Attorneys General App Developers Advocates Back Epic Against Apple

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Attorneys General, App Developers, Advocates Back Epic Against Apple

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Epic Games is garnering support in its antitrust battle with Apple from a wide variety of outside parties, including online dating company Match Group, attorneys general from 35 states, and the digital rights organization Electronic Frontier Foundation.

They are urging 9th Circuit Court of Appeals to reverse the bulk of a decision by U.S. District Court Judge Yvonne Gonzalez Rogers, who ruled last year that Epic failed to prove Apple violated federal or state antitrust laws.

“Apple’s anticompetitive policies increase consumer costs; reduce consumer choice; reduce the quality of the consumer experience; and reduce innovation,” Consumer Federation of America, along with online dating company Match Group, software company Basecamp and knitting app developer Knitrino, write in a friend-of-the-court brief filed late last week with the 9th Circuit Court of Appeals.

“All of these harms to the billion-plus consumers who use Apple’s iPhone are equally harmful to app developers, who are prevented from using more, better, and cheaper options to distribute and facilitate payment within their apps,” they add.

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Their papers come in a battle dating to last year, when Epic filed a lawsuit accusing Apple of monopolizing the iPhone and iPad app distribution market, forcing developers to use its payment processing system, and charging a commission on sales. (Apple requires game developers to use its payment platform for in-app purchases, and charges a 30% commission to developers that take in more than $1 million in revenue. Smaller developers pay only a 15% commission.)

Apple CEO Tim Cook testified during the trial that the company's App store policies boost privacy and safety for iPhone and iPad users.

He testified that the app marketplace “would become a toxic kind of mess,” if the company didn't vet apps, and that its policies benefit developers because they rely on “the store being a safe and trusted place.”

Gonzalez Rogers, who presided over a 16-day trial, ruled in September that Epic failed to prove that Apple's App store policies violated federal or state laws against monopolies.

Epic recently appealed that decision to the 9th Circuit, arguing that Apple's policies amount to an anti-competitive trade restraint.

An Utah-led coalition of 35 state attorneys general backing Epic contends that Gonzalez Rogers' approach “could frustrate future enforcement actions.”

They say she did not adequately balance Apple's reasons for its policies against potential harms to the market.

“Apple amassed billions in supracompetitive profits from one billion iPhone users,” the law enforcement officials argue. “Without balancing, this type of immense harm to consumers can go unanswered with just the slightest showing of procompetitive benefit.”

The digital rights group Electronic Frontier Foundation makes a similar argument, writing in its friend-of-the-court brief that Gonzalez Rogers didn't weigh Apple's rationale -- that tight control over apps promotes privacy and security -- against potential anticompetitive consequences.

“The court erred by treating Apple’s security rationale as conclusive, instead of recognizing that a dominant firm’s supplanting market forces with its own security and privacy decisions is anticompetitive -- not procompetitive -- and forecloses innovation,” they argue.

The organization adds that a finding against Apple “will unlock innovation across the mobile app world, including innovations in app distribution, payments, security, and privacy.”

Gonzalez Rogers ruled against Apple on one point: She said the company's anti-steering policies (which prohibit developers from offering in-app links to outside payment platforms) violated California's unfair competition law, and ordered Apple to allow developers to point users to outside payment platforms.

Apple appealed that portion of the decision to the 9th Circuit, which lifted that order in December.

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January 31, 2022 at 05:17PM