Antitrust Claims
As the issue escalated, Epic took the legal route and filed a lawsuit against Apple last year, in a move that could set new standards for app distribution in the digital space. Besides Apple CEO Tim Cook and other senior executives, representatives of tech titans Facebook, Inc. (NASDAQ: FB) and Microsoft Corp. (NASDAQ: MSFT) are also expected to testify in the coming days. Earlier, Epic CEO Tim Sweeney had appeared before the court.
Apple Defends
In the initial phase of the trial, the Silicon Valley tech firm defended the antitrust charges citing its policy that does not allow iPhone users to side-load third-party apps, in view of maintaining quality. The company’s contention is that developers are benefiting from its platform that gives users access to their apps. Internal documents accessed as part of the trial showed that though Sweeney had emailed Cook a few years asking to make App Store an open platform by doing away with commissions, the attempt did not bear fruit. It is also learned that Apple executives had deliberated on reducing App Store commissions in the past, even at the time of former CEO Steve Jobs, but no action was taken.
Read management/analysts’ comments on Apple’s Q2 report
Earlier, Apple and Netflix, Inc. (NASDAQ: NFLX) had engaged in a similar tussle after the video streaming platform disabled the in-app sign-in facility for iPhone users, to circumvent the App Store commission. The Apple management reportedly pursued punitive actions against Netflix after a reconciliation bid failed, though the approach was rather friendly. The 30% commission charged for App Store downloads has been a point of contention between the company and developers for quite some time.
Google Clash
Epic had also filed an antitrust complaint against Google, owned by Alphabet, Inc. (NASDAQ: GOOGL), last year, claiming that the commission charged on in-app payments done through Play Store, which is the most widely used mobile app distribution platform, was unjustifiable. The move came after Google kicked off the Fortnite app that featured its own payment system.
Alphabet returns to growth mode amid ad recovery, cloud boom
Last month, Apple reported blockbuster results for the second quarter, with earnings more than doubling and revenues rising 54% to $90 billion as iPhone sales recovered from the recent slump. The company’s stock suffered early this week but regained momentum in the following sessions. They closed Friday’s trading slightly above $130, which is up 1%.