The Apple-Epic Legal Battle Begins... Will It Trigger a Major Shift in the App Market?

First Antitrust Lawsuit Trial Today
Epic Games: "Apple's Excessive Fees and More Restrict Competition"
Apple: "Epic's Own Payment System Violates App Store Rules"
US Department of Justice Investigates Apple Antitrust Case

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The antitrust lawsuit trial between Apple in the United States and Epic Games, the game company famous for the game ‘Fortnite,’ over the App Store commission policy is about to begin. Depending on the trial outcome, there is speculation that the landscape of the digital app market led by big tech companies such as Apple and Google could change.

According to the Wall Street Journal (WSJ) on the 2nd (local time), the first trial of the antitrust lawsuit filed by Epic Games against Apple over the App Store commission issue will begin on the 3rd at the California District Court.

Earlier, in August, Epic Games filed an antitrust lawsuit against Apple, claiming that Apple’s enforcement of its in-app payment method (a system where payments are made only through the method provided by the App Store) and the imposition of a 30% commission on all in-app payments constituted anti-competitive behavior. In response to Apple’s commission policy, Epic Games built its own payment system, and Apple viewed this as a violation of App Store rules, removing Fortnite from the App Store, escalating the conflict between the two sides.

Epic Games explained the background of the lawsuit filing at that time by stating, "Apple controls the only distribution channel for iPhone apps through the App Store," and "It has abused this position by imposing excessive commissions on app developers, engaging in anti-competitive behavior." Epic Games also pointed out that Apple’s operating profit margin from the app market exceeds 80% due to this commission policy.

On the other hand, Apple rebutted by saying that since most apps are free, very few app developers pay commissions, and the actual commission charged to app developers averages 15%. Apple also explained that its App Store is just one of several app distribution channels and does not hold a monopoly position. Apple’s explanation is based on a broad view of the digital app market, interpreting that Apple’s App Store competes with other companies’ digital app markets such as Google’s Google Play Store and Sony’s PlayStation Store.

Regulatory authorities around the world are also moving urgently regarding the App Store commission issue. The U.S. Department of Justice is conducting an antitrust investigation related to Apple’s alleged anti-competitive behavior, and last month, a hearing on this issue was held by the Antitrust Subcommittee under the Senate Judiciary Committee.

The European Union (EU) filed a lawsuit against Apple on the 30th of last month for violating antitrust regulations. The EU pointed out that "the App Store, the only app market in the iPhone ecosystem, has effectively acted as a gatekeeper."

This Epic Games lawsuit begins amid ongoing conflicts between app developers and IT companies such as Apple and Google, along with continuing antitrust investigations and lawsuits by regulatory authorities, drawing significant attention to the future outcome of the trial.

If Epic Games wins, Apple may have to give up a significant portion of the profits it has explosively grown in the App Store market, backed by its App Store commission policy. Apple recorded $72.3 billion (about 81 trillion won) in sales from the App Store last year.

Conversely, if Apple wins, it could result in app developers worldwide having to unilaterally comply with Apple’s contract terms.

Randy Picker, a law professor at the University of Chicago, said, "This issue has significant implications for the current digital economy based on the app market," adding, "It could be comparable to past antitrust lawsuits filed against major IT companies such as Microsoft and Kodak."

This content was produced with the assistance of AI translation services.