that only allows a handful of mask-wearing people inside the courtroom.
While the trial will involve moments of high intrigue that could divulge closely guarded secrets, the nuts and bolts of the case will likely hinge on more mundane matters such as market definitions.
Epic contends the iPhone has become so ingrained in society that the device and its peripheral services, such as the, have become a market by themselves. As part of that argument, Epic contends that up its walled garden to alternative options, such as allowing other app stores and payment options besides its own.
“The garden could have a door,” Epic lawyer Forrest insisted. “It was artificially closed.”
a broader market definition encompassing the consoles, computers, and other devices people use to play video games. The company also points to the roughly 2 billion other smartphones that run on Google’s software, which allows alternative ways to download apps.
The differentthat Google manages apps on Android is one example that Apple believes proves that consumers have other choices. Still, many prefer keeping their within a carefully controlled walled garden.
Epic is “asking us to remove our competitive advantage,” Apple lawyer Dunn said. “Epic wants us to be Android, but we don’t want to be.”
Epic also is suing Google in a separate case accusing that company of illegally gouging apps through itsdevices.