Epic v. Apple resumes in 10 minutes.
Epic is trying to overturn portions of the September 2021 ruling that sided largely with Apple, while Apple wants to avoid having to comply with an order allowing app makers to communicate more directly w/ customers.
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"Apple will let consumers buy goods off the web. But as the district court explained... Apple has anti-steering rules about even telling consumers they have a cheaper alternative."
Epic's lawyer, Tom Goldstein, is now arguing the case re: switching costs + definition of market.
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"There's nothing going on when Apple competes against Android that causes them to behave pro=-competitive with regard to the app store and in-app payments," Epic's lawyer says. "People stick with their phones, and that's our point."
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One of the judges points out that almost 90% of Fortnite players don't play on mobile. "You make the point your honor that with respect to some apps like Fortnite that some ppl will use another platform. But you can't just make this a case about Fortnite," Epic's lawyer says.
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"No matter what market is involved, I haven't been able to conceive of a theory of the case where Apple is immune from antitrust scrutiny," Epic's Goldstein says.
This is mostly in the realm of very nitty-gritty legal analysis, and which analytical process should come first.
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"Sell the iPhone, tell your customers to use your app store and your in-app payment and that's a walled garden for them and you're perfectly fine," Epic says. "It has never been okay under antitrust laws to eliminate... your horizontal competitors."
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"The only thing kept out of Apple's walled garden are competitors. That's the only thing on the other side of it," Epic argues. Judges seem to find this appealing and bring up Microsoft antitrust case in the '90s about bundling.
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Judges ask about Epic's Project Liberty, the plan to break Apple's rules and launch its lawsuits against Apple and Google.
Epic lawyer says the district court didn't much like it and its ruling shows that.
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US government lawyer Nick Levin is arguing on behalf of Epic. For context: Epic in January received support from 35 state attorneys general that argued Apple is "harming mobile-app developers" with its App Store terms and licensing agreements.
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Apple lawyer Mark Perry is finally arguing its case in defense of the ruling and also in defense of its position that it shouldn't even have to allow developers the chance to communicate alternative payment options that exist outside the App Store.
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The judges are arguing the definition of market again, but want Appel's side of this. Apple does not want the market to be gaming or iOS app payments, in which it can be argued it's foreclosing rivals and harming competition through its policies and restrictions.
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"The market is transactions," Apple lawyer argues. In that sense, Apple's security and privacy justifications for its walled garden seem more palatable.
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"This is not a class action. All other developers have settled with Apple except... well, about 1%," Apple's lawyer says, arguing Epic targeted Apple and Google's app stores using a specific reading of antitrust law that Apple claims doesn't hold up.
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From the day the App Store was created in 2008... Apple made several decisions. One of them after allowing developers to come on was all apps had to go through the App Store. That's the primary restraint being challenged here," Apple's lawyer says.
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"The difference between Mac and iOS is human review," Apple's lawyer says in response to why iOS has more robust protections compared to macOS.
"Both safe, but [iOS] is safer," Apple says.
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"Mobile digital game transactions. That doesn't include Mac... and it doesn't include physical transactions. We have to look at the area of competition within the affected markets," Apple says. Perry cites Android and all its malware, pornography, and adult content issues.
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"For iOS... Apple made the decision to make this the safest, most secure, most private computing device," Apple lawyer says. "It beats Mac, it beats PC, it beats Android devices... Nobody does it better than Apple."
He mention that Tim Sweeney himself uses an iPhone.
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Apple's lawyer is bringing up all the threats iOS would face if it opened the platform to competing app stores. He uses the word "pornsters," a term I don't think I've ever heard before.
"All the competing things Epic wants Android already offers," Apple says.
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Now we're onto the meaningful stuff here: whether Apple's anti-steering policies are justified. Apple is fighting having to comply and let developers include links and buttons in the app that would take them to the web for alternative purchasing.
This is what Spotify wants.
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"It would be a breach in the wall, an opening that bad actors would exploit and it's not well thought out," Apple says regarding letting developers simply add a button or a link to the web.
Apple arguing this could lead to porn, malware or other security and privacy breaches.
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Spotify has hated this rule for years and has supported Epic through the group. The recent tussle on this was about audiobooks and the ability to purchase them on the web and play them on an iOS device.
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"You cannot block horizontal competition between stores and IAP providers and use as your excuse that now I'm going to offer a product that is differentiated by its lack of competition."
Epic lawyer Goldstein is back arguing a rebuttal. "You don't get to squash competition."
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"The one thing that really troubles is the failure of proof," one of the judges says. Another says Judge Gonzalez Rogers, who wrote the district court opinion and presided over the original trial, was inconsistent in her findings.
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"Apple has been completely immune to price competition," Epic lawyer says. "The most important thing I think is temper and reverse the district court's view that it's okay for Apple to eliminate competition to differentiate its product in the market of app stores and payments."
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"Attach whatever label you want and how high the wall...Apple forbids us from offering an alternative app store and from anyone from using our app store."
Epic's lawyer ends his rebuttal by saying Epic is a "would-be competitor," and the judges adjourn the court. That's it.
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It's going to be many months to hear what the judges conclude about this and whether Epic is able to turn any of the 2021 ruling in its favor, or whether Apple's anti-steering policies can remain intact.
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