It looks like the ongoing legal tussle between Epic Games and Apple over Fortnite and the 30% App Store cut will be moving to the courts. In a hearing on Monday, Judge Yvonne Gonzales Rogers has stated that the antitrust matter should now move to a trial by jury, which could happen as early as July 2021.
The decision comes as part of a three-hour-long hearing during which Judge Gonzales Rogers reportedly drilled into both Epic and Apple with questions about the case, and while both companies repeated their originally stated points, the hearing did raise some new insights.
When asked why Epic objects so vehemently against the 30% cut, which is viewed by the judge as an industry standard, Epic argued that app distribution is an “aftermarket” derived from the smartphone primary market and is not part of a single product, and pointed to examples of apps that provide physical services like ridesharing apps or card payment apps that allow companies to have other payment processing systems. Consequently, 63% of iOS players only use the Apple platform, and the severing of Fortnite from iOS has effectively cut Epic off from what it calls a valuable user base that spends more on the game than on Android.
Apple’s counter-argument states that Epic’s exclusion is “self-inflicted” and further states that iOS players “need reasonable alternatives available, and they have that in spades,” referring to Fortnite’s cross-platform progression feature. It further argues that Apple’s payment system (IAP) was never marketed as a separate product, instead as a means to deliver safety, security, and other benefits to Apple’s users. In response, Epic pointed to 54% of iOS Fortnite users employing Epic’s direct payments instead of Apple’s from August 13th to August 27th as evidence that players want options. “We eliminated Apple’s ability to say there is no separate product. We showed that there is,” said one of Epic’s lawyers.
Ultimately, the judge agreed with Epic’s evidence but also stated that the company could have still complied with Apple’s requirements but chose not to. The judge also agreed that IAP is not a separate product and agreed with Apple’s view of Epic’s payment options inclusion as a form of sabotage, stating that Epic was “not forthright.” That said, Judge Gonzales Rogers believes that additional opinions are needed in this matter and did not rule on whether Fortnite should be barred from iOS, meaning the restriction is still in place.
“I think this is going to be a fascinating trial,” said Gonzales Rogers in the hearing. “Walled gardens have existed for decades. Nintendo has had a walled garden. Sony has had a walled garden. Microsoft has had a walled garden. In this particular industry, what Apple is doing is not much different. I think personally this case should be tried to a jury. I want everyone to think about that. I don’t think individual judges have the be-all and end-all here.”
