In the ongoing legal battle between Apple and Epic Games, the two companies are this week calling up their expert witnesses to argue their points before Judge Yvonne Gonzalez Rogers, who will make a decision in the case after a three week trial.
Expert testimony is not as exciting as some of the leaked App Store documents that were highlighted last week, especially as much of what’s being discussed was shared by Epic and Apple ahead of the trial. When speaking to expert witnesses, however, Gonzalez Rogers hinted that she might aim for a compromise between Epic and Apple to solve the dispute.
As outlined by Bloomberg, there was a discussion about Apple’s rules that prevent app developers from directing users to make purchases outside of the App Store, such as through the web, as an alternative to in-app purchases.
Speaking to Epic expert witness Dr. David Evans, an economist specializing in antitrust, Gonzalez Rogers asked him if whether removing this rule would solve the problems that Epic and other developers have with App Store rules. “If Apple didn’t have these rules, would the problem be solved?” she asked.
Evans said that while it “wouldn’t eliminate the market power that Apple has,” it would “certainly diminish it.” Though for apps and games without alternative payment systems, he said it “would not be much of a solution.”
Apple has long prevented apps from directing users to outside purchase options. The Netflix app, for example, does not use in-app purchases but is not able to direct users to sign up for a subscription through the iPhone or iPad apps, instead using vague language to inform users that it’s just not possible to sign up in the app.
Fortnite, the game at the heart of the dispute between Apple and Epic, does support purchasing in-game currency (v-bucks) on the web, but Epic Games is not allowed to advertise that option in the app under the current rules.
If Fortnite and other apps were able to advertise alternative payment options available to customers that aren’t subject to Apple’s 30 percent cut, it would address Epic’s “walled garden” arguments and calls for alternative app store and payment options.
Apple is arguing to maintain the status quo, and when Apple witness and economist Richard Schmalensee was asked by the judge why it would be bad for customers to have choice, he pointed out that it would be undercutting the App Store sales and preventing Apple from collecting its commission.
It’s not clear how the trial will ultimately play out, but there are still several days to go. Week three should be much more interesting, with Apple executives like Tim Cook and Phil Schiller planning to testify.