Last year’s judgment by Epic Games v. Apple left both sides unhappy with the outcome, with each filing their own appeal. The first appeal hearing took place on Monday, and the intent and effect of the Apple ecosystem – aka “Apple’s walled garden” – was the central issue debated.
Apple argued that the ecosystem is designed to protect iPhone users from malware and scams, while Epic argued that the US manufacturer is simply afraid of competition…
History between Apple and Epic Games
Epic Games sued Apple for not allowing it to use its own payment platform instead of in-app purchases through the App Store. The story began when Apple removed the Fortnite game from the App Store, after detecting a third-party payment system in the app, thus cheating the American manufacturer of its 30% commission.
After months of litigation, the court ruled that Apple must allow developers to direct app users to external payment platforms, but concluded that the company did not meet the legal criteria to be considered a monopoly – and therefore was not required to allow competing app stores for iOS apps. Both Apple and Epic Games have appealed different aspects of the decision.
Epic is appealing the ruling that the App Store is not a monopoly, arguing that there is no other way for developers to sell iPhone apps other than through Apple. For its part, the iPhone maker appealed, explaining that the court erred in law by examining the issue of anti-tilt.
The Justice Department’s Antitrust Division filed what is known as an amicus curiae brief, which is a statement from an uninvolved party intended to help the court make the right decision. . Although technically neutral and characterized as “not supporting either party”, the DOJ’s involvement furthers Epic’s argument that Apple has monopoly control over the iOS app market.
Additionally, attorneys general from 35 US states have also joined forces to submit an amicus curiae brief that again argues that Apple has monopoly powers.
Apple’s closed ecosystem
Our colleague from Arstechnica reports that the purpose and intent of Apple’s walled garden – of which the App Store is a key part – was at the heart of the conflicting arguments.
In defense of Apple’s position, attorney Mark Perry argued that the company’s restrictions on the distribution of iOS apps were put in place from the start to protect iPhone users. Based on its experience managing software security and privacy on the Mac, Apple decided that it “didn’t want the phone to be like a computer. Computers are buggy, they break down , they have issues. They wanted the phone to be better.”
Lawyer Mark Perry said the App Store protects iPhone owners from “fraudsters, pornographers, hackers, malware, spyware and foreign governments.”
Apple acknowledged that the App Store created “minor anti-competitive effects,” but said security concerns outweighed those.
From Epic’s perspective, however, the security rationale for Apple’s App Store policies is nothing more than an “excuse to remove all competition” in the app transaction market. iOS. According to Tom Goldstein, Epic’s lawyer, this excuse allows Apple to reap tens of billions of dollars in “supercompetitive profits” on a billion iPhone users.Goldstein admitted that Apple should be allowed to offer its “walled garden” App Store and might even entice users to take advantage of its vaunted security and privacy protections. What Apple shouldn’t be allowed to do, according to Goldstein, is use “contract and technology” to “not even allow a competitive alternative” to this App Store on iPhones.
Competing app stores could not only provide more options for developers and consumers, but also increase security. Epic gave the example of a hypothetical app store run by Disney, which could crack down even further on questionable content. iPhone owners should, Goldstein says, be free to choose the store that best suits their needs.
Result in 2023
In the end, the judges were not more convinced by one or the other of the arguments, asking pointed questions to Apple and Epic.
They will now examine the arguments in more depth and issue a final decision sometime next year. No date filtered, as the possible result.