Epic appeals ruling in court case against Apple, as promised

Daniel Sims

Posts: 77   +5
Staff
In brief: Epic Games over the weekend filed an appeal to the recent ruling in its case against Apple. While that ruling sided with Apple on almost all counts, it didn't leave Epic entirely empty-handed, nor did it shut the door on Epic's claims going forward.

The appeal doesn't list any details as to why Epic is filing it, only that it's appealing the final decisions of the case to a higher court. It's clear, however, that Epic didn't get nearly everything it wanted, so this appeal was expected.

On the day of the ruling, Epic CEO Tim Sweeney said on Twitter that it wasn't a win for small developers. The next day he considered the case a loss. "Today: Lost a court case, climbed a mountain, read hundreds of pages of legal papers, wrote some code," he said. "Just as determined as ever to fight on until there is genuine developer and consumer freedom in software, and fair competition in each mobile platform software component."

The September 10 ruling included an injunction saying Apple could no longer stop developers on its iOS App Store from telling consumers about alternate payment options that don't go through Apple's payment system, thus cutting Apple out of the 30 percent of developer revenue it usually collects.

However, the judge of that case also said Epic hadn't provided enough proof for its claim that Apple's behavior was monopolistic. It also ordered Epic to pay Apple millions for directing Fortnite players on iOS to make in-game purchases outside Apple's payment system last year, which is what first launched the case.

While the judge said Apple isn't a monopoly right now, she did admit it may be on the way to becoming one. "The evidence does suggest that Apple is near the precipice of substantial market power, or monopoly power, with its considerable market share," wrote Judge Yvonne Gonzales Rogers in the ruling. "Apple is only saved by the fact that its share is not higher, that competitors from related submarkets are making inroads into the mobile gaming submarket, and, perhaps, because plaintiff did not focus on this topic."

Epic claimed Apple's platform represented a market in itself in which Apple held monopoly power. The ruling determined that iOS is simply part of a larger market of digital purchase commissions encompassing all mobile platforms. Nonetheless, this may leave the door open for another court in the future to label Apple's behavior monopolistic.

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Sausagemeat

Posts: 689   +493
Claiming Apple has a monopoly is like claiming that a shop has a monopoly on all the customers already inside its store. Its just not the case, these customers represent less than 50% of the market.

Tim Sweeney wants to sell to Apples customers in Apples stores without paying a penny to Apple themselves. It would be like setting up a shop inside your local supermarket without paying them rent. And he knows this, hes just trying to make more millions for his corporation.
 

brucek

Posts: 863   +1,253
He doesn't want to sell inside Apple's store. He wants to build his own store and for customers who have paid for their iPhones to have the right to install that store onto their own iPhone. Personally I think he has a point. It's my phone, I paid good money for it, and if want to install Epic Games Store on it I do not think Apple should be able to prevent me from doing so.

The funny thing is I'm not actually that big a fan of the Epic Games Store, I'd be more likely to want to install Steam but you get the point...
 

Vrmithrax

Posts: 1,587   +644
Claiming Apple has a monopoly is like claiming that a shop has a monopoly on all the customers already inside its store. Its just not the case, these customers represent less than 50% of the market.

Tim Sweeney wants to sell to Apples customers in Apples stores without paying a penny to Apple themselves. It would be like setting up a shop inside your local supermarket without paying them rent. And he knows this, hes just trying to make more millions for his corporation.

I see that logic often, and am confused by it. Probably because I'm not sure on a few details.

Does Apple not get a cut of every app sold on its store? So, they are getting money up front when the original game is sold.

Now, after that, are all of the games running through Apple servers or do they connect to external servers? I sincerely do not know how this works. If they are running through Apple servers, then yes your analogy of the store inside a store makes sense. If they are running on outside servers that have nothing to do with Apple, then no your analogy is false, and it's more like Apple is sitting on the road between their store and another store and demanding a toll to let you through to get to actually use the item you already paid for in their store initially..
 

Sausagemeat

Posts: 689   +493
I see that logic often, and am confused by it. Probably because I'm not sure on a few details.

Does Apple not get a cut of every app sold on its store? So, they are getting money up front when the original game is sold.

Now, after that, are all of the games running through Apple servers or do they connect to external servers? I sincerely do not know how this works. If they are running through Apple servers, then yes your analogy of the store inside a store makes sense. If they are running on outside servers that have nothing to do with Apple, then no your analogy is false, and it's more like Apple is sitting on the road between their store and another store and demanding a toll to let you through to get to actually use the item you already paid for in their store initially..

I don’t understand why you think Apple need to host the server. So what. You can buy a Samsung TV in Walmart and Walmart make a profit off that but it was made in Korea by Samsung. If you buy a Netflix subscription through the App Store Apple will take a cut on that but the service is hosted at Netflix. Users are allowed to buy the subscription elsewhere and use it on their iPhone and Apple will not make money from that. You have to understand that the App Store is a marketplace, like eBay. No one would expect to be able to sell on eBay without paying fees. Same thing here.

Apple do not have a monopoly, the judge made that clear and he knows more than you or me. They did state that if enough of the population are using iOS and becomes the doninant platform then it could be a monopoly. But as long as they do not represent everyone and people have alternatives it is not a monopoly.
 

cliffordcooley

Posts: 12,937   +6,267
Users are allowed to buy the subscription elsewhere and use it on their iPhone and Apple will not make money from that.
That is precisely what Epic is fighting for. Epic is fighting to represent themselves without paying the apple tax. And that is where the monopoly comes into play. Epic is not being allowed to compete with their own store front. All because of the regulation against side-loading.
 

Vrmithrax

Posts: 1,587   +644
I don’t understand why you think Apple need to host the server. So what. You can buy a Samsung TV in Walmart and Walmart make a profit off that but it was made in Korea by Samsung. If you buy a Netflix subscription through the App Store Apple will take a cut on that but the service is hosted at Netflix. Users are allowed to buy the subscription elsewhere and use it on their iPhone and Apple will not make money from that. You have to understand that the App Store is a marketplace, like eBay. No one would expect to be able to sell on eBay without paying fees. Same thing here.

Apple do not have a monopoly, the judge made that clear and he knows more than you or me. They did state that if enough of the population are using iOS and becomes the doninant platform then it could be a monopoly. But as long as they do not represent everyone and people have alternatives it is not a monopoly.
I think you missed my point. IF (and that's just an "if") Apple's servers are being utilized by the app in question continuously, then it only makes sense that they should get a cut of the revenue being utilized by that app. At that point, a 3rd party bypassing the "Apple cut" is essentially getting a bunch of free services and not having to pay a dime for it.

If, on the other hand, the servers are external and have nothing to do with Apple (which is how I suspect it is), then there is no reason that Apple needs to force their way into the middle to grab a chunk of ongoing revenue. If the only actual item that directly affects Apple (as in server usage) is the marketplace and hosting of the app itself for download, Apple already gets their cut at that point of sale.

To stick with the analogies theme, it would be more like buying a car from a dealership, and then that dealership forcing you to only buy gas through their gas stations, where they skim 30% off the top. That's essentially what Apple has been doing this whole time, by forcing all in-app purchases to be made only through their system, and that's what the court ruling found was at fault.
 

Sausagemeat

Posts: 689   +493
That is precisely what Epic is fighting for. Epic is fighting to represent themselves without paying the apple tax. And that is where the monopoly comes into play. Epic is not being allowed to compete with their own store front. All because of the regulation against side-loading.
Epic are fighting to set their store up within iOS and pay Apple nothing for the privilege. which is unprecedented, they have to pay the “tax” on other store fronts like Xbox and PS. As I mentioned, what they want to do is like building a shop front in someone elses shop and sell to theor customers whilst paying nothing.

I think you missed my point. IF (and that's just an "if") Apple's servers are being utilized by the app in question continuously, then it only makes sense that they should get a cut of the revenue being utilized by that app. At that point, a 3rd party bypassing the "Apple cut" is essentially getting a bunch of free services and not having to pay a dime for it.

If, on the other hand, the servers are external and have nothing to do with Apple (which is how I suspect it is), then there is no reason that Apple needs to force their way into the middle to grab a chunk of ongoing revenue. If the only actual item that directly affects Apple (as in server usage) is the marketplace and hosting of the app itself for download, Apple already gets their cut at that point of sale.

To stick with the analogies theme, it would be more like buying a car from a dealership, and then that dealership forcing you to only buy gas through their gas stations, where they skim 30% off the top. That's essentially what Apple has been doing this whole time, by forcing all in-app purchases to be made only through their system, and that's what the court ruling found was at fault.
I don’t really understand why you keep mentioning servers. Apple are charging for the use of their marketplace, not for their servers. So what if a service isn’t running on Apple? If you buy a service on almost any App Store the marketplace will take a cut, it doesn’t need to run on their servers. Without Apple these companies would not have millions of users to be able to sell their services too! A good example is steam, you can sell a game outside of steam and take 100% of the profit but without it being advertised on the steam home page hardly anyone is going to buy it. So they pay steam 30% to sell on their marketplace, they are paying for exposure to customers. Steam wouldn’t be expected to host anything.

What we have here is a big American multi billion dollar corporation trying to legally force another big American multi billion dollar corporation into letting it off of seller fees. If Epic win they get even more dollars, users get nothing.

I think a lot of peoples irrational hatred for Apple clouds their vision on this. Why should Epic be let off seller fees when everyone else everywhere pays them. Google, Valve, Sony, MS, Facebook, Nintendo, I could go on. They all charge the same. If we force Apple to open up they would have to force MS to allow people to buy Xbox games from anyone etc etc.
 

brucek

Posts: 863   +1,253
The difference may be in do you feel the iPhone is more like a computer or more like a game console. You've always been able to install whatever you want on your computer, and there's always been limits on the consoles. The justification for the difference was that the consoles were sold at below manufacturing cost and the per-game tax was how the hardware was actually financed.

Going by this line of thinking, I feel the phones are more like computers. They are sold at very high profit margins from day one. As a user you've fully paid for your phone, you should own it and that includes the right to install the software of your choice (and also to repair it, but that's another article.)

 

Reehahs

Posts: 1,263   +930
The difference may be in do you feel the iPhone is more like a computer or more like a game console. You've always been able to install whatever you want on your computer, and there's always been limits on the consoles. The justification for the difference was that the consoles were sold at below manufacturing cost and the per-game tax was how the hardware was actually financed.

Going by this line of thinking, I feel the phones are more like computers. They are sold at very high profit margins from day one. As a user you've fully paid for your phone, you should own it and that includes the right to install the software of your choice (and also to repair it, but that's another article.)

That's a good example.

Another example is getting forced to use a specific fuel company and a specific payment method to purchase the fuel for your car by the car's manufacturer.
 

m4a4

Posts: 2,507   +2,926
TechSpot Elite
Epic are fighting to set their store up within iOS and pay Apple nothing for the privilege. which is unprecedented, they have to pay the “tax” on other store fronts like Xbox and PS. As I mentioned, what they want to do is like building a shop front in someone elses shop and sell to theor customers whilst paying nothing.
Hmmmm, if only we've heard of any other OS's that allow this. Any other general purpose OS's where the maker of said OS doesn't take a cut on 3rd party installations, and they don't impede the installation of other stores.

If only there were other popular OS's where such precedence was set.

/sarcasm
 
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Sausagemeat

Posts: 689   +493
That's a good example.

Another example is getting forced to use a specific fuel company and a specific payment method to purchase the fuel for your car by the car's manufacturer.
Nobody is forced to use Apple. It’s very clear in the EULA when you buy an iPhone that you can only install apps from the App Store. Absolutely nobody needs to use iOS, there are alternatives.

Personally I like iOS just the way it is. Getting a judge to force Apple to open the operating system to any mug who wants to make software for it will just ruin the experience and we all know it.

I people feel strongly about having an open platform then they should buy a device that doesn’t run iOS. These people are not likely to be using iOS anyway so I don’t understand why these people want to force Apple open against their wishes.

Hmmmm, if only we've heard of any other OS's that allow this. Any other general purpose OS's where the maker of said OS doesn't take a cut on 3rd party installations, and they don't impede the installation of other stores.

If only there were other popular OS's where such precedence was set.

/sarcasm
I know you think you are being smart but you are not. There is no precedence of an OS that then opened up and allowed third parties free of charge. The closest comparisons come from Sony and MS.
 

Sausagemeat

Posts: 689   +493
The difference may be in do you feel the iPhone is more like a computer or more like a game console. You've always been able to install whatever you want on your computer, and there's always been limits on the consoles. The justification for the difference was that the consoles were sold at below manufacturing cost and the per-game tax was how the hardware was actually financed.

Going by this line of thinking, I feel the phones are more like computers. They are sold at very high profit margins from day one. As a user you've fully paid for your phone, you should own it and that includes the right to install the software of your choice (and also to repair it, but that's another article.)
Hardware does not need to be sold under cost to be locked down. That might be the justification quoted. But there is no legal requirement for any hardware manufacturer to make a loss if they want to close their operating system.

And you are technically allowed to install anything on your hardware. But you lose Warranty and Security protections offered by the manufacturer. This has been ruled by a judge in the past. Epic can release software that requires the user to “jailbreak” their device but they know that this would mean hardly anyone would bother as most users are not interested in jail breaking,

If you want an open device, don’t buy Apple.
 

m4a4

Posts: 2,507   +2,926
TechSpot Elite
I know you think you are being smart but you are not. There is no precedence of an OS that then opened up and allowed third parties free of charge. The closest comparisons come from Sony and MS.
If only Apple had an opened OS. Darn, silly me for not being a fanboy. And doesn't Apple market their computer-like iPad OS like it's a PC/Mac? (oops)

But in all seriousness, using the "iOS is a specialized OS and not like a computer" excuse is BS. Especially when you think it's anything like Xbox/PlayStation (specialized for gaming).
Like, in what reality are you going to your boss and telling them that you're going to finish your reports on your PS5? Do you hear how silly your comparison is? How much of a fanboy you sound like just to excuse Apple for being less competitive?
 

Sausagemeat

Posts: 689   +493
If only Apple had an opened OS. Darn, silly me for not being a fanboy. And doesn't Apple market their computer-like iPad OS like it's a PC/Mac? (oops)

But in all seriousness, using the "iOS is a specialized OS and not like a computer" excuse is BS. Especially when you think it's anything like Xbox/PlayStation (specialized for gaming).
Like, in what reality are you going to your boss and telling them that you're going to finish your reports on your PS5? Do you hear how silly your comparison is? How much of a fanboy you sound like just to excuse Apple for being less competitive?
Lmao you do not have a clue what you are talking about. Yes it is a computer. But being a computer does not mean it has to be open by default. Why on earth would you think it does?

You sign an agreement when you buy an iPhone and use its OS. I’m sorry if you did not know that.

Anf I’m not being a ”fanboy“. I just actually understand what Apple sell. You clearly do not.
 

Cubi Dorf

Posts: 360   +235
If developer can use alternate pay system that does not giving apple any monies then it is harder to argue monopoly. Apple still make some monies from annual developer account fee. Unfortunately that fee probably keep many open source, third world, and student developer out. There is student account I think, but agreement is unreasonable. I would not do.
 

Sausagemeat

Posts: 689   +493
Thanks for showing me and the thread that you aren't to be taken seriously.

Can't defend your position, so you just reply with nothing.

Edit: nice after-reply addition. Too little too late.
There is nothing to defend from. You have made no argument. All you have done is demonstrate that you do not understand the product that Apple sells and that you hate Apple.

You made a point about what people use iphones for. Which tells me you do not understand the market or the product. For some reason you think an OS should be open or closed based on what the user does with it. Which is bizarre. Why would you think this? Any operating system is open or closed because the creator sets it so.

Look you clearly have an irrational hate for Apple. We both know people like you are not going to buy an iphone even if they made it open or not. So why ruin the fun for the rest of us? For me, iOS is far far better than any other OS on the devices I use it for and judges passing laws to force the company to allow anyone to code for it simply for the financial gain of other corporations would ruin it.

Thankfully the judges are not that stupid...
 

cliffordcooley

Posts: 12,937   +6,267
Good. Epic can go rot.
I couldn't care less about Epic or Apple. But what Epic is fighting for will help all developers. I can't for the life of me understand. Why anyone would support Apple to the extent of continuing to screw over all of their developers. Don't fight for Apple. Don't fight for Epic. Fight for the greater good of the platform. Forced in paying an Apple tax just to get an app on IOS is not the greater good.