Apple Users Are ‘Trapped’ in App Store, Epic Says at Trial Start

(Bloomberg) -- Epic Games Inc. alleges that Apple Inc.’s App Store has left users and developers “trapped” in an anticompetitive marketplace, while the iPhone maker accuses the creator of Fortnite of a “fundamental assault” on a business model that has enriched millions of developers.

Epic is trying to “undo” Apple’s home-grown marketplace that has given rise to lucrative app businesses and earned consumer trust, Apple attorney Karen Dunn said at the start of an antitrust trial Monday in Oakland, California.

Apple is facing a backlash from global regulators and some app developers who say its standard App Store fee of 30% and others policies are unfair and designed to benefit the iPhone maker’s own services. The fight with Epic blew up in August when the game maker told customers it would begin offering a discounted direct purchase plan for items in Fortnite, and Apple then removed the game app, cutting off access for more than a billion iPhone and iPad customers.

“Epic is here, demanding that this court force Apple to let into its App Store untested and untrusted apps and app stores, which is something Apple has never done,” Dunn told U.S. District Judge Yvonne Gonzalez Rogers, who is hearing the case without a jury. “Apple’s unwavering commitment to safety, security, reliability and quality does not allow that, and the antitrust laws do not require it.”

Earlier, Epic’s attorney had assailed the App Store as predatory, saying its monopolistic behavior is part of the “walled garden” of the Apple IOS ecosystem.

Epic “has dedicated enormous resources to take on the biggest company in the world,” in a fight not just for itself but all developers, lawyer Katherine Forrest said.

How Apple’s App Store Sparked an Epic Trial: QuickTake

Users are locked in by costs and developers by “onerous” contractual obligations with Apple that closely monitors and polices how its App Store functions, said Forrest, a former federal judge in Manhattan. Apple co-founder and former chief executive officer Steve Jobs told a high-level engineering executive as far back as 2008 that the App Store licensing agreement is designed to “avoid competitors,” Forrest said.

As the three-week trial kicks off, Epic is presenting its witnesses first, starting with Chief Executive Officer Tim Sweeney. In his first minutes of testimony, he told the judge that he started working with an Apple device when he was 12 but that the company’s policies have become “more and more restrictive” for developers over the years.

Later, Apple will call CEO Tim Cook and top executives Phil Schiller and Craig Federighi to the witness stand to explain how they designed the App Store, Dunn said.

As hundreds of people from the public and the media dialed in to an audio feed for the trial, which is expected to run for three weeks, Gonzalez Rogers called the case “high stakes” and said it raises “difficult issues.”

The case is Epic Games Inc. v. Apple Inc., 20-cv-05640, U.S. District Court, Northern District of California (Oakland).

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