Apple and 'Fortnite' Maker Epic Games to Square Off in Court
May 03 2021 - 5:59AM
Dow Jones News
By Sarah E. Needleman
A trial is slated to begin Monday between the maker of the
popular videogame "Fortnite" and Apple Inc. that could help
determine the future of how apps generate revenue through mobile
devices.
Opening statements are expected to begin about 8:30 a.m. PDT
(11:30 a.m. EDT).
U.S. District Judge Yvonne Gonzalez Rogers is presiding over the
planned three-week bench trial in Oakland, Calif.
Epic Games Inc. sued both Apple and Alphabet Inc.'s Google in
August after the companies removed "Fortnite" from their mobile app
stores. The companies say their moves were justified because Epic
broke their rules by inserting its own system for processing
payments made inside the game, a move that would potentially
circumvent the 30% slice of revenue they collect from in-app
purchases.
Epic, a closely held company valued at nearly $29 billion as of
last month, has asserted that Apple charges exorbitant fees to
mobile software developers and runs the App Store in a way that
stifles smaller businesses and prohibits fair competition. A trial
date hasn't been set in Epic's lawsuit against Google.
Apple has said that Epic's actions were a breach of contract and
that the game company has engaged in a smear campaign. Apple has
also said that there are many platforms in which "Fortnite" is
available, asserting that the market is mature and that it doesn't
hold anything close to a monopoly against developers.
Among those expected to take the stand Monday on Epic's behalf
is its co-founder and chief executive, Tim Sweeney, who spent
months plotting his company's attack on Apple with a team of around
200 Epic staffers, outside lawyers and public-relations
advisers.
Mr. Sweeney, 50 years old, is a seasoned programmer who prefers
an office uniform of cargo pants and T-shirts. A Maryland native
with a net worth exceeding $9 billion, according to the Bloomberg
Billionaires Index, he has testified in court before and spoken in
front of crowds at events such as Mobile World Congress and the
Game Developers Conference.
Epic's witness list also includes other company executives,
former Apple employees and employees of companies including
Microsoft Corp. Apple's witness list includes the company's CEO for
the past decade, Tim Cook, and other executives such as Phil
Schiller, who leads the App Store and Apple events.
Antitrust cases can be difficult for plaintiffs to win, legal
experts say, and Epic's lawsuit may hinge upon the court's
definition of a market in the digital age. Epic says Apple is a
monopoly in its App Store, while Apple says it is just one of many
distribution channels in the larger market for videogames and other
software.
Analysts also say that an appeal is likely regardless of the
trial's outcome, a possibility the judge outlined last year in
hearings.
Apple faces scrutiny from regulators elsewhere over its business
practices. The European Union on Friday charged the company with
violating antitrust laws for allegedly abusing its control over the
distribution of music-streaming apps. The case in Europe stems from
a 2019 complaint filed by Spotify Technology SA, which competes
with Apple's music-streaming service. The U.K. is separately
investigating whether Apple imposes anticompetitive conditions on
app developers, and U.S. lawmakers have accused Apple of operating
with "monopoly power."
In response to the EU charges Apple said Spotify has been
successful, even after removing paid subscriptions from its app in
the App Store. Apple also said Spotify's demand to be able to
advertise alternative deals through its App Store is a practice
that no stores allow.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
May 03, 2021 05:44 ET (09:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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