Apple Epic Trial

Apple and Epic lay it all on the table in final day of Fortnite trial

The antitrust trial is now in the judge's hands after three weeks of courtroom testimony.

Apple and Epic lay it all on the table in final day of Fortnite trial

Epic v. Apple came to a close on Monday after three weeks of testimony. There's no telling when the judge will decide on a verdict.

Photo: David Paul Morris/Bloomberg via Getty Images

Epic v. Apple came to a close on Monday with a series of contentious back-and-forth debates in place of traditional closing arguments.

Judge Yvonne Gonzalez Rogers wanted both companies to make their case for what the relevant market should be — is it mobile gaming, the entire gaming market, or the entirety of the iOS app ecosystem — and what kind of remedy might be appropriate. Should Apple have to open up iOS to alternative app stores, or should it be forced to simply allow alternative payment systems or, even narrower, just the ability to advertise cheaper payment systems outside the App Store?

Apple CEO Tim Cook made clear on Friday the company sees any such outcome as a serious blow to the iPhone, though some are clearly more harmful than others. Yet the judge's tough questioning finally forced an Apple executive to admit some uncomfortable truths about how financially valuable they see the App Store.

  • Cook argued Apple creates "the entire amount of commerce on the store." It also sees its restrictions and 30% cut as a way to both control access to the customer base and, as a result, see a return on its IP and R&D investment.
  • It was the first time we heard anyone from Apple speak so plainly about how it views the App Store as a product, the company's relationship with its developers, and why it feels justified in keeping companies like Epic from launching competing stores of their own.

Monday's courtroom exchanges went even further in distilling the three-week trial down to its essence, helping minimize many of the hard-to-follow tangents and bringing into focus the core arguments we've heard over close to 100 hours of testimony. The first topic was how to define the market, which in turn will determine the scope of the judge's ruling.

  • Apple hoped to establish the market as the entire gaming market, in which the App Store is just one complete digital marketplace among many and in which consumers substitute purchases on one platform for another. In that context, it's clear Apple doesn't have a monopoly.
  • Epic lawyer Gary Bornstein pushed for more. Epic wants the market to be defined as the iOS app distribution market, over which it has argued Apple has an illegal monopoly that results in higher prices and reduced competition. As evidence, Bornstein said Apple feels no pressure to lower its prices, that there's a lack of innovation in the store, and that in the event of a price increase, it's unlikely developers would leave the iOS platform.
  • The judge didn't seem to find either side particularly convincing. Instead, she hinted at a compromise. "How would it affect you if I decided the relevant market was mobile gaming?" Gonzalez Rogers pondered, to which Apple counsel Daniel Swanson said, "That would make me very sad."

The judge often resisted efforts from both sides to get mired in conversations around technical definitions and semantics and instead hinted at a ruling that could appease both sides: forcing Apple to adjust its anti-steering provisions, but potentially leaving the iOS ecosystem largely intact. Those rules, which bar developers from advertising cheaper payment options, were another big focus of Monday's debates.

  • Epic has asked for a ruling addressing the entire app market, meaning it's focused less on the anti-steering rules despite the judge's increasing interest in the topic. Apple lawyer Veronica Moye latched onto that on Monday, saying Epic has done little to prove it's been harmed by those rules and calling anti-steering provisions "nothing unique or unusual" in retail. Bornstein retorted that those rules are in fact one of the guidelines Epic is challenging, but that Epic is indeed asking for far more than that.
  • The argument devolved into extensive debate on both sides over what Apple does and does not allow regarding consumer marketing, exposing in many ways how byzantine the App Store guidelines are. The end result was mostly confusion all around, suggesting any ruling addressing Apple's anti-steering rules could be very narrow and even content-specific to a distinct app category such as cross-platform games (like Fortnite).
  • In one notable exchange, Gonzalez Rogers rejected the notion that anti-steering rules are in place to improve transaction "efficiency," as Moye tried arguing. "[Tim] Cook conceded that it's a method of being compensated for intellectual property," the judge said. It was a strong example of Cook's frank Friday testimony undermining the Apple legal team's more sugar coated justifications behind its iOS restrictions.

The most contentious part of the day came in the closing debate centered on remedies, in effect how the court should rule and what the effects of that might be. Both sides made passionate pleas to the judge. Epic's Bornstein argued that Apple has committed anticompetitive conduct and should be compelled to allow competition, while Apple lawyer Richard Doren painted a grim picture of a future where Apple's control of iOS is loosened even slightly.

  • Bornstein argued in favor of opening iOS to competing app stores, saying Apple could still do app review and keep iPhone owners in its ecosystem by default, but that they'd now have choice. He pointed to the Mac as a viable model for what the iPhone should look like and characterized Apple's strategy as "scaring the court" into protecting the App Store.
  • Apple's Doren argued the opposite, saying consumer choice exists today in the form of iOS versus Android, and that changes to the iOS ecosystem would destroy the iPhone and make it a poor imitation of Android that is less secure and impossible to curate or moderate. Epic, he argued, wants Apple to "drop its gloves and stand in the middle of the arena and take what comes without any meaningful defense."

Judge Gonzalez Rogers ended the session after a little more than three hours of courtroom debate, saying she anticipates a ruling to take a considerable amount of time but declining to give a firm date. Her earlier deadline of Aug. 13, the anniversary of the Fortnite hot fix that kicked off the whole legal saga in the first place, was merely a joke. Let's hope it's sooner.

What is clear is that with thousands of pages of court documents, roughly 4,500 pages of court testimony, and the fate of some of the largest, most lucrative technology products in her hands, Gonzalez Rogers has her work cut out for her. Whatever she decides will almost certainly result in an appeal, but the fate of both Fortnite and the future of the iOS platform now rests in her hands,

Google’s latest plans for Chromecast are all about free TV

The company is in talks to add dozens of free linear channels to its newest streaming dongle.

Google launched its new Google TV service a year ago. Now, the company wants to add free TV channels to it.

Photo: Google

Google is looking to make its Chromecast streaming device more appealing to cord cutters. The company has plans to add free TV channels to Google TV, the Android-based smart TV platform that powers Chromecast as well as select smart TVs from companies including Sony and TCL, Protocol has learned.

To achieve this, Google has held talks with companies distributing so-called FAST (free, ad-supported streaming television) channels, according to multiple industry insiders. These channels have the look and feel of traditional linear TV networks, complete with ad breaks and on-screen graphics. Free streaming channels could launch on Google TV as early as this fall, but the company may also wait to announce the initiative in conjunction with its smart TV partners in early 2022.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

While it's easy to get lost in the operational and technical side of a transaction, it's important to remember the third component of a payment. That is, the human behind the screen.

Over the last two years, many retailers have seen the benefit of investing in new, flexible payments. Ones that reflect the changing lifestyles of younger spenders, who are increasingly holding onto their cash — despite reports to the contrary. This means it's more important than ever for merchants to take note of the latest payment innovations so they can tap into the savings of the COVID-19 generation.

Keep Reading Show less
Antoine Nougue,Checkout.com

Antoine Nougue is Head of Europe at Checkout.com. He works with ambitious enterprise businesses to help them scale and grow their operations through payment processing services. He is responsible for leading the European sales, customer success, engineering & implementation teams and is based out of London, U.K.

Protocol | Policy

Iris scans for food in Jordanian refugee camps

More than 80% of the refugees in Jordanian camps now use iris scans to pay for their groceries. Refugee advocates say this is a huge future privacy problem.

A refugee uses their iris to access their account.

Photo: KHALIL MAZRAAWI/AFP via Getty Images

Every day, tens of thousands of refugees in the two main camps in Jordan pay for their groceries and withdraw their cash not with a card, but with a scan of their eye.

Nowhere in the United States can someone pay for groceries with an iris scan (though the Department of Homeland Security is considering collecting iris scans from U.S. immigrants, and Clear uses iris scans to verify identities for paying customers at airports) — but in the Jordanian refugee camps, biometric scanners are an everyday sight at grocery stores and ATMs. More than 80% of the 33,000-plus refugees who receive cash assistance and (most of them Syrian) and live in these camps use the United Nations' Refugee Agency iris-scanning system, which verifies identity through eye scans in order to distribute cash and food refugee assistance. Refugees can opt out of the program, but verifying identity without it is so complex that most do not.

Keep Reading Show less
Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

Protocol | China

Weibo is muzzling users for discussing a landmark #metoo case

A number of accounts have been suspended, even deleted, after voicing support for the plaintiff.

Photo: Photo by Kevin Frayer/Getty Images

As a Beijing court dismissed China's landmark sexual harassment case on Tuesday, Weibo censors acted to muzzle a number of accounts that voiced support for the accuser, or even simply discussed the trial beforehand.

In 2018, the plaintiff Zhou Xiaoxuan, better known by the nickname Xianzi, filed a high-profile #MeToo case against Zhu Jun, a renowned state broadcast show host. Zhou claimed that Zhu sexually harassed her while she was an intern on Zhu's show in 2014. Chinese web users have closely followed the civil suit, which has also drawn international media attention.

Keep Reading Show less
Shen Lu

Shen Lu is a reporter with Protocol | China. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. She can be reached at shenlu@protocol.com.

Protocol | Enterprise

Take that, Slack: ServiceNow gets a little closer to Microsoft Teams

ServiceNow is expanding its decade-long partnership with Microsoft as both companies intensify their rivalry with Salesforce.

Microsoft and ServiceNow's "coopetition" is aimed at a higher goal: undermining Salesforce, which is fast becoming the main rival for both vendors.

Photo: Uwe Anspach/Getty Images

For ServiceNow, Microsoft is the lesser of two evils compared to Salesforce.

After ditching Slack for Teams following the Salesforce acquisition, ServiceNow is deepening its decade-long partnership with Microsoft, promising co-development of new products and fresh integration capabilities within Teams, it plans to announce Thursday.

Keep Reading Show less
Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Latest Stories