Apple on Monday filed expert testimony in Epic Games' antitrust lawsuit, which goes to trial on Monday. The series of documents, first spotted by MacRumors, offers insight into how the various academics hired by Apple argue against Epic's claims the iPhone maker has a monopoly in iOS app distribution and payment processing, which is at the core of its complaint stemming from the removal of Fortnite from the App Store last summer.
One key insight includes testimony from economist Francine Lafontaine, a professor at University of Michigan's School of Business, laying out how Safari acts as an alternative payment method for Fortnite's in-game V-bucks currency, in theory undermining the notion that Apple maintains strict control over the in-game economies of iOS gaming apps:
Even the rare consumer who has access to only an iOS device has a readily available game transaction alternative to the App Store--the Safari browser. For example, any Fortnite player can use Safari (or Chrome) to purchase Fortnite's in-game currency, 'V-Bucks,' a transaction that generates no commission for Apple.
In another piece of testimony, a survey conducted by Dominique Hanssens, a marketing professor at UCLA, said an overwhelming majority of participants use devices other than those made by Apple to "access digital gaming content":
Results of my first survey show that 92 percent of respondents who downloaded apps from the App Store had regularly used at least one other type of device (i.e., devices other than iPhones and iPads) with which they could access digital gaming content, in the last 12 months. Further, 99 percent of respondents in the first survey had regularly used or could have regularly used at least one other type of device (i.e., devices other than iPhones and iPads) with which they could access digital gaming content, in the last 12 months.
But perhaps the most consequential bit of expert testimony comes from economist Lorin Hitt, a professor at the University of Pennsylvania, who argues that Apple's share of the "digital game transaction market" is far from dominant:
My market share calculations support the conclusion that Apple does not have market or monopoly power in a properly defined market. Apple's share of the digital game transaction market lies between 23.3% and 37.5%. In light of my conservative approach, these market share estimates, especially at the high end, are likely to overstate Apple's true market share and are, in any event, inconsistent with Apple having substantial market power. The entry of new game transaction platforms is also inconsistent with Apple having market power.
Apple submitted hundreds of pages of testimony — Hitt's submission alone is 91 pages long — and many of these arguments will be more succinctly argued in court by Apple's lawyers and supplied by its witnesses who testify live. To that end, both Apple and Epic have submitted witness lists on Monday. From Apple we'll see CEO Tim Cook, App Store VP Matt Fischer, Senior VP of Internet Software and Service Eddy Cue, Senior VP of Software Engineering Craig Federighi, among others. And from Epic, we'll see CEO Tim Sweeney and Epic Game Store chief Steve Allison, among others.
