Ike Turner
Veteran
Epic Sues Apple and Google due to Fortnite getting pulled [2020-08-13, 2021-05-03]
- Thread starter eastmen
- Start date
Apple is going to contest any antitrust litigation. So it will take years and years.
Does Epic and any other developers plan to pursue it for that long? Or is Epic hoping the US DOJ will take up the case and pursue it across courts, across probably more than one presidential term?
The EU may more likely regulate since they have a predilection for going after US companies. But even they will take years. Even after they announce a decision, there will be negotiations. For instance, the EU has been going after Google for 10 years and in 2018, imposed a $5 billion fine. Google of course appealed and the case will go through the European court system for years before any kind of final decision is made.
https://www.reuters.com/article/us-eu-alphabet-inc-antitrust-idUSKCN1MJ2CA
So by the time govts and courts come to a final decision on a case like this, Fortnite probably won't be much of a thing any more.
I missed the link to where Forza Street isn't successful.
Silent_Buddha
Legend
Too busy at the moment to look up cases, but here's some information...
https://www.investopedia.com/terms/a/antitrust.asp
To gain or hold a monopoly. It isn't required that you are a monopoly in order to be prosecuted for anti-trust/anti-competitive/predatory behavior in the US under both the Sherman and Clayton acts.
Currently the mobile sector is seeing high consumer spending, hence why the Federal Government is investigating. Again, no mention of having to be a monopoly. Being a monopoly isn't required to be prosecuted for anti-trust/anti-competitive/predatory behavior. Being a monopoly only ensures that you are under the spotlight more easily. Not being a monopoly can allow you to escape the noticed of the FTC, but isn't a guarantee of non-prosecution.
Feel free to peruse this list of over 2000 case filings.
https://www.justice.gov/atr/antitrust-case-filings
Most of those don't involve monopolies.
Regards,
SB
Wait, DOJ is formally investigating Apple for antitrust violations?
Or you're talking about some congressional hearings or some congressman saying some stuff but is not involved in any prosecution?
I know it grinds some people because Apple is so rich but that doesn't automatically make them guilty or prove that their success is due to anticompetitive actions.
The 30% Apple collects in the App. Store is not a significant part of its revenues. Maybe a few billion a year out of the hundreds of billions in revenues.
Apple doesn't have a sky-high stock price because of that 30%.
Or you're talking about some congressional hearings or some congressman saying some stuff but is not involved in any prosecution?
I know it grinds some people because Apple is so rich but that doesn't automatically make them guilty or prove that their success is due to anticompetitive actions.
The 30% Apple collects in the App. Store is not a significant part of its revenues. Maybe a few billion a year out of the hundreds of billions in revenues.
Apple doesn't have a sky-high stock price because of that 30%.
Silent_Buddha
Legend
I didn't specify who is looking into the mobile sector, just that it's being looked into. Congress is part of the Federal Government. They won't prosecute, but they can recommend or pressure the FTC into opening a case if they decide they have seen enough to warrant such action.
Being investigated/questioned for/about possible anti-trust behavior isn't the same as being prosecuted for such, but it can lead to eventual prosecution.
Regards,
SB
dude did you miss my post a while ago here, noone contradicted it so I assume it is true then
you might want to sit down before you read this
prepare for a shock
the App store is apples most profitable sector,
yes larger than its phone business
(source) Apples financial statements
So to downplay the appstore in apples business interests is hilariously misinformed
To ram the point home further
Apple’s Services segment profits > iphones profiles + mac profits + ipad profits + iwatch profits
i.e. the profits from apple service's segment are greater than the rest of the company combined
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dude did you miss my post a while ago here, noone contradicted it so I assume it is true then
you might want to sit down before you read this
prepare for a shock
the App store is apples most profitable sector,
yes larger than its phone business
(source) Apples financial statements
So to downplay the appstore in apples business interests is hilariously misinformed
To ram the point home further
Apple’s Services segment profits > iphones profiles + mac profits + ipad profits + iwatch profits
i.e. the profits from apple service's segment are greater than the rest of the company combined
Services covers a lot more than just the AppStore, it's all their subscriptions services such as Apple Music, AppleTV+, iCloud, AppleCare, ApplePay/AppleCard
A skim on trillions worth of transactions adds up fast.
This will go down the same road as credit cards eventually. People get offended by surcharges making it very hard for higher end shops to sustain them, Apple will try to prevent surcharges through contracts and corrupt politicians can even be roped in to outlaw surcharges to "protect" consumers (it's fucking surreal but it fucking happens, even in the fucking EU credit card companies got gifted like that ... fuck the EU).
Apple has got a corner on electronic market access to affluent customers, they mostly didn't get that through anti-competetive behaviour ... but it still breaks markets regardless.
You're underestimating most of these services while overestimating the app store : https://www.theverge.com/2019/3/20/18273179/apple-icloud-itunes-app-store-music-services-businesses
$42 billion in revenue in a period of ten years is by no means insignificant but this is far from being the most profitable business of Apple
Again, I'd like to believe contactless payments are widely used but that isn't the case, especially in the US. Probably in the single-digit percentages of all credit card transactions.
Credit cards, especially some premium brands like Amex charge merchants more per transaction. Why do so many merchants still take them? Because it's what consumers demand and what's easier for many businesses. Rather than have to deal with cash all the time, which they'd have to hire armored vehicles to take to the bank, they can directly have sums go to their accounts.
So you see in Spain that all the contactless terminals at restaurants come with the branding of a Spanish bank, because they offer it to them as part of their merchant banking accounts. All the restaurants have them, including small cafes. Contrast that to the US and you don't see too many sit down restaurants bringing a wireless NFC terminal to the tables like they do in Europe.
Anyways, revenues from Apple Pay transactions are probably subsumed under Services and as noted in other posts, Services is not the biggest revenue source for Apple by a long shot.
(source) Apples financial statements
So to downplay the appstore in apples business interests is hilariously misinformed
To ram the point home further
Apple’s Services segment profits > iphones profiles + mac profits + ipad profits + iwatch profits
i.e. the profits from apple service's segment are greater than the rest of the company combined
Where did you get the numbers? I don't see any profit numbers by categories, only revenues, from the latest quarter financial statement.
The revenues from the service category in the latest quarter is about half of iPhone sales. It's high margin, but probably not twice the margin of iPhone.
Furthermore, profits highly depends on how you calculate costs, and it can be difficult to categorize how costs are attributed to.
https://www.apple.com/newsroom/pdfs/FY20-Q3_Consolidated_Financial_Statements.pdf
Judge in Apple v. Epic Case 'Inclined' to Side With Apple on Fortnite and Epic on Unreal Engine
That would impact Fortnite, other Epic Games, and the Unreal Engine used by third-party developers. Epic in response asked a Northern California court to stop Apple from ending Epic's App Store access with a temporary restraining order (TRO), and there was a court hearing on the matter today.
Right when the hearing kicked off, Judge Yvonne Gonzalez Rogers, who is overseeing the case, said that she was inclined to not grant relief with respect to games (including Fortnite), but that she was inclined to grant relief with respect to the Unreal Engine used by third-party developers. Rogers said that Epic created the current situation with Fortnite and could undo it by reverting to the status quo, so if her initial opinion is any indication of the outcome, we could see a restraining order that blocks Apple from restricting access to the Unreal Engine, but permits Apple to terminate the Epic Games developer account.
"Your client created the situation. Your client doesn't come to this court with clean hands. Epic made a strategically and calculated move to breach, and decided to breach right before a new season. So in my view, you cannot have irreparable harm when you create a harm yourself."
All Epic has to do is take it back to the status quo and no one suffers any harm. And you can have a trial date in the spring. Flip the switch to the way it was August 3rd and return everybody back to where they were.
Lawyers for Epic and Apple were both able to argue their positions, and given the initial inclinations of the judge, Epic largely focused on arguing why its games should be able to remain in the App Store without changes, while Apple focused on reasons why it should be able to block the Unreal Engine.
Epic's lawyer's argued that asking Epic to capitulate and go back to the status quo is akin to "asking us to require consumers to pay more than they should in a competitive environment" and that it had antitrust implications. "We can't go back into an anticompetitive contract," said Epic's lawyer. Epic also argued about the social aspects of the game, suggesting it was more than a mere game and a vital way to communicate during the pandemic.
Apple's lawyer argued that if Fortnite and other games are blocked from the App Store but development of the Unreal Engine is allowed to continue, Epic could just transfer its bad behavior to other entities. Apple also focused on potential harm to users and the need to enforce contracts, claiming that Epic broke Apple's App Store model, profited by it, and "placed customers in the middle." The judge said that it sounded like Apple was overreaching because Apple has separate contracts with Epic Games and Epic International for the Unreal Engine and one should not impact the other.
"The contract with Epic International has not been breached. Apple reached beyond its one contract with Epic Games and is using its hard leverage. It's slammed Epic Games with this additional penalty. It does to me look retaliatory. I don't see any harm to Apple to restrain you from not impacting the Unreal Engine on that platform or the developer's engine. It looks like overreach to me."
Epic argued that the Unreal Engine would be "destroyed" if it's blocked on Apple's platforms because developers use it for cross platform development. Epic's lawyers said that Epic has already heard from developers who are abandoning the Unreal Engine due to Apple's threat. Apple's lawyer in turn said that everything would be resolved if Epic falls in line with the App Store rules and eliminates the direct payment option in Fortnite.
Toward the end of the meeting, the judge said that the battle isn't going to be won or lost with a temporary restraining order, as there is a long legal fight to come, and it's not a "slam dunk" for either company.
"There's some measure of a lack of competition and high barriers to market entry. That said, there appears to be evidence that everyone that uses these kind of platforms to sell games is charging 30%. Whether Epic likes it, the industry and not just Apple seem to be charging that. Right now, Epic is paying Apple nothing. Epic itself charges third parties. This battle won't be won or lost on a TRO, and Apple has a reputation of going the distance so it's not surprising they acted the way they did here, but like I said, they overreached."
The judge plans to provide a ruling on the issue in the near future, letting Apple and Epic know whether Apple will be allowed to block Epic from all developer tools and accounts, or whether a temporary restraining order will prevent the Cupertino company from doing so.
Update: The judge overseeing the Apple v. Epic battle has granted a temporary restraining order that will prevent Apple blocking Epic's access to development tools for the Unreal Engine. The judge will not prevent Apple from terminating the Epic Games developer account, which will prevent Fortnite from being updated until Epic complies with the App Store rules.
Epic was unable to demonstrate that Apple's blocking of Fortnite will case irreparable harm as, as the ruling says, "the current predicament appears of [Epic's] own making." Epic was, however, able to demonstrate a "preliminary showing of irreparable harm" related to the revocation of Apple's developer tools for the Unreal Engine.
The judge points out that Epic International, separate from Epic Games, is responsible for the Unreal Engine development, and Epic International has "separate developer program license agreements with Apple and those agreements have not been breached." Apple had argued that it routinely terminates agreements for all linked developer accounts, which it will not be able to do in this case. From the ruling:
"Thus, in focusing on the status quo, the Court observes that Epic Games strategically chose to breach its agreements with Apple which changed the status quo. No equities have been identified suggesting that the Court should impose a new status quo in favor of Epic Games. By contrast, with respect to the Unreal Engine and the developer tools, the Court finds the opposite result. In this regard, the contracts related to those applications were not breached. Apple does not persuade that it will be harmed based on any restraint on removing the developer tools. The parties' dispute is easily cabined on the antitrust allegations with respect to the App Store. It need not go farther. Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem. In this regard, the equities do weigh against Apple."
Under the terms of the ruling, Apple is temporarily restrained from taking adverse action against Epic Games with respect to restricting, suspending, or terminating any affiliate of Epic Games, such as Epic International, from Apple's Developer Program, which mean Epic can continue to work on and distribute the Unreal Engine. The restraining order goes into effect immediately and will remain in force until the court issues an order on the motion for preliminary injunction.
The hearing for the preliminary injunction is set to take place on Monday, September 28, 2020.
That would impact Fortnite, other Epic Games, and the Unreal Engine used by third-party developers. Epic in response asked a Northern California court to stop Apple from ending Epic's App Store access with a temporary restraining order (TRO), and there was a court hearing on the matter today.
Right when the hearing kicked off, Judge Yvonne Gonzalez Rogers, who is overseeing the case, said that she was inclined to not grant relief with respect to games (including Fortnite), but that she was inclined to grant relief with respect to the Unreal Engine used by third-party developers. Rogers said that Epic created the current situation with Fortnite and could undo it by reverting to the status quo, so if her initial opinion is any indication of the outcome, we could see a restraining order that blocks Apple from restricting access to the Unreal Engine, but permits Apple to terminate the Epic Games developer account.
"Your client created the situation. Your client doesn't come to this court with clean hands. Epic made a strategically and calculated move to breach, and decided to breach right before a new season. So in my view, you cannot have irreparable harm when you create a harm yourself."
All Epic has to do is take it back to the status quo and no one suffers any harm. And you can have a trial date in the spring. Flip the switch to the way it was August 3rd and return everybody back to where they were.
Lawyers for Epic and Apple were both able to argue their positions, and given the initial inclinations of the judge, Epic largely focused on arguing why its games should be able to remain in the App Store without changes, while Apple focused on reasons why it should be able to block the Unreal Engine.
Epic's lawyer's argued that asking Epic to capitulate and go back to the status quo is akin to "asking us to require consumers to pay more than they should in a competitive environment" and that it had antitrust implications. "We can't go back into an anticompetitive contract," said Epic's lawyer. Epic also argued about the social aspects of the game, suggesting it was more than a mere game and a vital way to communicate during the pandemic.
Apple's lawyer argued that if Fortnite and other games are blocked from the App Store but development of the Unreal Engine is allowed to continue, Epic could just transfer its bad behavior to other entities. Apple also focused on potential harm to users and the need to enforce contracts, claiming that Epic broke Apple's App Store model, profited by it, and "placed customers in the middle." The judge said that it sounded like Apple was overreaching because Apple has separate contracts with Epic Games and Epic International for the Unreal Engine and one should not impact the other.
"The contract with Epic International has not been breached. Apple reached beyond its one contract with Epic Games and is using its hard leverage. It's slammed Epic Games with this additional penalty. It does to me look retaliatory. I don't see any harm to Apple to restrain you from not impacting the Unreal Engine on that platform or the developer's engine. It looks like overreach to me."
Epic argued that the Unreal Engine would be "destroyed" if it's blocked on Apple's platforms because developers use it for cross platform development. Epic's lawyers said that Epic has already heard from developers who are abandoning the Unreal Engine due to Apple's threat. Apple's lawyer in turn said that everything would be resolved if Epic falls in line with the App Store rules and eliminates the direct payment option in Fortnite.
Toward the end of the meeting, the judge said that the battle isn't going to be won or lost with a temporary restraining order, as there is a long legal fight to come, and it's not a "slam dunk" for either company.
"There's some measure of a lack of competition and high barriers to market entry. That said, there appears to be evidence that everyone that uses these kind of platforms to sell games is charging 30%. Whether Epic likes it, the industry and not just Apple seem to be charging that. Right now, Epic is paying Apple nothing. Epic itself charges third parties. This battle won't be won or lost on a TRO, and Apple has a reputation of going the distance so it's not surprising they acted the way they did here, but like I said, they overreached."
The judge plans to provide a ruling on the issue in the near future, letting Apple and Epic know whether Apple will be allowed to block Epic from all developer tools and accounts, or whether a temporary restraining order will prevent the Cupertino company from doing so.
Update: The judge overseeing the Apple v. Epic battle has granted a temporary restraining order that will prevent Apple blocking Epic's access to development tools for the Unreal Engine. The judge will not prevent Apple from terminating the Epic Games developer account, which will prevent Fortnite from being updated until Epic complies with the App Store rules.
Epic was unable to demonstrate that Apple's blocking of Fortnite will case irreparable harm as, as the ruling says, "the current predicament appears of [Epic's] own making." Epic was, however, able to demonstrate a "preliminary showing of irreparable harm" related to the revocation of Apple's developer tools for the Unreal Engine.
The judge points out that Epic International, separate from Epic Games, is responsible for the Unreal Engine development, and Epic International has "separate developer program license agreements with Apple and those agreements have not been breached." Apple had argued that it routinely terminates agreements for all linked developer accounts, which it will not be able to do in this case. From the ruling:
"Thus, in focusing on the status quo, the Court observes that Epic Games strategically chose to breach its agreements with Apple which changed the status quo. No equities have been identified suggesting that the Court should impose a new status quo in favor of Epic Games. By contrast, with respect to the Unreal Engine and the developer tools, the Court finds the opposite result. In this regard, the contracts related to those applications were not breached. Apple does not persuade that it will be harmed based on any restraint on removing the developer tools. The parties' dispute is easily cabined on the antitrust allegations with respect to the App Store. It need not go farther. Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem. In this regard, the equities do weigh against Apple."
Under the terms of the ruling, Apple is temporarily restrained from taking adverse action against Epic Games with respect to restricting, suspending, or terminating any affiliate of Epic Games, such as Epic International, from Apple's Developer Program, which mean Epic can continue to work on and distribute the Unreal Engine. The restraining order goes into effect immediately and will remain in force until the court issues an order on the motion for preliminary injunction.
The hearing for the preliminary injunction is set to take place on Monday, September 28, 2020.
Yes you're right, I was wrong, I was looking at the wrong thing
Sorry for the mistake
FWIW They do publish the gross margins by products and services
products 32.2% and has been getting smaller with each of the previous 3 years
services 63.7% and has been getting bigger with each of the 3 previous years
interestingly apple paid $19 billion in tax in 2015, but last year they paid only $10 billion
And in my country my bank is almost certainly is running a loss on each Apple Pay transaction, but are still supporting it. They were on record as saying Apple wanted far too much money ... they only changed their mind when their competitor started supporting Apple Pay any way, so effectively I'm getting fucked by my bank now to pay for all the Apple Pay customers. Just like with credit cards, but at least with credit cards there's some credible competition.
The strength of Apple's monopoly on affluent customers is immense and they are going to turn that into massive income, not just with Apple Pay but with Apple Card too. If regulators don't come down on them, they will be the first 10 trillion dollar company IMO. This decade.
How?
Are credit card transactions more expensive?
Did the bank increase the annual fee of the cards you have from them?
When I use Apple Pay, the price is the same, 99% of the time. There are stores here and there who may offer you a cash discount. Or there may be places that only take cash.
The merchant or restaurant probably build in higher prices to account for credit card transaction fees. But again, most of them are not offering you a discount for paying in cash.
If enough of them only took cash, I guess they could offer lower prices than stores and restaurants which take credit cards but there's no evidence of that occurring.
Pandemic may boost use of Apple Pay and other mobile wallets and contactless cards. But they are still a fraction of all transactions.
In store Apple Pay transactions here are generally not credit card transactions, they can be with a linked credit card but you can only use that if the store accept credit card transactions. Generally they are debit card transactions, which is why the bank has to cooperate for Apple Pay to work. For the store the Apple Pay transaction is exactly the same as a debit card transaction (couple cents) so obviously they won't charge me ... it's my bank which has to pay Apple for the transaction.
They raise fees frequently, or lower interest ... the money comes from their customer's pockets regardless.