Friday, after A sort of controversial legal fighting Due to Apple’s alleged monopoly of the iOS ecosystem, a judge in California cut off the tug of war between Apple and Epic Games. Both sides can claim some victories. Epic Games must pay more than $3.5 million to Apple after bypassing its payment processor and violating the developer agreement. Apple must change its App Store rules to allow developers to use other payment systems—a blow to Apple’s iron-fisted control of the iOS ecosystem.
Although both companies ended their long trials with their respective successes, the structure of Apple’s App Store may change forever. Soon, App Store users will have many options to pay developers for their digital products—perhaps including some options not to charge these developers a commission.
The global $100 billion mobile gaming market is considered to be the most profitable frontier in the gaming industry. The court found that Apple’s share of the market is very large-more than 55%. Most of the market power comes from Apple’s vertical integration of its systems: Apple iPhone, Apple App Store and Apple iOS operating system. If their app is approved by Apple, developers will have a platform that can reach nearly 1 billion iPhone users. But in exchange, they are required to use the company’s payment processing services for most digital transactions. What Epic disputes loudly and forcefully is that Apple deducts 30% of the commission from these purchases-what is this Fort night Developers call it a “monopoly tax.”
when it File a lawsuit In August last year, Epic claimed that the company had violated antitrust laws and had constructed an “unreasonable and illegal” monopoly. As far as Apple is concerned, it requires developers to use its payment system to ensure customer safety and ease of use.
Apple’s 30% commission is standard, but not important to its business operations. Perhaps, it is not even guaranteed. At the end of 2020, partly inspired by the lawsuit, Apple launched a small business plan to reduce the commission for developers who earn less than $1 million through the App Store to 15%. (Other digital markets, including Epic Games, have reduced commissions to 12%.)
Although Epic Games described its campaign for a more open ecosystem as an ideological battle, U.S. District Judge Yvonne Gonzalez Rogers interrupted in Friday’s decision. A publicity speech for this $28.7 billion company. “The size of this market explains Epic Games’ motivation for taking this action,” she wrote. “After penetrating all other video game markets, the mobile game market is Epic Games’ next goal, and it sees Apple as an obstacle.” She found that although Apple’s profits are very high, it is in the eyes of the federal antitrust law. It does not monopolize the mobile game market. She accepted Apple’s argument that its strict control of the App Store is essential for security and to distinguish iOS from the more laissez-faire Android environment. “Success is not illegal,” she concluded, rejecting Epic’s grand plan to force Apple to allow other app stores (such as the Epic Game Store) to open stores in iOS.
But when Rogers turned her analysis to California’s unfair competition laws, Apple did not perform well. According to the regulation, Rogers concluded that Apple must stop prohibiting app developers from communicating with users about alternative payment methods inside or outside the app.She ruled that the policy “illegal stifles[s] “Consumer Choice” unfairly protects Apple from price competition by hiding information from consumers.
If you don’t understand why the same behavior can be considered anti-competitive under California law (not federal antitrust laws), then you are not alone. Many antitrust experts said that Rogers’ ruling was logically inconsistent.