Epic v. Apple’s incredible judgment is going to be complicated. Experts from each party will present consumer data and economic theories. Executives will be grilled in business practices and forced to explain resolved emails. Lawyers will put their own spin on what this means. However, in the end, Case One can come down to a confusingly simple question: what is the market?
Its the case, the epic games, the agency behind the blockbuster video games Fortnet, Accusing Apple of establishing a monopoly on iPhone and iPad games by requiring it to download all apps through the App Store. Using that exclusive Apple, Suite complained that it could charge unfairly high fees from developers – reducing 30 percent of all transactions – who have no choice but to use Apple’s payment system if they want to reach Apple users. (Epic has filed a lawsuit against Google over the same complaint about Android, which has not yet had a trial date))
In its defense, Apple made a number of counter-suggestions, but the most important was: the App Store is not exclusive. People can download games from other places like Android phones, gaming consoles and desktop operating systems. Epic may focus on attracting customers to those platforms if it doesn’t like Apple’s terms of service.
The dispute comes down to how Judge Jovan Gonzalez Rogers, who presided over the federal trial that began this week, chose to define the relevant market. This is an important step in many cases of disbelief, because for exclusive proof, you have to show a market that is dominating. If Rogers adopts Apple’s market definition, Apple will win. In a market that includes Android, Xbox and laptops, there is no way to say that Apple has a monopoly on game distribution. And if it’s not exclusive, Epic’s other allegations don’t matter.
This means that the judge of Epic should understand that the market should be more narrowly defined as an iOS application. Of course, Apple has a 100 percent market share of mobile application distribution on its own platform. (Some owners have hacked their devices to be able to run their unauthorized applications, this is known as “jailbreaking”, but this is a small fraction of the users)) The biggest legal hurdles need to be cleared.
It would seem strange to say that a brand can count as a whole market but there is a precedent in the no-confidence law. In a major lawsuit filed in 1992 against Kodak for pushing buyers into its own repair service, independent businesses that provide repairs and equipment for Kodak copy machines have been shut down. Kodak argued that anyone who didn’t like it could stop buying Kodak machines. However, the Supreme Court Disagree. Sometimes the court noted, “a brand of a product can form an individual market.” In this case, from the consumer’s point of view, it is not uncommon for other brands to come to market once someone owns a Kodak copy. Kodak created an “aftermarket” for repairs. The keynote was known as interchangeability: “Services and parts for Kodak equipment are not interchangeable with services and parts from other manufacturers.”
Epic is making the same claim about Apple: the iPhone has created a modern market for apps. In the next market, you can’t say that any iPhone game is interchangeable with Android games, let alone an Xbox download. Some legal experts, however, doubt that this argument will work. Denver’s anti-trust attorney Paul Swanson noted that Kodak allowed the third-party repair market to grow year after year before it decided to crush its competitors, while Apple designed the iPhone (and iPad) as a walled garden from the very beginning. : Since the App Store was launched in 2006, one year after the iPhone’s existence, developers have always had to go through it and accept its terms before reaching customers. Courts tend to be embarrassed about forcing companies to change their business models.