The legal battle between Epic Games and Apple has heated up with the Epic Games CEO calling the Apple expert witness’ testimony “baloney.”
Epic Games is the creator of the popular online game Fortnite. In August, Epic set up its own in-game payments system, which effectively circumvented Apple’s App Store payment system. This avoided the 30 percent surcharge that Apple collects on App Store purchases. Apple removed Fortnite from its iOS App Store for violating its rules.
The Legal Battle
Epic filed an antitrust lawsuit against Apple, climbing that Apple’s App Store was an effective monopoly. Specifically, Epic challenged Apple’s restrictions on apps from having other in-app purchasing methods separate from the one offered by Apple’s App Store. Apple defends itself by arguing that its rules are necessary because Apple has chosen to take responsibility for the safety, security, and privacy preservation of its users. Apple argues that consumers are free to select a mobile smartphone platform that takes a different approach from Apple.
Contested Expert Testimony
Apple presented Professor Daniel L. Rubinfeld, Ph.D. as one of its expert witnesses. Rubinfeld testified that Apple’s choice to not allow third-party payment processing was valid. He stated, “Apple’s design choice to not facilitate sideloading, i.e., to create a ‘walled garden,’ was made before the first iPhone was sold and before Apple created the App Store, supporting my view that this design choice is procompetitive. The vertical restraints that Epic challenges are crucially responsible for enabling the growth of the iOS ecosystem and the benefits that flow from it. They are procompetitive, prevent opportunistic behavior and free riding, and foster interbrand competition.”
Rubinfeld claimed that the App Store’s policies and rules are necessary to “keep users safe and secure, to give users the confidence to take advantage of the powers of the iPhone and its apps, and to ensure that the iOS platform itself stays healthy and thrives in the face of increasingly well-funded and sophisticated bad actors who would — whether by design or as collateral damage — cause harm to iPhone users.”
Rubinfeld testified that the Apple’s Developer Program License Agreement “is procompetitive because it enables millions of developers to combine their complementary assets, skills, knowledge, and intellectual property with the revolutionary capabilities of Apple’s iPhone on a platform that protects users and gives them confidence to freely and fully explore and take advantage of those developers’ contributions.”
Rubenfeld also testified that allowing alternative app stores would require Apple to redesign its hardware and software. “The duty upon Apple is more than the usual duty to deal; it would include a duty to redesign its hardware and software — both of which are covered by Apple’s intellectual property — to make the iPhone interoperable with alternative app stores and with apps that would not qualify under Apple’s app-review guidelines for distribution through the App Store.”
Tim Sweeney, the CEO of Epic Games, took to Twitter to blast Rubinfeld’s testimony. He wrote, “That’s baloney! iOS already has a mechanism for users to install apps from the web – the Apple Enterprise Program. Only contractual limitations prevent it from being used for consumer software distribution.”
The trial is scheduled to begin on May 3 in United States District Court for the Northern District of California before Judge Yvonne Gonzalez Rogers.