Last May, Epic Games planned to circumvent Apple and Google’s App Store rules and ultimately sue them in cases that could transform the entire app economy and have a profound impact on antitrust investigations around the world.
Epic’s chief operating officer, Daniel Vogel, emailed other executives expressing concerns: Epic must convince Apple and Google to give in to its demands for loose rules, he wrote, “Without making us look like the bad guys . “
Apple and Google, Vogel warned, “will treat this as an existential threat.” In preparation, Epic created a public relations and marketing plan to win the public over for its campaign against the tech giants.
Apple picked up the plan on Tuesday in a federal courtroom in Oakland, California. This is the second day of what is expected to be a three-week trial following claims by Epic that Apple is relying on control of its app store to unfairly squeeze money from other companies.
Northern California District Judge Yvonne Gonzales Rogers, who will rule the case, asked Epic CEO Tim Sweeney a series of targeted questions about the potential consequences. She asked if he understood the economics of other types of apps, including groceries, maps, GPS, weather, dating, and instant messaging.
“So you have no idea how what you’re asking would affect any of the developers who are into these other categories of apps. Is that right?” asked the judge.
“Personally not,” said Mr Sweeney on his second day on the witness stand.
Apple’s lawyers argued that Epic attacked the app store fees to prop up a slowing business. The gross revenue of Fortnite, Epic’s flagship video game, has shrunk for the last three quarters of 2019 compared to 2018. This comes from a presentation by Epic to the board of directors about the plan to fight Apple. The presentation was released in court on Tuesday, along with the executive’s emails.
When asked by Apple’s lawyers, Mr Sweeney said that Epic’s own game store was not expected to make a profit until at least 2024.
Epic’s attorneys said the lawsuit is not just about Epic and Fortnite, but also about fairness to all apps that need to use Apple’s App Store in order to reach consumers.
“Our claim in this case is that it is about all apps,” said Katherine Forrest, attorney at Cravath, Swaine & Moore.
Epic doesn’t ask for a withdrawal if it wins the trial. We are asking for relief in the form of changes to the App Store rules. Epic asked Apple to allow app developers to use other methods to collect payments and open their own app stores on their apps.
Apple countered that these requirements would create a world of new problems, including lowering the security of iPhones.
On Tuesday afternoon Benjamin Simon, founder of Yoga Buddhi, which makes the Down Dog Yoga app, said about his company’s problems with Apple’s guidelines. Mr Simon said he would have to charge more for subscriptions on the App Store to offset the 30 percent fee Apple charged him and that Apple’s rules prevented him from promoting a cheaper price on his app that was available on the internet is.
According to Simon, Apple warned app developers not to speak about his guidelines in guidelines for approving their apps. “‘If you run to the press and throw us in the trash, it never helps,'” he said. “That was in the guidelines.”