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Power

On the ‘frontier’ of antitrust law, a judge recommends a jury make the call in Apple vs. Epic

"When you are taking on the biggest company in the world, when you know it's going to retaliate, you don't lie down in the street and die."

Fortnite

The hearing teased out the beginning of some of the bigger questions surrounding this case.

Image: Epic Games

The legal battle between Apple and Fortnite maker Epic Games continued on Monday in a hearing over whether Fortnite would remain kicked out of the App Store and the fate of Epic Games' Unreal Engine and other app properties as a result.

More than 500 people tried to tune into the hearing, maxing out the number of people who could dial into the Zoom call. Instead, fans of Fortnite violated court rules and started streaming the hearing onto YouTube and Twitch as part of the #FreeFortnite campaign.

But while Epic had its own internet fan base, the game maker hadn't seemed to warm over Judge Yvonne Gonzalez Rogers, who wasn't "particularly persuaded" by some of Epic's arguments, but also called some of Apple's reactions overblown.

She said she will be issuing a written order, but did not give a timeline on when she would make a decision.

The fight between the two companies centers on Apple's control over its App Store. Epic sued both Apple and Google last month for what it claims are monopolistic practices, like charging a 30% commission from all purchases of digital goods and not allowing developers to use their own payment systems. It also recently launched a new Coalition for App Fairness with other app developers like Spotify and Match Group to help lobby the companies to change their guardrails. Apple's core arguments continued to center around customer privacy and security, and Epic's recent actions were, in its mind, proof that controls are needed.

Epic had defied Apple's rules when it added a hotfix to the app and introduced a way for its game users to buy their own V-bucks and bypass Apple's payment systems. The stunt got Fortnite thrown out of the App Store, and it responded in a well-choreographed plan of immediately filing suit against Apple. (It would repeat the tactic against Google, too.)

"There's plenty of people in the public who consider you guys heroes for what you did, but it's still not honest," Gonzalez Rogers said.

Epic's lawyers argued that it was a necessary step it had to take because it showed that there was consumer demand for an alternative payments system after over half the buyers used Epic's option. (Apple's lawyers argued that the fact that it was only half showed that users still trust Apple's products more.)

Epic also defended its #FreeFortnite marketing campaign, which included a shot-by-shot re-creation of Apple's iconic 1984 ad, as necessary preparation.

"When you are taking on the biggest company in the world, when you know it's going to retaliate, you don't lie down in the street and die," said Epic lawyer Katherine Forrest.

But the hearing also teased out the beginning of some of the bigger questions surrounding this case, like whether we're talking about the iOS App Store market as a whole, like Epic would argue, or whether this should be compared to the video game market as an industry instead.

"This particular market has frequently had walled gardens, and it's hard to ignore the economics of the industry, which is what you're asking me to do," Gonzalez Rogers said.

There's also the question of when exactly Apple became a monopoly as Epic argues it now is. One of Apple's defenses is that it's always charged the 30% rate and, if anything, has only lowered that rate for companies offering digital subscription products. The 30% is also in line with other markets like Google's, which doubled down on its right to take a 30% cut and announced Monday that it would soon force companies like Netflix and Spotify into using its own payment systems.

"At what point in time did Apple become a monopolist?" asked Gonzalez Rogers.

It's a question that may end up in the hands of a jury to figure out instead. In the end, the judge recommended that the two sides proceed to a jury trial since she assumed whoever the losing party is will file an appeal and that the appellate court looks more favorably on jury verdicts. (This could have been in reference to the Qualcomm verdict, which was a bench decision overturned by the courts in August). "I know I'm just a stepping stone for all of you," she said.

Jury trial or not, Gonzalez Rogers signaled that it's likely that the Apple vs. Epic case would start next summer and could have a July 2021 trial date.

"As we've noted, these are important cases and they're on the frontier of antitrust law. You might as well find out what the people really think and want," she said.

Politics

'Woke tech' and 'the new slave power': Conservatives gather for Vegas summit

An agenda for the event, hosted by the Claremont Institute, listed speakers including U.S. CTO Michael Kratsios and Texas Attorney General Ken Paxton.

The so-called "Digital Statecraft Summit" was organized by the Claremont Institute. The speakers include U.S. CTO Michael Kratsios and Texas Attorney General Ken Paxton, as well as a who's-who of far-right provocateurs.

Photo: David Vives/Unsplash

Conservative investors, political operatives, right-wing writers and Trump administration officials are quietly meeting in Las Vegas this weekend to discuss topics including China, "woke tech" and "the new slave power," according to four people who were invited to attend or speak at the event as well as a copy of the agenda obtained by Protocol.

The so-called "Digital Statecraft Summit" was organized by the Claremont Institute, a conservative think tank that says its mission is to "restore the principles of the American Founding to their rightful, preeminent authority in our national life." A list of speakers for the event includes a combination of past and current government officials as well as a who's who of far-right provocateurs. One speaker, conservative legal scholar John Eastman, rallied the president's supporters at a White House event before the Capitol Hill riot earlier this month. Some others have been associated with racist ideologies.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

Politics

Tech legislation to watch in 2021

Maybe they'll actually get something done this year.

2021 brings a new presidential administration, a new Congress and maybe — maybe — legislation that actually goes somewhere this time.

Photo: Joshua Roberts/Getty Images

When it comes to tech policy, 2020 was not exactly a banner year for "getting things done." Washington focused on hearings, bills that went nowhere, negotiations that hit roadblocks, executive orders that didn't amount to much and then some more hearings.

But 2021 brings a new presidential administration, a new Congress and maybe — maybe — legislation that actually goes somewhere this time. Here are the big pieces to watch.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

Politics

Here’s how Big Tech is preparing for regulations in 2021

Companies know that the heat is only going to increase this year.

2021 promises to be a turbulent year for Big Tech.

Photo: Ting Shen/Getty Images

The open internet. Section 230. China. Internet access. 5G. Antitrust. When we asked the policy shops at some of the biggest and most powerful tech companies to identify their 2021 policy priorities, these were the words they had in common.

Each of these issues centers around a common theme. "Despite how tech companies might feel, they've been enjoying a very high innovation phase. They're about to experience a strong regulation phase," said Erika Fisher, Atlassian's general counsel and chief administrative officer. "The question is not if, but how that regulation will be shaped."

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Anna Kramer

Anna Kramer is a reporter at Protocol (@ anna_c_kramer), where she helps write and produce Source Code, Protocol's daily newsletter. 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.

People

The breakthrough list: 17 people who had a big 2020

They cut through the noise and found themselves in the spotlight this year.

Clockwise from left: Rashad Robinson, Chamath Palihapitiya, Gwynne Shotwell, Vanessa Pappas and Brian Armstrong all found themselves in the spotlight this year.

Photo: Getty Images and Protocol

It was a big year for Big Tech, with the CEOs of Apple, Google, Amazon, Facebook and Twitter all appearing before Congress and billionaires like Elon Musk becoming even richer. But they're not the only people with power in the tech industry.

This year, Protocol wanted to highlight the people in tech who broke through the noise and became a name you should know. Some, like Snowflake's CEO Frank Slootman, celebrated giant business successes, while others, like TikTok's Vanessa Pappas, found themselves in a global political match over an app. Coinbase's Brian Armstrong managed to play both the hero and the villain in a year, alienating some employees with a reportedly hostile workplace while being championed by many in Silicon Valley for taking a no-politics stance during a highly political year.

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Biz Carson

Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.

Facebook and Google are facing existential legal threats as government regulators and state attorneys bring five separate antitrust cases against them: two against Facebook and three against Google.

Photo: Stefani Reynolds/Getty Images

For the first time ever, there's a real chance that Facebook and Google could be broken up.

It's going to be a tough, years-long battle. But the companies are facing existential legal threats as government regulators and state attorneys bring five separate antitrust cases against them: two against Facebook and three against Google.

Keep Reading Show less
Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

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