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Apple countersues Epic, seeks punitive damages

216 points by psim1 6y ago

arijun 6y ago
Can we please stop using paywalled sources? Here's one that's not paywalled for me, if someone else has an issue with it I will try to find another decent source that's not paywalled. https://www.washingtonpost.com/technology/2020/09/08/epic-apple-countersuit/ https://www.washingtonpost.com/technology/2020/09/08/epic-ap... Alternatively, https://www.cnbc.com/2020/09/08/apple-seeks-damages-from-epic-for-breach-of-contract.html https://www.cnbc.com/2020/09/08/apple-seeks-damages-from-epi...
- digismack 6y ago
  WaPo is paywalled as well.
  - gpm 6y ago
    It is? That link isn't paywalled for me either.
  - jayd16 6y ago
    You can read wapo in incognito mode but not the wsj.
- deleted 6y ago
  [deleted]
jrockway 6y ago
Apple writes in their court filing: “Epic sought to enjoy all of the benefits of Apple’s iOS platform and related services while its ‘hotfix’ lined Epic’s pockets at Apple’s expense.” It seems that Apple has forgotten that each iPhone user already paid Apple hundreds (if not thousands) of dollars for the iPhone itself. It is reasonable to charge developers for development tools, but if that's what you want to do, just charge them for development tools. Meanwhile, I bought an iPhone so that I can run the software that I like. If it costs money to develop a platform, it doesn't seem that strange to just charge that upfront when someone buys an iPhone.
- anm89 6y ago
  While in principle I agree with you, if Epic signed an agreement that they owed Apple a percent based on initial terms, then that is out the window.
  - kevingadd 6y ago
    Their whole argument is that the agreement shouldn't be enforceable, which is why they sued first. Naturally, that means they signed the agreement.
    - toomuchtodo 6y ago
      Sounds like, at least temporarily, the court believes the agreement to be enforceable. >In a ruling late last month, Judge Yvonne Gonzalez Rogers largely rejected similar arguments Epic made in seeking a restraining order against Apple regarding Fortnite development on iOS. There was no "irreparable harm" to Epic, Rogers wrote, because "the current predicament appears of [Epic's] own making." > "Your client created this situation," Rogers told lawyers for Epic in an August hearing. "Your client does not come to this action with clean hands... in my view, you cannot have irreparable harm when you create the harm yourself." > "The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they’ve followed for the past decade until they created this situation," Apple said in a statement earlier this month." Epic has refused. Instead they "repeatedly submit Fortnite updates designed to violate the guidelines of the App Store." EDIT: @gpm The status quo you refer to is Epic abiding by the agreement they argue is unenforceable. I have to be mindful about my reply quantity, HN throttles me otherwise, hence the edit. https://arstechnica.com/gaming/2020/08/judge-issues-restraining-order-protecting-unreal-engine-development-on-ios/ https://arstechnica.com/gaming/2020/08/judge-issues-restrain...
      - gpm 6y ago
        Irreparable harm here means no harm that would be caused by not granting a temporary restraining order that could not be fixed by granting a preliminarily injunction later, or cured in a final ruling. It does not mean there is no harm (edit: Or that the agreement is enforceable). The idea is just that the judge is generally going to maintain the status quo during the TRO phase (this policy exists because there has been such little time for legal argument at the point that a TRO is requested). I don't see that any of these quotes are at all responsive to the person you are responding to. > EDIT: @gpm The status quo is Epic abiding by the agreement they argue unenforcable. Heh, just so you know you can reply to new comments by clicking on the timestamp and then clicking reply. Anyways, I think I must be missing your point? The person you replied to appeared to be arguing about what the final ruling should be not about whether or not a TRO should be granted (which is where the status quo arguments come in).
anm89 6y ago
It's as if Apple is on a mission to destroy the credibility and respect they had.
- adsjhdashkj 6y ago
  I felt like every poor quality controlled release they've had on OSX for the last 10 years has been trying to do that. I feel lost. Wanting to have a simple OS that lets me develop with unix tools but also "just works". The expense i pay for Apple products no longer follows this, for me.
  - rriepe 6y ago
    Solus has been this for me
    - neau 6y ago
      Elementary OS for me.
  - mhh__ 6y ago
    I agree. Apple are pretty much the only company in the world with the money, engineering knowledge, and clout to do a privacy first open ecosystem. On an Apple product you are free only to what Apple says is Kosher, why? Their customers will buy anything apple does, why not just go for it and be more open?
    - jhasse 6y ago
      money
    - valuearb 6y ago
      Because customers love the walled garden. An open version of iPhone would be a disaster for Apple and its developers.
  - rimliu 6y ago
    What stops you from using other OSes with much better quality control?
theflyingelvis 6y ago
“There is nothing anticompetitive about charging a commission for others to use one’s service,” Apple said in the filing. What about forcing someone or some company to use a service (apple's payment systems)?
- strictnein 6y ago
  Such a weird argument too, as if there was a different service Epic could use to reach > 50% of the US mobile market.
  - supernova87a 6y ago
    But what is the market? That's a really important question. If the market is video games in general, Apple is but a tiny sliver of control of that market. If the market is iOS devices, yes of course Apple controls 100% of that. Where does the line get drawn? How many outlets does Epic have to sell what it develops? I think that's for the FTC/SEC to determine.
  - kbenson 6y ago
    If Epic was able to install their own app as a store (what they actually want), they would have at least a few tens of millions of users to start with (there's 116 million iOS Fortnite players). Epic's in the fairly unique position of having a "killer app" that a large portion of the iOS user base would want to install to get the ball rolling on a competing store. Given their rates a much better than Apple's, I imagine a lot of game studios would want to distribute through them, and they could offer cheaper prices and still make more profit, so people would be incentivized to install and use the competing store. You know, actual competition.
    - pjmlp 6y ago
      If is such a killer app, Epic is free to create their own phone OS, it would sell like hot pancakes. You know, actual innovation.
      - 6y ago
liability 6y ago
In my experience bullies cry the most when they get hit back. Apple throwing a temper tantrum when somebody fights back fits that pattern.
- deleted 6y ago
  [deleted]
- m3kw9 6y ago
  In my view Epic is the full grown capable adult wanting to live in his parents basement for free.
  - liability 6y ago
    In this case the basement is Apple's app store and developers who want to sell apps to users are being told to put the lotion on their skin, or else they get the hose (forbidden from selling apps to half the US population.)
  - kllrnohj 6y ago
    Except no, because Epic wants to move out entirely. They don't want to use Apple's house (read: payments & app store) at all. But Apple has everyone chained up in the basement.
    - nmfisher 6y ago
      > Except no, because Epic wants to move out entirely. They don't want to use Apple's house (read: payments & app store) at all. Epic may want you to think that, but it's just not true. My reasoning? They already tried it on Android, and it failed miserably. They moved out the house entirely, taking their listing off the Play Store and allowing side-loading via their website. I'm assuming they also handled payments themselves, too. A year or so, they came crawling back to Google, presumably due to a massive drop in users. It's pretty clear that side-loading is not a commercially effective means of distribution, and publishers need the App/Play Stores to get to users.
GiorgioG 6y ago
Someone is asleep at the wheel here.
gpm 6y ago
Brief: https://www.courtlistener.com/recap/gov.uscourts.cand.364265/gov.uscourts.cand.364265.66.0_1.pdf https://www.courtlistener.com/recap/gov.uscourts.cand.364265...
- pier25 6y ago
  > Left unchecked, Epic’s conduct threatens the very existence of the iOS ecosystem and its tremendous value to consumers.
  - projektfu 6y ago
    By that they mean if developers force Apple’s hand to pull the apps that consumers want, those consumers might choose another device next time?
    - pier25 6y ago
      How would an Epic iOS app store make consumers not buy an iPhone?
      - projektfu 6y ago
        Let’s say Amazon joined in and started selling Kindle and Audible books without using Apple’s 30% digital cut. Apple would have to pull the Amazon app, possibly the Kindle app. Actually, they’d have to do that if Amazon simply said, Apple won’t let this be sold here on reasonable terms, buy from the website. Amazon would lose some, but Apple would also be crippling iOS. Then Spotify joins in, and Tinder, and Duolingo. All of a sudden, Apple’s platform looks pretty lame.
        pier25 6y ago
        So what you're saying is that Apple wants to set up an example to maintain the status quo?
        6y ago
samatman 6y ago
I look forward to Epic's next set of suits against Sony and Microsoft, who offer basically identical terms for inclusion on the app platforms for Playstation and Xbox, respectively.
- bhouston 6y ago
  Yeah, I saw this counter argument before, and I wonder the same thing, but does intellectual consistency matter much in the court of law?
  - parasubvert 6y ago
    It does if you’re about to declare things that have existed for decades with no problem as suddenly Anticompetitive or illegal.
    - kevingadd 6y ago
      Things literally do go from fine to anti-competitive or illegal over time, because context matters and both laws and circumstances change. In one case, the US fought a whole war over something that was previously legal for decades!
      - parasubvert 6y ago
        This is true, but do people really think it’s the end of history for personal computing and that iOS and Android are the endgame such that they should be regulated like energy utilities? The lack of entrepreneurial imagination is astounding. VR and AR are coming, Facebook and Valve are poised to be the next kings of tech. The current era of Apple and Google has an obvious time limit.
        threeseed 6y ago
        Given how many companies Apple has acquired over the last few years pretty sure they are much further ahead in the AR/VR space than Facebook/Valve. They just have a tendency to keep things under wraps until the big reveal.
supernova87a 6y ago
Well, it certainly seems clear from a facts point of view at least, that Epic was engineering the plan to test Apple. They prepared a release that contained the ability to bypass the payment mechanism. Then they did that, and told Apple that was what they were doing. And then launched a big marketing campaign to rally support for it. At least in facts, this wasn't a sudden action by Apple to crush an unsuspecting little player.
- drivingmenuts 6y ago
  Epic’s big mistake was assuming that enough consumers care. Certainly Fortnite is popular, but it’s not popular with a large enough percentage of the entire iOS market to support that kind of action.
  - gpm 6y ago
    This was never going to be won through public opinion, Epic's pretty clear goal from the start was to win this in court. I can't imagine how big a backlash there would have to be for Apple to give up on it's 30% cut voluntarily, and I don't imagine that Epic thought there was any chance of this happening.
  - nmfisher 6y ago
    Luckily, commercial litigation isn't held in the court of public opinion.
loktarogar 6y ago
> it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store. Half true. EPIC doesn't really get any value from the App Store except data delivery, which they're more than willing to do themselves. Fortnite is popular enough that the app discovery part of the store is meaningless.
- rektide 6y ago
  Apple on the other hand gets plenty of value from Epic. For example, 10 years ago, when Epic made the Citadel demo for Apple to show their smartphones could run games. Ground breaking R&D work, gratis for Apple, & legitimizing their devices. https://www.theverge.com/21405805/epic-citadel-2010-anniversary-games-apple-app-store-mobile-smartphone-gaming-platform https://www.theverge.com/21405805/epic-citadel-2010-annivers... We'll see how much more bad blood Apple can make with developers before people start noticing & caring about the software they can't get on their i-devices.
  - kevingadd 6y ago
    If Unity and Unreal Engine disappeared from iOS you'd probably lose at least 50% of the games on that platform, if not more. Likely almost all of the top revenue-generating titles. People use middleware like UE and Unity to compensate for how difficult it is to ship games on Apple's platforms (along with others) instead of building for Apple's SDK. The citadel demo is the tip of the iceberg.
    - mcphage 6y ago
      > to compensate for how difficult it is to ship games on Apple's platforms (along with others) instead of building for Apple's SDK. Apple's SDK doesn't contain a game engine.
      - soundandlight 6y ago
        yes, it does https://developer.apple.com/scenekit/ https://developer.apple.com/scenekit/
Traster 6y ago
The thing that really annoys me about this entire argument is that the principal of the thing isn't really controversial. Apple provides a tonne of services (SDKs, marketplace, payment processing) that other people also provide and also charge for. It's not that controversial - in fact, Epic's Unreal Engine has the exact same revenue share terms as Apple. The only thing that's really controversial here is that 30% is quite a high share, and Apple has to pull out all the stops to protect that 30% becuase of how high a share that is. I think it's a very hard push to claim Apple is a monopoly. It's just a damn good platform that's able to claim a disporportionate share of the revenue because it's so damn good. The whole moralistic histrionics from Hey, Epic, and Apple are total rubbish though.
- inopinatus 6y ago
  Sorry to flatly contradict you, but the size of Apple’s cut is not at all controversial. It has never been a crime to be expensive. The legal controversy is that Apple prohibit apps from advertising, linking to, or even mentioning that external account management/payment/service sign-up options are available. This forces vendors to become complicit in misleading the consumer about their options, an anti-competitive position that distorts a market. Some journalists may choose to focus on the 30% out of sheer crassness. Don’t be misled by sub-par reporting.
  - Traster 6y ago
    Do you think that I can put "Cheaper on www.mysite.com" in my amazon description? Why would it be controversial to prohibit someone from advertising a competing service on your platform?
    - inopinatus 6y ago
      You’re mistaking the platform for the product. I bought an item through Amazon recently and it did come with a bunch of materials inviting me to visit the manufacturer’s website. I bought an app through the App Store and it is prohibited from inviting me to visit the vendor’s website. In contrast, I bought a MMORPG through the PlayStation store and the first thing it did was direct me to the maker's account sign-up.
seanalltogether 6y ago
If apple is countersuing for lost revenue due to fortnites in app payment system, does this mean apple will need justify the value of their 30% cut, and in turn potentially have a judge declare its too much?
- gpm 6y ago
  No? I mean, Epic will be able to argue that it was illegal, they were able to argue that anyways. The exact value for the cut isn't really a legal issue though, if the cut is legal in the first place then the existing contract will almost certainly hold and it will be 30%.
- microtherion 6y ago
  Why would they need to justify it? It does not really seem to be in dispute that the contract both parties entered into specified a 30% cut, and courts are generally not in the business of revising mutually agreed upon terms of a contract.
acomjean 6y ago
I think one big thing is that Fortnite is no longer available on iOS devices. I didn't think it was a big deal, how many people game on iOS? But the little people in my life are missing the corporate synergy of Marvel and Fortnite for the new season. This makes just having iOS devices in your world less palatable and teaches a valuable lesson on walled gardens. Saddly Fortnite is one of the rare games that is cross platform online playable. It took their weight to make that happen. Wish Epic would work to make linux a more viable native gaming platform now (steam does a lot of work with Proton, but I think native might be better...).
m3kw9 6y ago
Couldn’t have said it better myself: “Epic’s lawsuit is nothing more than a basic disagreement over money,” Apple said in its filing Tuesday. “Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store.”
- justapassenger 6y ago
  Alternative view: “Although Apple portrays itself as a modern corporate United Nations, in reality it is a multi-billion dollar enterprise that simply wants to get a cut for the tremendous value it partners derive to their platform.”
- swiley 6y ago
  I said a few weeks ago this is exactly the way apple would want the conversation to go. That apple is asking for 30% is uninteresting (even reasonable!) That they’ve sold the world a PC many people can’t leave which they can control (to the point of deleting apps and data!) is what’s absolutely insane about the situation.
bad_user 6y ago
Epic is a company that reserves the right to sell your data for marketing purposes, says so in their privacy policy. Remember that on Android they first tried to workaround Google Play's limitations by distributing Fortnite outside the store. They caved later. So this isn't about having no ability to distribute Fortnite, rather it's about them wanting easy distribution without paying the tax that everyone else is paying. I dislike Apple's walled garden approach very much, but on the other hand it's their app store and this is still capitalism. If you don't like it, as a consumer, buy another brand, and as a developer, avoid developing for Apple. Develop for Android, develop for the open web. Voting with your wallet still works, the problem being, of course, that Apple fans are happy with the current arrangement. And seriously, I can't side with a company willing to sell people's data for marketing purposes. Sorry.
- nmfisher 6y ago
  This is less about Fortnite and more about a mobile Epic Games Store. That being said, caving to Google and putting Fortnite back on the Play Store dramatically undermines their case, because it shows that how important the Play/App Stores are for distribution & eyeballs. Apple and Google can both claim they invested heavily in that ecosystem for the benefit of publishers and users alike. I'm the first to criticize Apple for its attitude towards users and developers, but I'm struggling to see how it falls afoul of the law. It's their walled garden - don't like it? Don't play in it.
rbarnes01 6y ago
Why are people demonizing Apple over this? Sure, they have made questionable decisions in the past but Epic clearly went into this in bad faith and absolutely deserves a slap in the face with a countersuit.
bww 6y ago
This is a very bad look on Apple. Regardless of the enforceability of their agreements, the sense of entitlement that underlies Apple’s position is shocking. The claim that Epic has “lined [its] pockets at Apple’s expense” implies that Apple deserves to sit in the middle of every transaction that happens on their devices and take a margin. This is the world’s most valuable company we’re talking about here; assertions like this demonstrate an unbelievable lack of self-awareness. Let’s also not forget that Apple already extracts huge amounts of money from developers even if they don’t make a cent on transaction margins. It’s not possible to develop for iOS without a Mac, and therefore even the smallest developer making free apps has paid Apple for at least: one computer, one of each device class they develop for, and the cost of their developer account subscription. Large companies like Epic buy thousands of computers and test devices from Apple. The idea that anything is happening “at Apple’s expense” is preposterous. Maybe next Toyota will decide that they deserve a percentage of Uber’s revenue because Toyota's cars help facilitate Uber’s business?
- cjoelrun 6y ago
  Isn't a better analogy that car dealerships deserve revenue for selling Toyota's cars? Running an app store and providing a safe platform for users isn't free right?
  - KindOne 6y ago
    Car dealership analogy is flawed. In some states its illegal for the car manufacturer to directly sale to the consumer, they have to go through car dealerships. https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes
    - Google234 6y ago
      A grocery store would be a fine alternative.
    - zaksoup 6y ago
      Honestly, I think this makes it an even better analogy! Apple is exactly like the dealership groups suing Tesla to prevent them from selling directly to consumers.
YetAnotherNick 6y ago
The perfect outcome according to me will be that you could be required to pay apple tax if you use app store to distribute the app, but the user should have a way to install any app outside the store and apple has to provide user a way to let them install it. This will have far reaching consequence for many devices like consoles, home assistants etc. I believe we are simply giving control of the devices we own for not much reason at all, only reason is that the manufactures want to earn after they sell the device.
- mcphage 6y ago
  > The perfect outcome according to me will be that you could be required to pay apple tax if you use app store to distribute the app, but the user should have a way to install any app outside the store and apple has to provide user a way to let them install it. Isn't that the current situation on Android, and Epic still sued them?
  - jjcon 6y ago
    You can also sideload on iOS (without jailbreak), I do it all the time but for some reason no one is talking about that either.
    - YetAnotherNick 6y ago
      But you can need to do it every 7 days and it requires connecting to PC, right?
      - jjcon 6y ago
        Nah you can use AltStore (or others) and it will auto renew your certs. I’ve had an alternate YouTube app and an emulator sideloaded for months and haven’t even thought twice about it.
  - ThatPlayer 6y ago
    Epic sued Google for different things, like making it harder on Android to use a 3rd party app store (you cannot give apps permission to install other apps or update apps silently including itself) and exclusivity deals with manufacturers.
Razengan 6y ago
Does anybody else remember how well they used to get along? Here's Epic demoing Fortnite at WWDC15: https://www.youtube.com/watch?v=ChIuImrOsaY https://www.youtube.com/watch?v=ChIuImrOsaY Ever since the Citadel and Zen Garden demos, I remember Epic getting a prime spot or mention at almost every WWDC, where they used their tech to showcase Apple's and vice versa, like the power of modern iPads and Metal. What do you think must have gone down behind closed doors for their relations to have soured to this point? Unless of course it's all a calculated stunt that ultimately benefits both companies.
neonate 6y ago
https://archive.is/v93T1 https://archive.is/v93T1
brentis 6y ago
play.fortnite.com cannot come soon enough. React and Flutter are doing 120fps right? At least 60fps I know.
cf_ 6y ago
I really wish there was a third party - the customer - actually represented in this trial. Apple and Epic arguing over what is best for the customer, while clearly they are having their own interests in mind, screams for the actual customers to be represented. The whole argument about them promoting an app „for free“ is a bit ridiculous. They clearly knew the amount of commission they were going to earn from pushing that app through their App Store - so please admit that you clearly didn‘t do this out of the good of your hearts. The same goes for the portrayal of „look how much money they made through us“ - yes - and look at how much money they made you along the way. I mean if Epic made 600 million, than you made about 260 million - from the very same people that paid you for the hardware. I think if the App Store is such a tremendous value, why don‘t you ask users to pay for access to that App Store directly. Let‘s see how valuable everybody thinks the App Store is when they actually have to pay an access fee directly to Apple.
- jjcon 6y ago
  > Let‘s see how valuable everybody thinks the App Store is when they actually have to pay an access fee directly to Apple They do, it’s called buying an iphone
  - hnra 6y ago
    I bought an iPhone despite the App Store, so I don't think that logic really holds.
    - AlphaSite 6y ago
      I don’t know if what you’re saying holds generally. I don’t know if people buy it for the AppStore, but I strongly suspect that most people don’t buy it despite the App Store.
      - morsch 6y ago
        They might resent the app store more if they knew Apple gets 30%. Which is why nobody is supposed to tell.
jbirer 6y ago
Apple's aim with this is to make an example out of Epic, as if to say: "This is what happens when you don't toe the line, conform and everything will be fine". That being said, this is scary and also shows how comfortable Apple feels in their position. I am hoping that someone as strong as Apple will come with a lawsuit and shake them up a bit so to speak.
baconandeggs 6y ago
Are we gonna start arguing about Planet Fitness having their classes on Peloton bikes next?
theshrike79 6y ago
Just remember, everything that applies here also applies to Xbox, PSN and Nintendo stores. If Apple loses and is forced to allow Tim Sweeney Store on its platform, then Microsoft, Sony and Nintendo must allow the same on their consoles.
swiley 6y ago
No company has pushed me more strongly towards the ideologies RMS (who I still think is a bit crazy) writes about than Apple. At this point I’m convinced there needs to be a law against closed devices and closed software.
- bzb5 6y ago
  “I like my newfound ideology so much, I think it should be written into law”
  - swiley 6y ago
    His argument is that the law should prevent this kind of abuse. That’s the ideology itself.
    - bzb5 6y ago
      Is that what rms says? That his ideology should not be an option, but mandatory? Honest question.
      - fsflover 6y ago
        https://www.gnu.org/philosophy/free-software-even-more-important.html https://www.gnu.org/philosophy/free-software-even-more-impor...
nodamage 6y ago
Note: I am not a lawyer but I have been doing a deep dive into the legal background behind this case. Ultimately I believe the outcome of this case will depend on two questions: 1. Can Epic establish that iOS app distribution is in fact a valid antitrust market that Apple has monopoly control over? Epic argues that Apple is abusing its "monopoly" over the iOS app distribution market. However, in an antitrust case you cannot simply declare an arbitrarily narrow market where the defendant is the only participant and expect the court to accept it. iOS app distribution is an "aftermarket" of the smartphone market, and as a general rule, US courts do not permit antitrust markets to be based on a single brand's product unless specific exceptions are met. > "In general, a manufacturer's own products do not themselves comprise a relevant product market..... [A] company does not violate the Sherman Act by virtue of the natural monopoly it holds over its own product." Apple Inc. v. Psystar Corp. The circumstances in which the courts have allowed a single brand's product to be treated as a valid antitrust market have usually involved situations where the customer purchased a product not knowing they would be locked into some aftermarket restriction, for example due to a change in contract or company policy. If, on the other hand, customers knew about the restriction ahead of time, could have purchased an alternative product without restrictions, and went ahead and purchased anyway, the market power deriving from that restriction is generally not considered a valid basis for an antitrust claim. Of particular note is that courts routinely reject market definitions based on restrictions stipulated in EULAs that customers voluntarily agreed to when purchasing the original product. For example, in Blizzard Entertainment Inc. v. Ceiling Fan Software LLC, the court rejected the defendant's claim that Blizzard held monopoly power in the "WoW add-on software" aftermarket, because WoW customers explicitly agreed to WoW's EULA stipulating they would only used Blizzard authorized WoW add-ons when they purchased the game. Similarly, in Apple Inc. v. Psystar Corp., the court rejected Psystar's claim that Apple held monopoly power in the "hardware that runs Mac OS" aftermarket because customers "knowingly agreed to the challenged restraint" when they purchaed Mac OS. Interestingly enough, I double checked and surprisingly the iPhone EULA does not appear to have language restricting app installation to the "App Store and other authorized sources only". If it did, I believe Epic would have trouble getting past here. However, even in absence of an explicit contractual restriction, the court permits an analysis of "whether a consumer's selection of a particular brand in the competitive market is the functional equivalent of a contractual commitment". This analysis is explained in Newcal Industries, Inc. v. IKON Office Solution which describes four relevant aspects to consider: a) The existence of two separate but related markets. Epic alleges these are "smartphone OSes" and "app distribution". It's not clear to me whether these two markets need to be economically distinct (more on the meaning of this below), but it could be problematic for Epic if they do. b) The allegations of illegal monopolization relate only to the aftermarket. (This is a given.) c) Whether the source of the company's market power is based on contractual provisions obtained in the initial market or based on the company's relationship with its customers. Epic argues that in the absence of a EULA there is no contractual relationship, while Apple will presumably argue that there is a quasi-contractual agreement in place because they made the app installation policy very clear at the launch of the App Store and it has never changed. d) Whether market imperfections prevent customers from realizing their choice in the initial market will impact their freedom to shop in the aftermarket. In other words, did customers "make a knowing choice to restrict their aftermarket options" when they decided to buy an iPhone instead of a different phone that allowed side-loading? I think Epic is going to have a particularly tough time establishing (c) and (d). If the court concludes that customers purchased iPhones knowing that they would be restricted to installing apps from the App Store, then Apple's "monopoly" over iOS app distribution is based on the customer's knowing consent, and therefore will not be a valid basis for an antitrust claim. We'll see what the court decides. But in any event, even if Epic succeeds in proving that Apple has a monopoly over iOS app distribution, the job is not done. They then need to prove that Apple used that monopoly to illegally restrain competition in another market, which brings us to question 2. 2. Can Epic establish that iOS app payment processing is a separate and distinct product from iOS app distribution? In order to prove Apple illegally tied app distribution and payment processing together, Epic will need to show that the two are actually economically distinct products. > "[T]here must be a coherent economic basis for treating the tying and tied products as distinct. All but the simplest products can be broken down into two or more components that are "tied together" in the final sale. Unless it is to be illegal to sell cars with engines or cameras with lenses, this analysis must be guided by some limiting principle. For products to be treated as distinct, the tied product must, at a minimum, be one that some consumers might wish to purchase separately without also purchasing the tying product. When the tied product has no use other than in conjunction with the tying product, a seller of the tying product can acquire no additional market power by selling the two products together." Jefferson Parish Hospital Dist. No. 2 v. Hyde In Jefferson Parish, the Supreme Court ruled anesthesiological services were not economically distinct from hospital services because anesthesiological services were always sold in conjunction with other hospital services, and therefore tying the two together was not illegal. In Rick-Mik Enterprises, Inc. v. Equilon Enterprises, LLC, credit card processing was considered an essential component of a gas station franchise and therefore was not economically distinct from the sale of the franchise itself. The legal test for whether two tied products are economically distinct has historically depended on whether consumer demand exists for the tied product separate from the tying product, but it's not clear whether that test is appropriate here. For the case of paid apps, there clearly aren't economically distinct products. If Apple distributes a paid app on behalf of a developer and collects a fee in exchange, the fee is the cost of using Apple's distribution service. Distribution and payment happen simultaneously, they are not separate services, therefore there is no tie between them. Now, what happens if Apple initially distributes the app without a fee and (later) takes a fee when an in-app purchase is made? Does the act of deferring the payment from the download create two economically distinct products when before there was only one? Apple argues that it does not, and similar to Rick-Mik, in-app payment processing is simply a component of its app distribution service. I don't know if this argument will hold up in court but it's certainly very interesting and probably venturing into uncharted territory as far as existing precedent is concerned. But if the court does decide that in-app payment processing services are not economically distinct from app distribution services, then Epic is going to have difficulties with their tying claim. Overall these are very tough questions and as the judge said, it's not a slam dunk for either side. I tend to think Epic is fighting the uphill battle here, as existing US antitrust law seems like it favors the defendant in cases like this. If Epic does win, it's certainly going to open up a lot of similar questions for other companies that sell tightly controlled hardware and software. (Particularly on the console side, but also stuff like smart TVs and even cars.)
mcintyre1994 6y ago
What's the actual theory of the case of how Apple are owed damages here? Obviously they're losing revenue from Fortnite but that would have happened if Epic just decided they don't like the rules and took the app down themselves instead of breaking them. I can't imagine Apple would be entitled to damages then and I can't see how they've lost more money than that. The other obvious thing is legal expenses, but you don't throw them in as damages during the case right? That'd be settled based on the result and depending on the jurisdiction. I guess I can see them getting a few hours of someone's wage for re-reviewing Fortnite after the changes and taking it down? I feel like I'm probably missing something, does anybody know the actual position Apple would argue for damages from here?
- Traster 6y ago
  There is a material difference between costing Apple revenue by doing something they're allowed to do and costing Apple revenue by breaching their agreement. They cost Apple revenue by circumventing the in-app purchase system and Apple will naturally want the lost revenue. My guess is they'll produce figures saying "We made 30% of X revenue from in-app purchases over Y time frame, this dropped to 30% of Z revenue after Epic breached our terms, so they owe us 30% of X-Z + punitive damages because they did this deliberately".
  - invalidusernam3 6y ago
    But surely that position would only apply if Apple hadn't removed the game from the app store? If myself as an indie dev breaches the TOS and my app store account is suspended, surely Apple can't sue me for lost revenue because they opted to suspend my account? Imagine the precedent that would set: Apple could sue you for lost income if you break the store TOS causing your app to be removed. I think Apple would have had much more of an argument for lost revenue if they had kept the game on the store. It would be directly quantifiable, they could say "look, the game made x million and we received $0, we should have received $y".
    - Traster 6y ago
      Oh, I see where you're coming from. No, the way that Epic have been suspended is such that they can't put out any more updates, but people who already have the game installed still have it, the game doesn't get deleted from your phone, so people are still using it and still buying stuff direct from Epic.
ht2020 6y ago
If you want to get information about mobile review in hindi please <a href="https://www.janshanti.buzz/" https://www.janshanti.buzz/" rel="dofollow">Himanshu</a>
AsyncAwait 6y ago
For people saying this is just the iPhone and I can always buy from a different OEM, it's not about my individual choice. Say I am a mobile bank or some other kind of service that needs to reach all my customers on mobile. There are significant populations across the world on iPhone, so to stay competitive as something like a challenger bank, ignoring iOS is simply not an option. If the argument is that Apple provides payment processing, this is not a benefit as it's the only option, i.e. does not win on the merits. As for game consoles, they're not essential. Smartphones are.

216 points by psim1 6y ago

Can we please stop using paywalled sources? Here's one that's not paywalled for me, if someone else has an issue with it I will try to find another decent source that's not paywalled. https://www.washingtonpost.com/technology/2020/09/08/epic-apple-countersuit/ https://www.washingtonpost.com/technology/2020/09/08/epic-ap... Alternatively, https://www.cnbc.com/2020/09/08/apple-seeks-damages-from-epic-for-breach-of-contract.html https://www.cnbc.com/2020/09/08/apple-seeks-damages-from-epi...

digismack 6y ago
WaPo is paywalled as well.
- gpm 6y ago
  It is? That link isn't paywalled for me either.
- jayd16 6y ago
  You can read wapo in incognito mode but not the wsj.
deleted 6y ago
[deleted]

jrockway 6y ago

Apple writes in their court filing: “Epic sought to enjoy all of the benefits of Apple’s iOS platform and related services while its ‘hotfix’ lined Epic’s pockets at Apple’s expense.” It seems that Apple has forgotten that each iPhone user already paid Apple hundreds (if not thousands) of dollars for the iPhone itself. It is reasonable to charge developers for development tools, but if that's what you want to do, just charge them for development tools. Meanwhile, I bought an iPhone so that I can run the software that I like. If it costs money to develop a platform, it doesn't seem that strange to just charge that upfront when someone buys an iPhone.

anm89 6y ago
While in principle I agree with you, if Epic signed an agreement that they owed Apple a percent based on initial terms, then that is out the window.
- kevingadd 6y ago
  Their whole argument is that the agreement shouldn't be enforceable, which is why they sued first. Naturally, that means they signed the agreement.
  - toomuchtodo 6y ago
    Sounds like, at least temporarily, the court believes the agreement to be enforceable. >In a ruling late last month, Judge Yvonne Gonzalez Rogers largely rejected similar arguments Epic made in seeking a restraining order against Apple regarding Fortnite development on iOS. There was no "irreparable harm" to Epic, Rogers wrote, because "the current predicament appears of [Epic's] own making." > "Your client created this situation," Rogers told lawyers for Epic in an August hearing. "Your client does not come to this action with clean hands... in my view, you cannot have irreparable harm when you create the harm yourself." > "The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they’ve followed for the past decade until they created this situation," Apple said in a statement earlier this month." Epic has refused. Instead they "repeatedly submit Fortnite updates designed to violate the guidelines of the App Store." EDIT: @gpm The status quo you refer to is Epic abiding by the agreement they argue is unenforceable. I have to be mindful about my reply quantity, HN throttles me otherwise, hence the edit. https://arstechnica.com/gaming/2020/08/judge-issues-restraining-order-protecting-unreal-engine-development-on-ios/ https://arstechnica.com/gaming/2020/08/judge-issues-restrain...
    - gpm 6y ago
      Irreparable harm here means no harm that would be caused by not granting a temporary restraining order that could not be fixed by granting a preliminarily injunction later, or cured in a final ruling. It does not mean there is no harm (edit: Or that the agreement is enforceable). The idea is just that the judge is generally going to maintain the status quo during the TRO phase (this policy exists because there has been such little time for legal argument at the point that a TRO is requested). I don't see that any of these quotes are at all responsive to the person you are responding to. > EDIT: @gpm The status quo is Epic abiding by the agreement they argue unenforcable. Heh, just so you know you can reply to new comments by clicking on the timestamp and then clicking reply. Anyways, I think I must be missing your point? The person you replied to appeared to be arguing about what the final ruling should be not about whether or not a TRO should be granted (which is where the status quo arguments come in).

anm89 6y ago

It's as if Apple is on a mission to destroy the credibility and respect they had.

adsjhdashkj 6y ago
I felt like every poor quality controlled release they've had on OSX for the last 10 years has been trying to do that. I feel lost. Wanting to have a simple OS that lets me develop with unix tools but also "just works". The expense i pay for Apple products no longer follows this, for me.
- rriepe 6y ago
  Solus has been this for me
  - neau 6y ago
    Elementary OS for me.
- mhh__ 6y ago
  I agree. Apple are pretty much the only company in the world with the money, engineering knowledge, and clout to do a privacy first open ecosystem. On an Apple product you are free only to what Apple says is Kosher, why? Their customers will buy anything apple does, why not just go for it and be more open?
  - jhasse 6y ago
    money
  - valuearb 6y ago
    Because customers love the walled garden. An open version of iPhone would be a disaster for Apple and its developers.
- rimliu 6y ago
  What stops you from using other OSes with much better quality control?

theflyingelvis 6y ago

“There is nothing anticompetitive about charging a commission for others to use one’s service,” Apple said in the filing. What about forcing someone or some company to use a service (apple's payment systems)?

strictnein 6y ago
Such a weird argument too, as if there was a different service Epic could use to reach > 50% of the US mobile market.
- supernova87a 6y ago
  But what is the market? That's a really important question. If the market is video games in general, Apple is but a tiny sliver of control of that market. If the market is iOS devices, yes of course Apple controls 100% of that. Where does the line get drawn? How many outlets does Epic have to sell what it develops? I think that's for the FTC/SEC to determine.
- kbenson 6y ago
  If Epic was able to install their own app as a store (what they actually want), they would have at least a few tens of millions of users to start with (there's 116 million iOS Fortnite players). Epic's in the fairly unique position of having a "killer app" that a large portion of the iOS user base would want to install to get the ball rolling on a competing store. Given their rates a much better than Apple's, I imagine a lot of game studios would want to distribute through them, and they could offer cheaper prices and still make more profit, so people would be incentivized to install and use the competing store. You know, actual competition.
  - pjmlp 6y ago
    If is such a killer app, Epic is free to create their own phone OS, it would sell like hot pancakes. You know, actual innovation.
    - 6y ago

liability 6y ago

In my experience bullies cry the most when they get hit back. Apple throwing a temper tantrum when somebody fights back fits that pattern.

deleted 6y ago
[deleted]
m3kw9 6y ago
In my view Epic is the full grown capable adult wanting to live in his parents basement for free.
- liability 6y ago
  In this case the basement is Apple's app store and developers who want to sell apps to users are being told to put the lotion on their skin, or else they get the hose (forbidden from selling apps to half the US population.)
- kllrnohj 6y ago
  Except no, because Epic wants to move out entirely. They don't want to use Apple's house (read: payments & app store) at all. But Apple has everyone chained up in the basement.
  - nmfisher 6y ago
    > Except no, because Epic wants to move out entirely. They don't want to use Apple's house (read: payments & app store) at all. Epic may want you to think that, but it's just not true. My reasoning? They already tried it on Android, and it failed miserably. They moved out the house entirely, taking their listing off the Play Store and allowing side-loading via their website. I'm assuming they also handled payments themselves, too. A year or so, they came crawling back to Google, presumably due to a massive drop in users. It's pretty clear that side-loading is not a commercially effective means of distribution, and publishers need the App/Play Stores to get to users.

GiorgioG 6y ago

Someone is asleep at the wheel here.

gpm 6y ago

Brief: https://www.courtlistener.com/recap/gov.uscourts.cand.364265/gov.uscourts.cand.364265.66.0_1.pdf https://www.courtlistener.com/recap/gov.uscourts.cand.364265...

pier25 6y ago
> Left unchecked, Epic’s conduct threatens the very existence of the iOS ecosystem and its tremendous value to consumers.
- projektfu 6y ago
  By that they mean if developers force Apple’s hand to pull the apps that consumers want, those consumers might choose another device next time?
  - pier25 6y ago
    How would an Epic iOS app store make consumers not buy an iPhone?
    - projektfu 6y ago
      Let’s say Amazon joined in and started selling Kindle and Audible books without using Apple’s 30% digital cut. Apple would have to pull the Amazon app, possibly the Kindle app. Actually, they’d have to do that if Amazon simply said, Apple won’t let this be sold here on reasonable terms, buy from the website. Amazon would lose some, but Apple would also be crippling iOS. Then Spotify joins in, and Tinder, and Duolingo. All of a sudden, Apple’s platform looks pretty lame.
      - pier25 6y ago
        So what you're saying is that Apple wants to set up an example to maintain the status quo?
        6y ago

samatman 6y ago

I look forward to Epic's next set of suits against Sony and Microsoft, who offer basically identical terms for inclusion on the app platforms for Playstation and Xbox, respectively.

bhouston 6y ago
Yeah, I saw this counter argument before, and I wonder the same thing, but does intellectual consistency matter much in the court of law?
- parasubvert 6y ago
  It does if you’re about to declare things that have existed for decades with no problem as suddenly Anticompetitive or illegal.
  - kevingadd 6y ago
    Things literally do go from fine to anti-competitive or illegal over time, because context matters and both laws and circumstances change. In one case, the US fought a whole war over something that was previously legal for decades!
    - parasubvert 6y ago
      This is true, but do people really think it’s the end of history for personal computing and that iOS and Android are the endgame such that they should be regulated like energy utilities? The lack of entrepreneurial imagination is astounding. VR and AR are coming, Facebook and Valve are poised to be the next kings of tech. The current era of Apple and Google has an obvious time limit.
      - threeseed 6y ago
        Given how many companies Apple has acquired over the last few years pretty sure they are much further ahead in the AR/VR space than Facebook/Valve. They just have a tendency to keep things under wraps until the big reveal.

supernova87a 6y ago

Well, it certainly seems clear from a facts point of view at least, that Epic was engineering the plan to test Apple. They prepared a release that contained the ability to bypass the payment mechanism. Then they did that, and told Apple that was what they were doing. And then launched a big marketing campaign to rally support for it. At least in facts, this wasn't a sudden action by Apple to crush an unsuspecting little player.

drivingmenuts 6y ago
Epic’s big mistake was assuming that enough consumers care. Certainly Fortnite is popular, but it’s not popular with a large enough percentage of the entire iOS market to support that kind of action.
- gpm 6y ago
  This was never going to be won through public opinion, Epic's pretty clear goal from the start was to win this in court. I can't imagine how big a backlash there would have to be for Apple to give up on it's 30% cut voluntarily, and I don't imagine that Epic thought there was any chance of this happening.
- nmfisher 6y ago
  Luckily, commercial litigation isn't held in the court of public opinion.

loktarogar 6y ago

> it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store. Half true. EPIC doesn't really get any value from the App Store except data delivery, which they're more than willing to do themselves. Fortnite is popular enough that the app discovery part of the store is meaningless.

rektide 6y ago
Apple on the other hand gets plenty of value from Epic. For example, 10 years ago, when Epic made the Citadel demo for Apple to show their smartphones could run games. Ground breaking R&D work, gratis for Apple, & legitimizing their devices. https://www.theverge.com/21405805/epic-citadel-2010-anniversary-games-apple-app-store-mobile-smartphone-gaming-platform https://www.theverge.com/21405805/epic-citadel-2010-annivers... We'll see how much more bad blood Apple can make with developers before people start noticing & caring about the software they can't get on their i-devices.
- kevingadd 6y ago
  If Unity and Unreal Engine disappeared from iOS you'd probably lose at least 50% of the games on that platform, if not more. Likely almost all of the top revenue-generating titles. People use middleware like UE and Unity to compensate for how difficult it is to ship games on Apple's platforms (along with others) instead of building for Apple's SDK. The citadel demo is the tip of the iceberg.
  - mcphage 6y ago
    > to compensate for how difficult it is to ship games on Apple's platforms (along with others) instead of building for Apple's SDK. Apple's SDK doesn't contain a game engine.
    - soundandlight 6y ago
      yes, it does https://developer.apple.com/scenekit/ https://developer.apple.com/scenekit/

Traster 6y ago

The thing that really annoys me about this entire argument is that the principal of the thing isn't really controversial. Apple provides a tonne of services (SDKs, marketplace, payment processing) that other people also provide and also charge for. It's not that controversial - in fact, Epic's Unreal Engine has the exact same revenue share terms as Apple. The only thing that's really controversial here is that 30% is quite a high share, and Apple has to pull out all the stops to protect that 30% becuase of how high a share that is. I think it's a very hard push to claim Apple is a monopoly. It's just a damn good platform that's able to claim a disporportionate share of the revenue because it's so damn good. The whole moralistic histrionics from Hey, Epic, and Apple are total rubbish though.

inopinatus 6y ago
Sorry to flatly contradict you, but the size of Apple’s cut is not at all controversial. It has never been a crime to be expensive. The legal controversy is that Apple prohibit apps from advertising, linking to, or even mentioning that external account management/payment/service sign-up options are available. This forces vendors to become complicit in misleading the consumer about their options, an anti-competitive position that distorts a market. Some journalists may choose to focus on the 30% out of sheer crassness. Don’t be misled by sub-par reporting.
- Traster 6y ago
  Do you think that I can put "Cheaper on www.mysite.com" in my amazon description? Why would it be controversial to prohibit someone from advertising a competing service on your platform?
  - inopinatus 6y ago
    You’re mistaking the platform for the product. I bought an item through Amazon recently and it did come with a bunch of materials inviting me to visit the manufacturer’s website. I bought an app through the App Store and it is prohibited from inviting me to visit the vendor’s website. In contrast, I bought a MMORPG through the PlayStation store and the first thing it did was direct me to the maker's account sign-up.

seanalltogether 6y ago

If apple is countersuing for lost revenue due to fortnites in app payment system, does this mean apple will need justify the value of their 30% cut, and in turn potentially have a judge declare its too much?

gpm 6y ago
No? I mean, Epic will be able to argue that it was illegal, they were able to argue that anyways. The exact value for the cut isn't really a legal issue though, if the cut is legal in the first place then the existing contract will almost certainly hold and it will be 30%.
microtherion 6y ago
Why would they need to justify it? It does not really seem to be in dispute that the contract both parties entered into specified a 30% cut, and courts are generally not in the business of revising mutually agreed upon terms of a contract.

acomjean 6y ago

I think one big thing is that Fortnite is no longer available on iOS devices. I didn't think it was a big deal, how many people game on iOS? But the little people in my life are missing the corporate synergy of Marvel and Fortnite for the new season. This makes just having iOS devices in your world less palatable and teaches a valuable lesson on walled gardens. Saddly Fortnite is one of the rare games that is cross platform online playable. It took their weight to make that happen. Wish Epic would work to make linux a more viable native gaming platform now (steam does a lot of work with Proton, but I think native might be better...).

m3kw9 6y ago

Couldn’t have said it better myself: “Epic’s lawsuit is nothing more than a basic disagreement over money,” Apple said in its filing Tuesday. “Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store.”

justapassenger 6y ago
Alternative view: “Although Apple portrays itself as a modern corporate United Nations, in reality it is a multi-billion dollar enterprise that simply wants to get a cut for the tremendous value it partners derive to their platform.”
swiley 6y ago
I said a few weeks ago this is exactly the way apple would want the conversation to go. That apple is asking for 30% is uninteresting (even reasonable!) That they’ve sold the world a PC many people can’t leave which they can control (to the point of deleting apps and data!) is what’s absolutely insane about the situation.

bad_user 6y ago

Epic is a company that reserves the right to sell your data for marketing purposes, says so in their privacy policy. Remember that on Android they first tried to workaround Google Play's limitations by distributing Fortnite outside the store. They caved later. So this isn't about having no ability to distribute Fortnite, rather it's about them wanting easy distribution without paying the tax that everyone else is paying. I dislike Apple's walled garden approach very much, but on the other hand it's their app store and this is still capitalism. If you don't like it, as a consumer, buy another brand, and as a developer, avoid developing for Apple. Develop for Android, develop for the open web. Voting with your wallet still works, the problem being, of course, that Apple fans are happy with the current arrangement. And seriously, I can't side with a company willing to sell people's data for marketing purposes. Sorry.

nmfisher 6y ago
This is less about Fortnite and more about a mobile Epic Games Store. That being said, caving to Google and putting Fortnite back on the Play Store dramatically undermines their case, because it shows that how important the Play/App Stores are for distribution & eyeballs. Apple and Google can both claim they invested heavily in that ecosystem for the benefit of publishers and users alike. I'm the first to criticize Apple for its attitude towards users and developers, but I'm struggling to see how it falls afoul of the law. It's their walled garden - don't like it? Don't play in it.

rbarnes01 6y ago

Why are people demonizing Apple over this? Sure, they have made questionable decisions in the past but Epic clearly went into this in bad faith and absolutely deserves a slap in the face with a countersuit.

bww 6y ago

This is a very bad look on Apple. Regardless of the enforceability of their agreements, the sense of entitlement that underlies Apple’s position is shocking. The claim that Epic has “lined [its] pockets at Apple’s expense” implies that Apple deserves to sit in the middle of every transaction that happens on their devices and take a margin. This is the world’s most valuable company we’re talking about here; assertions like this demonstrate an unbelievable lack of self-awareness. Let’s also not forget that Apple already extracts huge amounts of money from developers even if they don’t make a cent on transaction margins. It’s not possible to develop for iOS without a Mac, and therefore even the smallest developer making free apps has paid Apple for at least: one computer, one of each device class they develop for, and the cost of their developer account subscription. Large companies like Epic buy thousands of computers and test devices from Apple. The idea that anything is happening “at Apple’s expense” is preposterous. Maybe next Toyota will decide that they deserve a percentage of Uber’s revenue because Toyota's cars help facilitate Uber’s business?

cjoelrun 6y ago
Isn't a better analogy that car dealerships deserve revenue for selling Toyota's cars? Running an app store and providing a safe platform for users isn't free right?
- KindOne 6y ago
  Car dealership analogy is flawed. In some states its illegal for the car manufacturer to directly sale to the consumer, they have to go through car dealerships. https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes
  - Google234 6y ago
    A grocery store would be a fine alternative.
  - zaksoup 6y ago
    Honestly, I think this makes it an even better analogy! Apple is exactly like the dealership groups suing Tesla to prevent them from selling directly to consumers.

YetAnotherNick 6y ago

The perfect outcome according to me will be that you could be required to pay apple tax if you use app store to distribute the app, but the user should have a way to install any app outside the store and apple has to provide user a way to let them install it. This will have far reaching consequence for many devices like consoles, home assistants etc. I believe we are simply giving control of the devices we own for not much reason at all, only reason is that the manufactures want to earn after they sell the device.

mcphage 6y ago
> The perfect outcome according to me will be that you could be required to pay apple tax if you use app store to distribute the app, but the user should have a way to install any app outside the store and apple has to provide user a way to let them install it. Isn't that the current situation on Android, and Epic still sued them?
- jjcon 6y ago
  You can also sideload on iOS (without jailbreak), I do it all the time but for some reason no one is talking about that either.
  - YetAnotherNick 6y ago
    But you can need to do it every 7 days and it requires connecting to PC, right?
    - jjcon 6y ago
      Nah you can use AltStore (or others) and it will auto renew your certs. I’ve had an alternate YouTube app and an emulator sideloaded for months and haven’t even thought twice about it.
- ThatPlayer 6y ago
  Epic sued Google for different things, like making it harder on Android to use a 3rd party app store (you cannot give apps permission to install other apps or update apps silently including itself) and exclusivity deals with manufacturers.

Razengan 6y ago

Does anybody else remember how well they used to get along? Here's Epic demoing Fortnite at WWDC15: https://www.youtube.com/watch?v=ChIuImrOsaY https://www.youtube.com/watch?v=ChIuImrOsaY Ever since the Citadel and Zen Garden demos, I remember Epic getting a prime spot or mention at almost every WWDC, where they used their tech to showcase Apple's and vice versa, like the power of modern iPads and Metal. What do you think must have gone down behind closed doors for their relations to have soured to this point? Unless of course it's all a calculated stunt that ultimately benefits both companies.

neonate 6y ago

https://archive.is/v93T1 https://archive.is/v93T1

brentis 6y ago

play.fortnite.com cannot come soon enough. React and Flutter are doing 120fps right? At least 60fps I know.

cf_ 6y ago

I really wish there was a third party - the customer - actually represented in this trial. Apple and Epic arguing over what is best for the customer, while clearly they are having their own interests in mind, screams for the actual customers to be represented. The whole argument about them promoting an app „for free“ is a bit ridiculous. They clearly knew the amount of commission they were going to earn from pushing that app through their App Store - so please admit that you clearly didn‘t do this out of the good of your hearts. The same goes for the portrayal of „look how much money they made through us“ - yes - and look at how much money they made you along the way. I mean if Epic made 600 million, than you made about 260 million - from the very same people that paid you for the hardware. I think if the App Store is such a tremendous value, why don‘t you ask users to pay for access to that App Store directly. Let‘s see how valuable everybody thinks the App Store is when they actually have to pay an access fee directly to Apple.

jjcon 6y ago
> Let‘s see how valuable everybody thinks the App Store is when they actually have to pay an access fee directly to Apple They do, it’s called buying an iphone
- hnra 6y ago
  I bought an iPhone despite the App Store, so I don't think that logic really holds.
  - AlphaSite 6y ago
    I don’t know if what you’re saying holds generally. I don’t know if people buy it for the AppStore, but I strongly suspect that most people don’t buy it despite the App Store.
    - morsch 6y ago
      They might resent the app store more if they knew Apple gets 30%. Which is why nobody is supposed to tell.

jbirer 6y ago

Apple's aim with this is to make an example out of Epic, as if to say: "This is what happens when you don't toe the line, conform and everything will be fine". That being said, this is scary and also shows how comfortable Apple feels in their position. I am hoping that someone as strong as Apple will come with a lawsuit and shake them up a bit so to speak.

baconandeggs 6y ago

Are we gonna start arguing about Planet Fitness having their classes on Peloton bikes next?

theshrike79 6y ago

Just remember, everything that applies here also applies to Xbox, PSN and Nintendo stores. If Apple loses and is forced to allow Tim Sweeney Store on its platform, then Microsoft, Sony and Nintendo must allow the same on their consoles.

swiley 6y ago

No company has pushed me more strongly towards the ideologies RMS (who I still think is a bit crazy) writes about than Apple. At this point I’m convinced there needs to be a law against closed devices and closed software.

bzb5 6y ago
“I like my newfound ideology so much, I think it should be written into law”
- swiley 6y ago
  His argument is that the law should prevent this kind of abuse. That’s the ideology itself.
  - bzb5 6y ago
    Is that what rms says? That his ideology should not be an option, but mandatory? Honest question.
    - fsflover 6y ago
      https://www.gnu.org/philosophy/free-software-even-more-important.html https://www.gnu.org/philosophy/free-software-even-more-impor...

nodamage 6y ago

Note: I am not a lawyer but I have been doing a deep dive into the legal background behind this case. Ultimately I believe the outcome of this case will depend on two questions: 1. Can Epic establish that iOS app distribution is in fact a valid antitrust market that Apple has monopoly control over? Epic argues that Apple is abusing its "monopoly" over the iOS app distribution market. However, in an antitrust case you cannot simply declare an arbitrarily narrow market where the defendant is the only participant and expect the court to accept it. iOS app distribution is an "aftermarket" of the smartphone market, and as a general rule, US courts do not permit antitrust markets to be based on a single brand's product unless specific exceptions are met. > "In general, a manufacturer's own products do not themselves comprise a relevant product market..... [A] company does not violate the Sherman Act by virtue of the natural monopoly it holds over its own product." Apple Inc. v. Psystar Corp. The circumstances in which the courts have allowed a single brand's product to be treated as a valid antitrust market have usually involved situations where the customer purchased a product not knowing they would be locked into some aftermarket restriction, for example due to a change in contract or company policy. If, on the other hand, customers knew about the restriction ahead of time, could have purchased an alternative product without restrictions, and went ahead and purchased anyway, the market power deriving from that restriction is generally not considered a valid basis for an antitrust claim. Of particular note is that courts routinely reject market definitions based on restrictions stipulated in EULAs that customers voluntarily agreed to when purchasing the original product. For example, in Blizzard Entertainment Inc. v. Ceiling Fan Software LLC, the court rejected the defendant's claim that Blizzard held monopoly power in the "WoW add-on software" aftermarket, because WoW customers explicitly agreed to WoW's EULA stipulating they would only used Blizzard authorized WoW add-ons when they purchased the game. Similarly, in Apple Inc. v. Psystar Corp., the court rejected Psystar's claim that Apple held monopoly power in the "hardware that runs Mac OS" aftermarket because customers "knowingly agreed to the challenged restraint" when they purchaed Mac OS. Interestingly enough, I double checked and surprisingly the iPhone EULA does not appear to have language restricting app installation to the "App Store and other authorized sources only". If it did, I believe Epic would have trouble getting past here. However, even in absence of an explicit contractual restriction, the court permits an analysis of "whether a consumer's selection of a particular brand in the competitive market is the functional equivalent of a contractual commitment". This analysis is explained in Newcal Industries, Inc. v. IKON Office Solution which describes four relevant aspects to consider: a) The existence of two separate but related markets. Epic alleges these are "smartphone OSes" and "app distribution". It's not clear to me whether these two markets need to be economically distinct (more on the meaning of this below), but it could be problematic for Epic if they do. b) The allegations of illegal monopolization relate only to the aftermarket. (This is a given.) c) Whether the source of the company's market power is based on contractual provisions obtained in the initial market or based on the company's relationship with its customers. Epic argues that in the absence of a EULA there is no contractual relationship, while Apple will presumably argue that there is a quasi-contractual agreement in place because they made the app installation policy very clear at the launch of the App Store and it has never changed. d) Whether market imperfections prevent customers from realizing their choice in the initial market will impact their freedom to shop in the aftermarket. In other words, did customers "make a knowing choice to restrict their aftermarket options" when they decided to buy an iPhone instead of a different phone that allowed side-loading? I think Epic is going to have a particularly tough time establishing (c) and (d). If the court concludes that customers purchased iPhones knowing that they would be restricted to installing apps from the App Store, then Apple's "monopoly" over iOS app distribution is based on the customer's knowing consent, and therefore will not be a valid basis for an antitrust claim. We'll see what the court decides. But in any event, even if Epic succeeds in proving that Apple has a monopoly over iOS app distribution, the job is not done. They then need to prove that Apple used that monopoly to illegally restrain competition in another market, which brings us to question 2. 2. Can Epic establish that iOS app payment processing is a separate and distinct product from iOS app distribution? In order to prove Apple illegally tied app distribution and payment processing together, Epic will need to show that the two are actually economically distinct products. > "[T]here must be a coherent economic basis for treating the tying and tied products as distinct. All but the simplest products can be broken down into two or more components that are "tied together" in the final sale. Unless it is to be illegal to sell cars with engines or cameras with lenses, this analysis must be guided by some limiting principle. For products to be treated as distinct, the tied product must, at a minimum, be one that some consumers might wish to purchase separately without also purchasing the tying product. When the tied product has no use other than in conjunction with the tying product, a seller of the tying product can acquire no additional market power by selling the two products together." Jefferson Parish Hospital Dist. No. 2 v. Hyde In Jefferson Parish, the Supreme Court ruled anesthesiological services were not economically distinct from hospital services because anesthesiological services were always sold in conjunction with other hospital services, and therefore tying the two together was not illegal. In Rick-Mik Enterprises, Inc. v. Equilon Enterprises, LLC, credit card processing was considered an essential component of a gas station franchise and therefore was not economically distinct from the sale of the franchise itself. The legal test for whether two tied products are economically distinct has historically depended on whether consumer demand exists for the tied product separate from the tying product, but it's not clear whether that test is appropriate here. For the case of paid apps, there clearly aren't economically distinct products. If Apple distributes a paid app on behalf of a developer and collects a fee in exchange, the fee is the cost of using Apple's distribution service. Distribution and payment happen simultaneously, they are not separate services, therefore there is no tie between them. Now, what happens if Apple initially distributes the app without a fee and (later) takes a fee when an in-app purchase is made? Does the act of deferring the payment from the download create two economically distinct products when before there was only one? Apple argues that it does not, and similar to Rick-Mik, in-app payment processing is simply a component of its app distribution service. I don't know if this argument will hold up in court but it's certainly very interesting and probably venturing into uncharted territory as far as existing precedent is concerned. But if the court does decide that in-app payment processing services are not economically distinct from app distribution services, then Epic is going to have difficulties with their tying claim. Overall these are very tough questions and as the judge said, it's not a slam dunk for either side. I tend to think Epic is fighting the uphill battle here, as existing US antitrust law seems like it favors the defendant in cases like this. If Epic does win, it's certainly going to open up a lot of similar questions for other companies that sell tightly controlled hardware and software. (Particularly on the console side, but also stuff like smart TVs and even cars.)

mcintyre1994 6y ago

What's the actual theory of the case of how Apple are owed damages here? Obviously they're losing revenue from Fortnite but that would have happened if Epic just decided they don't like the rules and took the app down themselves instead of breaking them. I can't imagine Apple would be entitled to damages then and I can't see how they've lost more money than that. The other obvious thing is legal expenses, but you don't throw them in as damages during the case right? That'd be settled based on the result and depending on the jurisdiction. I guess I can see them getting a few hours of someone's wage for re-reviewing Fortnite after the changes and taking it down? I feel like I'm probably missing something, does anybody know the actual position Apple would argue for damages from here?

Traster 6y ago
There is a material difference between costing Apple revenue by doing something they're allowed to do and costing Apple revenue by breaching their agreement. They cost Apple revenue by circumventing the in-app purchase system and Apple will naturally want the lost revenue. My guess is they'll produce figures saying "We made 30% of X revenue from in-app purchases over Y time frame, this dropped to 30% of Z revenue after Epic breached our terms, so they owe us 30% of X-Z + punitive damages because they did this deliberately".
- invalidusernam3 6y ago
  But surely that position would only apply if Apple hadn't removed the game from the app store? If myself as an indie dev breaches the TOS and my app store account is suspended, surely Apple can't sue me for lost revenue because they opted to suspend my account? Imagine the precedent that would set: Apple could sue you for lost income if you break the store TOS causing your app to be removed. I think Apple would have had much more of an argument for lost revenue if they had kept the game on the store. It would be directly quantifiable, they could say "look, the game made x million and we received $0, we should have received $y".
  - Traster 6y ago
    Oh, I see where you're coming from. No, the way that Epic have been suspended is such that they can't put out any more updates, but people who already have the game installed still have it, the game doesn't get deleted from your phone, so people are still using it and still buying stuff direct from Epic.

ht2020 6y ago

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AsyncAwait 6y ago

For people saying this is just the iPhone and I can always buy from a different OEM, it's not about my individual choice. Say I am a mobile bank or some other kind of service that needs to reach all my customers on mobile. There are significant populations across the world on iPhone, so to stay competitive as something like a challenger bank, ignoring iOS is simply not an option. If the argument is that Apple provides payment processing, this is not a benefit as it's the only option, i.e. does not win on the merits. As for game consoles, they're not essential. Smartphones are.