On Tuesday, Apple filed its answer, defenses and counterclaims to Epic Games' antitrust action over its App Store terms (this post continues below the document):
20-08-09 Apple's Answer... by Florian Mueller
I'll talk about this in more detail on another occasion, but would like to share a few observations immediately:
While Google announced that it would seek the dismissal of Epic's complaint over the Play Store, Apple's filing says the iPhone maker "looks forward to defending against Epic's baseless claims."
The first of Apple's 27 defenses is "failure to state a cause of action," so Apple doesn't necessarily consider Epic's complaint legally stronger than Google does--but appears to have chosen a different procedural path than the Android maker.
On the basis of its counterclaims, which are largely based in contract law but also invoke California Unfair Competition Law, Apple seeks damages and "demands a trial by jury on all issues so triable."
With a view to next year's trial, we're probably going to see some disagreements between the parties on the extent of the jury's involvement, with Apple probably seeking to maximize--and Epic, conversely, seeking to minimize--the scope of what is put before the jury.
The following paragraph is the most interesting one to me--and I wouldn't be surprised to see some references to China in next year's trial:
"Not content with attacking Apple's app review process, Epic, backed by the tech giant Tencent (which has its own competing app store, one of the largest in the world), also seeks to dismantle the App Store's entire business model to advance its own economic interests without regard to the effect on other developers and consumers."
Tencent owns other games companies as well, such as Supercell (Clash of Clans, Hay Day etc.). And here's a link to Tencent's app store.
Apple's filing contains the term "side letter" (something Epic requested) six times. I haven't previously commented on this, but to me it's not clear yet which party is right: Epic publicly claims it's not seeking preferential terms, while Apple disagrees and alleges Epic wanted just that. I actually think we won't ever be able to know what Epic was originally seeking unless we create an alternative universe in which Apple would have invited Epic to discussions and offered a lower App Store commission, in which case it would have been interesting to see what Epic CEO Tim Sweeney would have done. The documents that have entered the public record so far, however, could also mean that the side letter Epic wanted was merely meant to provide legal certainty for an alternative in-app payment system. While such a side letter would have been confidential, its effects would have been very public: anybody could have seen an alternative, non-Apple payment option in Fortnite (for which iOS is apparently the largest platform).
On both sides, there are lawyers who were involved with the Apple-Qualcomm dispute (which was settled last year while opening arguments were underway in federal court in San Diego): Cravath for Epic (previously counsel to Qualcomm), and Gibson Dunn for Apple (previously counsel to Apple's contract manufacturers). They now have to play just the opposite roles, and interestingly, Qualcomm brought counterclaims on the basis of contract law just like Apple is doing now against Epic.
Again, there'll be more to say about the parties' positions going forward, as this battle is set to become an epic one, presumably lasting until all appeals are exhausted.
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