Judge’s idea for a compromise in Epic v. Apple case is not received well by both firms

According to Bloomberg, the bench trial between Epic and Apple took an unexpected turn when the judge overseeing the courtroom battle said that she has an idea for a compromise that could solve one of the game developer’s biggest concerns: app developers would be able to tell users that they have other options outside of the App Store. However, economists for both firms were not ready to give the idea a green light.
As a bench trial, the final decision is made by the judge instead of a jury. The judge presiding over this case, U.S. District Judge Yvonne Gonzalez Rogers, has been looking deeply into what has been called the “Apple Tax,” or the 30% of in-app purchases that Apple takes as its cut of such transactions. Game and app developers who sell their wares in the App Store are not allowed to use another in-app payment platform, outside of Apple’s.
Epic created its own in-app payment system for the purchase of V-bucks used by those playing Epic’s hit Fortnite game. But since this violated Apple’s regulations, Apple removed the game from the App Store. Judge Gonzalez Rogers also noted that Apple does not allow developers to include a link or other information in their apps that will send users to another store where they can make in-app purchases at a discounted price.

If Apple isn’t giving its developer partners and customers a choice, the company could be considered a monopoly and punished accordingly. On Wednesday, the judge asked Apple’s expert witness, economist Richard Schmalensee, “What’s so bad about it anyway, for consumers to have choice?” Schmalensee replied that opening up the App Store’s In-App payment platform would lead to a decline in the App Store’s “revenue flow.”

Judge Gonzalez Rogers asked Epic’s economist David Evans, “If Apple didn’t have these rules, would the problem be solved?” Evans replied that “That wouldn’t eliminate the market power Apple has here, but it would certainly diminish it. It would not be much of a solution at all,” he said, for apps and games that don’t have an alternative payment platform like  Epic has.

Besides Epic, other companies have complained about the 30% Apple Tax including music streamer Spotify, video streamer Netflix, and dating app developer Match.



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