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Apple’s app store goes on trial in threat to ‘walled garden’

San Ramon, CA (AP) —On Monday, Apple faces one of the most serious legal threats in recent years. Over 1.6 billion iPhones, iPads, and other devices.

The federal court proceedings have been filed by Epic Games, the maker of the popular video game Fortnite. Epic wants to defeat the so-called “walled garden” of the app store, which Apple started building 13 years ago as part of a strategy masterminded by co-founder Steve Jobs.

Epic accuses Apple of turning its former small digital storefront into an illegal monopoly, squeezing mobile apps and robbing a significant portion of its revenue. From in-game digital items to subscriptions, Apple charges a 15% to 30% fee for in-app purchases. Apple has denied Epic’s allegations.

Apple’s highly successful method has helped turn iPhone makers into one of the most profitable companies in the world, with a current market value of over $ 2.2 trillion.

Privately held Epic is insignificant in comparison and has an estimated market value of $ 30 billion. Its desire to grow, partly dependent on plans to offer an alternative app store on the iPhone. The North Carolina company also wants to be free from Apple fees. Epic says it forked more than hundreds of millions of dollars into Apple after adding a payment system that bypasses Apple and before expelling Fortnite from the app store last August.

Epic then sued Apple for a trial drama that could shed new light on managing Apple’s app store. Both Apple CEO Tim Cook and Epic CEO Tim Sweeney testify in federal court in Oakland, California. This court is set up to keep a social distance and always requires a mask.

Neither side wanted a jury trial, and the decision was left to Judge Yvonne Gonzalez Rogers of the US District Court.

Much of the evidence revolves around esoteric but important discussions about the definition of the market.

Epic claims that the iPhone is so pervasive in society that the device and its ecosystem will be monopolized and can be used by Apple to unfairly enrich itself and stop competition.

Apple claims it faces great competition from various alternatives to iPhone video games. For example, it points out that about 2 billion other smartphones are not running iPhone software and are not working with the app store. It is a smartphone that mainly depends on Google’s Android system. Epic has filed another proceeding against Google for illegally obtaining the app through its own app store for Android devices.

Apple also describes Epic as a desperate company hungry for revenue sources beyond its aging Fortnite. Epic claims that Apple just wants to free the iPhone ecosystem, which has invested more than $ 100 billion in the last 15 years.

Apple’s app store revenue estimates range from $ 15 billion to $ 18 billion annually. Apple hasn’t released its own numbers, but has challenged these estimates. Instead, it emphasizes not collecting 1 cent from 85% of the apps in the store.

According to Apple, the fees they have in their pockets are a reasonable way to recover their investment while funding the app review process, which is called essential to keep the app and its users secure. .. According to Apple Chief Compliance Officer Kyle Andeer, about 40% of the approximately 100,000 apps submitted for weekly reviews have been rejected due to some problem.

Epic tries to prove that Apple is taking advantage of security issues to disguise its true motives. In short, we maintain the monopoly that draws more profit from app makers that can’t be made available on the iPhone.

However, small businesses can face difficult battles. Last fall, the judge expressed skepticism in court before denying Epic’s request to revive Fortnite in Apple’s app store until the outcome of the trial. At that time, Gonzales Rogers claimed that Epic’s claim was “at the forefront of antitrust law.”

The trial is expected to last most of May and is set to take place within the next few weeks.

Apple’s app store goes on trial in threat to ‘walled garden’ Source link Apple’s app store goes on trial in threat to ‘walled garden’

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