No, I don't want to gloat, but it's mind-boggling what happened yesterday in that Oakland courtroom at the end of the main part (they're done apart from closing arguments on Monday) of the Epic Games v. Apple App Store antitrust trial. It's fair to say that at this point the question is most likely about remedies. Epic is on the winning track with respect to liability as Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California laid bare the bankruptcy of Apple's defenses. Being an App Store complainant myself (though I tried what I could to work things out), that's what I had hoped, but the hurdle was and remains high.
After my final pretrial post and Twitter thread, I didn't comment on the trial itself or on the issues in it. I just noted some suspicious Twitter activity.
I dialed in only for opening statements (followed by Epic Games CEO Tim Sweeney's testimony, which was almost inaudible) and for Apple CEO Tim Cook's testimony yesterday. In between, I just read other people's tweets (mostly not even in real time), particularly the ones by Protocol's Nick Statt (here's his report on how the judge "saved her best for last") and The Verge's Adi Robertson (here's his article, which contains a partial transcript of how Judge YGR grilled Tim Cook), but also others.
After the first couple of days, I was profoundly worried. The judge had tough questions for Epic, and some of the answers might have been tactically suboptimal. The inflection point in the early phase of the trial was the testimony of Lori Wright, a Microsoft Xbox exec. As far as I could see on Twitter, it was just perfect and definitely eye-opening.
I've been watching Apple's highest-profile cases over these past 10+ years, and seriously, I've never seen Apple that desperate. The way Apple is trying to shoot down Mrs. Wright's testimony (by a "motion for adverse credibility finding") is not the Apple so many people--for good reason--admire. Initially, Apple argued that she had a financial incentive. They were basically suggesting that Microsoft makes a lot of money with Fortnite on the Xbox, so it would testify in Epic's favor. That's like insinuating that Epic would pull Fortnite from the Xbox (as if it was going to remove the product from platform after platform) if Microsoft didn't testify to its liking. That's bad enough. But what's worse is that in the most recent filing, made a couple of days ago, Apple suddenly suggests the opposite, describing Epic as a "stalking horse" and "proxy plaintiff" for Microsoft.
Sorry, Apple: if Epic is in Microsoft's pocket, then Microsoft can't be in Epic's. If you descend into wild QAnon-style conspiracy theories, without a scintilla of evidence, then at least be consistent and don't contradict yourselves. Otherwise the judge is simply going to see that you want Microsoft's testimony stricken (because the truth hurts) and will stop at nothing to get your way.
It also doesn't make sense to stress that Epic called as many witnesses from Microsoft as from its own organization (five each). Epic is far smaller. You could probably get 90% of the information from Tim Sweeney alone. Microsoft is huge, and different people have knowledge in different areas.
There was another strange episode just yesterday: all of a sudden, Apple's counsel wanted to discuss an article with Tim Cook that just appeared while he was on the witness stand. Snap founder Evan Spiegel said they gladly pay Apple the 30% because they wouldn't exist without Apple. Well, Snapchat wouldn't exist without the Internet, or without telephone lines, or microprocessors, or without the founder's parents, and so forth. If everyone collected 30%, Snapchat would not exist. I strongly suspect that Apple saw things weren't going well for them. The longer the trial lasted, the worse it apparently got. So they tried a Hail Mary, which went nowhere (objection sustained: hearsay).
This, too, is not the Apple so many of us admire.
Cravath's Gary Bornstein, who represented Apple together with Katherine Forrest (she delivered the opening statement), actually asked Tim Cook whether he knew how many developers had testified for Apple during the trial. Mr. Cook didn't. Then Mr. Bornstein asked him whether he'd be surprised to know that the exact number was zero...
Those Cravath lawyers have been doing a phenomenal job for Epic, but undoubtedly the highlight of the trial was the roughly ten minutes during which Judge YGR took Tim Cook to task. She has it all figured out what I've known for years: Apple competes for end users, but not for developers. In a guest article published by the Korea Times a couple of months ago, I likened our situation to medieval feudalism or 19th-century Russia.
Getting back to the first trial week, its second half actually went better for Epic than some observers realized. Not only did Judge Gonzalez Rogers identify some inconsistencies and a certain degree of arbitrariness in Apple's app review decisions but she also made a remark on how competition spurs innovation, which in turn improves security. Here's a tweet about that from MLex reporter Michael Acton, whose tweets I also read on many trial days:
Very interesting from #EpicvApple judge, talking @Apple App Store security standards.
— Michael Acton (@MActon93) May 7, 2021
One problem with limiting competition is you don't get innovation - at least it's a possible outcome. So one concern is that if you're not allowing parties to compete, things won't improve...
The Associated Press simply got it wrong when it wrote after the first week that Epic needed heavier artillery. Epic wasn't on the winning track yet, but for sure on the right track, as I told some people at that stage.
Epic's lawyers kept building their case. At different points, the judge brought up the question of potential remedies. She doesn't want to overshoot. As a complainant whose problem with Apple relates to its inherently-subjective Objectionable Content guideline, I don't see how the problem could be solved without third-party app stores like the Epic Games Store. The 30% could be undercut and undermined in other ways. But for developers to regain some essential freedoms we had in the past, when the primary platform was Windows followed by the Mac and Linux, it takes more than an "anti-anti-steering" order, though it was another key moment when Judge YGR indicated she wasn't going to buy Apple's American Express analogy (that case was about an anti-steering provision).
The Senate Antitrust Subcommittee hearing and the European Commission's Statement of Objections (based on Spotify's App Store complaint) shortly before the trial didn't make things easier for Apple. It set the stage for what happened. Also, you don't want a Senate subcommittee in which there is total bipartisan consensus (apart from ideological nuances) and DG COMP to be at the heart of your conspiracy theories.
The current App Store situation is as unsustainable as it is legally and politically indefensible. Competition is needed, and competition is coming. I guess Fortnite will be back on the App Store in a few months' time, though the Epic Games Store is the more strategic topic not only in my opinion. The judge said she'd try hard to hand down her decision by mid-August.
There's no point in Apple-bashing. I've just called them out on their conspiracy theories (and didn't even talk about how different Apple witnesses denied knowledge of facts most observers would have expected them to know). If anything warrants an adverse credibility finding, it's the contradiction between "Epic pays Microsoft" and "Epic is Microsoft's puppet." Tim Sweeney is personally very committed to this cause. I've read many of his tweets since last summer, and saw a couple of interviews. According to reporters he was in the courtroom on all trial days. He obviously had to answer the question of whether he'd have taken a side-letter deal in the affirmative: you can't allege antitrust harm for yourself because you want to bring about change for others (simply put, Epic is not the FTC or the DOJ, who can sue on behalf of everyone). Epic's Project Liberty benefits developers large and small.
Apple holds the keys to the kingdom in its hands. If it makes the right decisions, it can become one of the most popular companies in the world among developers, if not even the most popular one.
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