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May 14, 2021, 6:18 p.m. EDT

Apple v. Epic: Apple is ready to defend itself from anticompetition claims

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By Jon Swartz

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Read more: Apple vs. Epic: Why cloud gaming became a hot topic at landmark antitrust trial

Aashish Patel, Nvidia’s director of product management, earlier explained how the company had tried to get its GeForce Now cloud gaming service into the App Store, but faced the same restrictions as Microsoft. “There are less controls over the streaming, so you could argue in some ways it’s worse,” than a native app, he said.

A member of Apple’s legal team characterized the criticisms as the “cherry-picking” of a few disgruntled developers, then leveled a broadside at Microsoft. He called out the company’s “hypocrisy” for its posture on the case in light of its yearslong case with the Justice Department over anticompetitive business practices.

(Late Friday, a member of Apple’s legal team noted that five Epic witnesses had ties to Microsoft — more than the total number of witnesses from Epic. The Apple rep jokingly referred to the case as a Microsoft trial with Epic as plaintiff. )

“I might be biased, but I think that what we do is incredibly unique,” Matthew Fischer, vice president of the App Store, said under questioning from an Apple lawyer. “I have not see any marketplace that distributes apps or games do what we are doing in terms of providing marketing and editorial support like this to developers.”

Fischer detailed a largely positive relationship with Epic Games since 2010, but said he had not talked to a company representative since June 2020 and was “blindsided” by Sweeney’s email in August 2020 critical of Apple.

Create public pressure for antitrust legislation. Apple has long contended that Epic’s lawsuit is a PR campaign in search of a legal strategy, and at least two legal experts agree.

Florian Ederer, an associate professor of economics at Yale School of Management, lauded Epic’s legal team but expects Apple to win the case. The longer-term strategy for Epic, he told MarketWatch, is to “get some form of long-term regulation” on commissions demanded by digital platforms.

“This is about lining up other participants [such as Sony and Microsoft] in the ecosystem against Apple, to upset consumers, and force Washington to enact legislation,” Larry Downes, project director at the Georgetown’s Center for Business and Public Policy’s Evolution of Regulation and Innovation project, told MarketWatch. Downes, too, anticipates an Apple victory in court.

Read more: Apple v. Epic: Time is running out for Epic to make its antitrust case

Apple, which has benefited from a ruling that let it present its expert witnesses immediately following Epic’s witnesses, could begin its defense as early as Monday. Expect the company to present arguments that mirror some of the points in executive Andeer’s letter to the Senate on Friday.

Apple Fellow Phil Schiller, who helped oversee Apple’s products and marketing for 30 years, is expected to be the company’s first witness. His task is likely to narrate the success story of the App Store, from its inception in 2008 to what Apple now calls an “economic miracle” for thousands of developers.

Earlier this week, one Apple expert witness reinforced that notion that competition and output is thriving on the App Store.

Between 2010 and 2018, the number of transactions increased 1,200% on the store and revenue skyrocketed 2,600%, asserted economics professor Loren Hitt, of the University of Pennsylvania Wharton School of Business, who examined 60 billion transactions in the App Store during those eight years.

Apple’s list of witnesses next week will most likely culminate with CEO Tim Cook. Following a short rebuttal from Epic, the trial should conclude the week of May 24.

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