Apple Lawyer Needles Epic CEO to Punch Hole in Monopoly Case

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May 04 2021, 11:10 PMMay 05 2021, 2:35 AMMay 04 2021, 11:10 PMMay 05 2021, 2:35 AM

(Bloomberg) -- Apple Inc.’s lawyer quizzed Epic Games Inc.’s chief executive officer to try to show that the iPhone maker, far from operating like a monopoly, helped give video gamers choices to play across different platforms.

In the second day of a high-stakes antitrust trial, the cross-examination of Epic CEO Tim Sweeney was aimed at weakening his company’s argument that Apple’s App Store is “a walled garden” that “trapped” developers with onerous conditions and limits user choice.

The trial before a federal judge in Oakland, California, is the first test of a broader backlash Apple is facing -- with billions of dollars in revenue on the line -- from global regulators and some app developers who say its standard App Store fee of 30% and others policies are unfair and self-serving.

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 its blockbuster Fortnite game, and Apple then removed the game app, cutting off access for more than a billion customers.

Richard Doren, an attorney for Apple, pointed out that his client’s iOS device users were allowed to game across different hardware platforms even as Sweeney complained to Sony Corp. in an email that friendships forged playing Fortnite -- a multiplayer battle-royale game -- were “being torn apart” because Sony didn’t allow cross-platform play. PlayStation enabled cross-platform play in 2018.

Likewise, Apple allows gamers to use Epic’s in-game virtual currency purchased on other platforms when playing games on iOS devices but Sony, which has also invested in Epic, doesn’t allow such cross-wallet play, Doren said.

“Sony finally agreed to cross-platform play, but it has never agreed to cross-wallet transactions, is that correct?” Doren asked. “Yes,” Sweeney said.

Sweeney was asked why he uses an iPhone over an Android phone -- a question meant to bolster Apple’s argument that App Store policies are designed to protect consumers from malware and security threats.

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

For Apple, security and privacy are “fundamental differentiators,” Doren said. “You personally prefer to use iPhone because Apple’s approach to protecting your privacy is superior to Google’s?” he asked.

Sweeney said, “That’s among the reasons.”

Epic’s attorneys returned to question Sweeney to give him a chance to clarify his responses to some of Apple’s questions in the first two days of trial.

Apple put Sweeney on the spot Monday to confirm that Epic takes a 40% cut when it publishes games created by other game developers. Sweeney drew a distinction from Apple’s App Store software distribution model, saying a publisher bears certain costs, including funding game development and marketing.

Apple is also arguing that before Epic sued, it asked for a special side deal that would allow the company to run its own direct-payment system that circumvents App Store fees.

“Would you have accepted a deal from Apple just for Epic, and not other developers?” Epic’s lawyer asked the CEO.

Sweeney candidly said, “Yes, I would have.”

When Sweeney’s testimony ended. Epic called Benjamin Simon, the chief executive officer of fitness app developer Yoga Buddhi, to the stand to discuss the App Store review process and developer interactions with Apple.