![]() “Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. “Over 98% of Apple’s in-app purchase revenue came from games in 2018 to 2019.” Almost all in-app purchases happen in games.By contrast, over 80% of all consumer accounts generate virtually no revenue, as 80% of all apps on the App Store are free.” These gaming-app consumers are primarily making in-app purchases which is the focus of Epic Games’ claims. This 70% of revenue is generated by less than 10% of all App Store consumers. “Generally speaking, on a revenue basis, gaming apps account for approximately 70% of all App Store revenues. Games account for 70% of all App Store revenues.The mobile gaming market itself is a $100 billion industry.” “Ultimately, after evaluating the trial evidence, the Court finds that the relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store. Apple’s not a monopoly, as Epic claimed, because the space is not just mobile games on iOS, but it also doesn’t compete in the overall total video gaming industry, as Apple claimed. Neither Apple nor Epic defined the App Store market space accurately.This article was first published by Stanford School of Law. Indeed, both Apple and Google have taken steps to reduce those fees for small app developers. The world would probably be a better place if Epic won this case, because it would open up both the type of apps people can use on their iPhones and because it would start some real price competition, likely driving the 30 percent fee down substantially. But a win for Epic in this case would open the door to other challenges based on Apple’s control of the App Store.Īnd what would a win for Epic mean for the tech industry and innovation? So far much of that attention has focused on Facebook, Google, and Amazon. are taking a closer look at Apple.Īntitrust agencies around the world have been focusing attention on the large tech platforms. What are the implications of the case if Epic wins? I understand that the European Union charged Apple with violating antitrust laws over its app rules and fees and that state and federal regulators in the U.S. I think Apple has more to lose here, because it has a very lucrative business model at stake.Īnd how about Epic Games? Is the Apple model unique?Įpic has a lot of money at stake too, not only here but in a similar case against Google and potentially with Steam and the console stores, which have similar pricing policies. If it can’t, it will have to show that Apple’s payment policy is on balance anticompetitive, and Apple will be able to offer procompetitive justifications for its policies.ĭoes Apple have much to worry about with this case? If you own an iPhone you can only buy apps through the Apple App Store. And people aren’t going to switch phone ecosystems based on the availability of a single app.īeyond that, Epic needs to win the argument that app purchases and app payments are two separate markets rather than part of the same transaction. If Epic can win that and the App Store monopoly argument, it has a strong case. While courts are reluctant to define single-brand markets, it seems appropriate to do so here. First, it needs to show Apple has market power. That means persuading the court the relevant market is for people already in the Apple ecosystem. But I also think they should win that argument. What does Epic Games need to prove to win the case Apple has brought? In response, Apple banned Fortnite from the iPhone. Epic announced that it would process in-game purchases for its blockbuster game Fortnite outside the app store, avoiding the 30% surcharge. Here, Stanford Law Professor Mark Lemley, a technology law expert, discusses the case and its wider implications.Īpple exercises tight control over what apps people can load on their phones. It has blocked or limited apps that compete with it, and it charges a 30 percent fee-not just 30 percent of the purchase price, but 30 percent of all the revenue the app generates, including from in-game purchases. After months of buildup in the media, the trial began last week. ![]() Late in 2020, Epic Games, creator of the popular gaming platform, Fortnite, sued Apple in federal court, charging that Apple is using the power of its App Store to stifle competition - unfairly forcing app makers to use its payment system and pay its fees. Stanford King Center on Global Development.Stanford Environmental and Energy Policy Analysis Center (SEEPAC).Stanford Center on China's Economy and Institutions (SCCEI).California Policy Research Initiative (CAPRI).
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