Apple Accuses Epic Games of 'Willful, Brazen, and Unlawful Conduct' in Countersuit Asking for Breach of Contract Damages

[pasamio]

The U.S. government made Apple divest themselves of their own software. That's how Claris ended up with Apple's software.

Do you have a reference for this? The Wikipedia article doesn't mention this as a part of it's history and seems to state that for it's entire existence, Claris has been a fully owned subsidiary of Apple. The article also seems to imply that this was driven by Apple rather than external forces.

 

[TiggrToo]

Will you clarify what you mean by predatory pricing? To me selling things to children that have historically been free unlockable components of games is predatory. Charging children money to see ads is predatory. Offering a special contract to an adult who has more to offer you than others seems totally reasonable.

Also, as it pertains to Antitrust: https://www.yalelawjournal.org/forum/predatory-pricing

 

[deevey]

Will you clarify what you mean by predatory pricing?

Lowering your prices so much that it puts the competition out of business and potentially the entire future of an industry at risk.

E.g. If Walmart decided to price every item at below cost for 6 months (which they could easily afford), virtually every other retailer in the surrounding area would not survive.

 

[4jasontv]

Also, as it pertains to Antitrust: https://www.yalelawjournal.org/forum/predatory-pricing

Thanks! Based on those links I doesn’t really see how Apple is it predatory.

 

[dguisinger]

Lowering your prices so much that it puts the competition out of business and potentially the entire future of an industry at risk.

Recent discussion of this I believe involved what Amazon did to Diapers.com..... when they refused to sell, they lowered their pricing until they forced them to sell a few years later because they ran out of money, then they jumped their prices back to normal.

 

[4jasontv]

Lowering your prices so much that it puts the competition out of business and potentially the entire future of an industry at risk.

E.g. If Walmart decided to price every item at below cost for 6 months, virtually not other retailer in that area would survive.

That’s not what the links tigger shared seems to say.

If your markup is 1000% and you lower it to 700% to get business, it’s not predatory just because your competition can’t afford to go that low.

 

[Wowfunhappy]

The manufacture cost of an ATV 4k is around $180 excluding marketing, R&D, Shipping, Taxes ...
The manufacture cost of the HomePod is believed to be in the $220 range, again before marketing, R&D, Shipping, Taxes..

May I ask where you're getting these numbers from? I was always under the impression that all Apple products were priced to have significant profit margins.

And, honestly, just speaking logically, Apple should not be spending $180 to manufacture Apple TV's when Roku is able to sell very similar products at a much lower price point and still make a profit. Yes, a Roku is not as nice, but that's mostly down to software. The AppleTV has a better CPU, I guess, but Apple also designs their own CPUs and has a significant economy of scale advantage.

 

[TiggrToo]

Thanks! Based on those links I doesn’t really see how Apple is it predatory.

And herein lies the issue. I've read your posts, your come a cross as a pretty smart clued up cookie. Yet you stumbled over the term Predatory Pricing believing it meant something totally different.

And this is why we have so many folk here screaming "monopoly!" like banshee's also not aware that there are legal terms and definitions at play.

Court cases are won and lost on actual legal definitions and not on mistaken beliefs or desires.

This isn't targeted at you good sir, but your reply seems the most appropriate one to post this to!

 

[TiggrToo]

May I ask where you're getting these numbers from? I was always under the impression that all Apple products were priced to have significant profit margins.

And, honestly, just speaking logically, Apple should not be spending $180 to manufacture Apple TV's when Roku is able to sell very similar products at a much lower price point and still make a profit. Yes, a Roku is not as nice, but that's mostly down to software. The AppleTV has a better CPU, I guess, but Apple also designs their own CPUs and has a significant economy of scale advantage.

Pretty sure the Roku is devoid of much usable RAM.

 

[Wowfunhappy]

Pretty sure the Roku is devoid of much usable RAM.

Ah, I honestly don't even know the Roku's specs, I didn't mean that as a literal comparison.

My point is... in an abstract sense, the AppleTV does not feel like a device that should cost $180 just to manufacture. If it really does cost that much, IMO Apple is doing something wrong.

 

[4jasontv]

And herein lies the issue. I've read your posts, your come a cross as a pretty smart clued up cookie. Yet you stumbled over the term Predatory Pricing believing it meant something totally different.

And this is why we have so many folk here screaming "monopoly!" like banshee's also not aware that there are legal terms and definitions at play.

Court cases are won and lost on actual legal definitions and not on mistaken beliefs or desires.

This isn't targeted at you good sir, but your reply seems the most appropriate one to post this to!

I’m not a lawyer. I’m not claiming to be one. I’m saying what I think it should be. I don’t care what the law say. I imagine being in each of their shoes, as well as my own, and share my thoughts as such.

I didn’t think it meant anything. It’s why I asked you what it meant. I gave an example of how it could be interpreted. You should know better than to use jargon that differs form normal speech without defining it first.

 

[deevey]

Thanks! Based on those links I doesn’t really see how Apple is it predatory.

Not currently, but if they reduced the App Store commission to 5% and the rest of the industry is at 30% ... it could then be perceived as potential predatory pricing.

 

[4jasontv]

Ah, I honestly don't even know the Roku's specs, I didn't mean that as a literal comparison.

My point is... in an abstract sense, the AppleTV does not feel like a device that should cost $180 just to manufacture. If it really does cost that much, IMO Apple is doing something wrong.

The Roku costs more than the Apple TV and I hope we can agree it’s not anywhere as good.

 

[4jasontv]

Not currently, but if they reduced the App Store commission to 5% and the rest of the industry is at 30% ... it could then be perceived as potential predatory pricing.

But that’s counter to Epics argument that the App Store is an ecosystem in itself.

 

[Wowfunhappy]

The Roku costs more than the Apple TV and I hope we can agree it’s not anywhere as good.

Okay, I'm sorry I made the Roku comparison! I'm just very, very surprised that the Apple TV costs $180 to manufacture. I think there's something wrong with that number and I'd like to know where @deevey got it from!

 

[dguisinger]

Not currently, but if they reduced the App Store commission to 5% and the rest of the industry is at 30% ... it could then be perceived as potential predatory pricing.

Why? Is it below cost? Just because everyone "accidentally" settled on 30% doesn't mean there is a market force at play other than none of them actually have competition.

 

[4jasontv]

Okay, I'm sorry I made the Roku comparison! I'm just very, very surprised that the Apple TV costs $180 to manufacture, I think there's something wrong with that number and I'd like to know where @deevey got it from!

Now someone is going to argue I am wrong on the price but I plant firmly that because the Roku has ads on hardware and software you pay every time you use it. Since ads are invasive and manipulative by nature the argument has to be made that the cost they impose must be added to the retail price.

As far as the Apple TV goes I don’t know why you feel that way. What makes you feel like it is overpriced?

 

[TiggrToo]

Ah, I honestly don't even know the Roku's specs, I didn't mean that as a literal comparison.

My point is... in an abstract sense, the AppleTV does not feel like a device that should cost $180 just to manufacture. If it really does cost that much, IMO Apple is doing something wrong.

Here's the two CPUs side by side (current AppleTV and latest Roku)

Apple A10 Fusion vs ARM Cortex-A53: What is the difference?

What is the difference between Apple A10 Fusion and ARM Cortex-A53? Find out which is better and their overall performance in the mobile chipset ranking.

versus.com

The list price disparity is shocking. Also the A10X runs 6 cores at 2.3ghz, compared to the 1.2ghz quad core Cortex. Add in memory (the Roku has 1GB and the cheapest AppleTV has 32GB.

So yeah, I can see the reason for the price difference...

 

[deevey]

May I ask where you're getting these numbers from? I was always under the impression that all Apple products were priced to have significant profit margins.

Apple TV 4K And AirPods Sold At Cost, HomePod At Loss: Report

According to Daring Fireball's John Gruber, Apple sells its Apple TV 4K and AirPods at cost and the HomePod at a loss. He also says that the company's products aren't overpriced, just 'too good of a product.'

www.techtimes.com

 

[TiggrToo]

I’m not a lawyer. I’m not claiming to be one. I’m saying what I think it should be. I don’t care what the law say. I imagine being in each of their shoes, as well as my own, and share my thoughts as such.

I didn’t think it meant anything. It’s why I asked you what it meant. I gave an example of how it could be interpreted. You should know better than to use jargon that differs form normal speech without defining it first.

As I said, my argument is not with you. It’s with people using terms to attack parties without actually knowing what the word means legally speaking.

 

[cmaier]

People always make this out to be that Epic wants to be on the App Store and not pay the fees Apple charges, but I've always seen this as Epic wanting the ability to bypass the App Store altogether and foot the bill themselves.

Wanting side-loading and not wanting to pay fees while being on the app store are not the same thing.

Then they should make their own operating system and their own phone. They don‘t get to pick and choose which pieces of Apple’s hard work they leach off of.

 

[cmaier]

My understanding, based on filings from both Epic and Apple, is that the functionality that allowed both payment methods to be offered was in the version of the Fortnite app (13.40) which was submitted to Apple on August 3rd. Epic had the app check with the server whenever it started to see whether that functionality should be activated - i.e., whether the second payment option should be shown to users. (Epic says that the Fortnite has always checked on start up to see if there was content to download or if existing functionality should be made accessible.)

Starting on August 13th, Epic's servers effectively told the Fortnite app to make both payment methods available.

That seems to be what Epic’s lawyer was trying (badly) to explain at the TRO hearing. “It was in the code“ and “Apple knew where to look” were things they said. (As if apple spelunks through source code in app review)

 

[cmaier]

The U.S. government made Apple divest themselves of their own software. That's how Claris ended up with Apple's software.

No, that is not what happened. Government had nothing to do with the formation of Claris.

 

[deevey]

Why? Is it below cost? Just because everyone "accidentally" settled on 30% doesn't mean there is a market force at play other than none of them actually have competition.

There is no evidence to suggest it would or would not be below cost. But reducing the pricing structure by a significant amount may open up an investigation which steers that direction.

Gas stations have a ton of competition, but yet the difference in pricing is mere cents on the gallon. Nothing we have actually seen suggests that the costs of curating an App Store is any different.

Anyhow the cost of the Apps appears to be no more than a marginal talking point in Epic's eventual endgame which is to sell a multitude of games they curate from other developers hosted on their own App Store which is conveniently located as a Sub-Store within the Apple App Store, bypassing IAP's and offering nothing significant to Apple in Return.

 

[TiggrToo]

That seems to be what Epic’s lawyer was trying (badly) to explain at the TRO hearing. “It was in the code“ and “Apple knew where to look” were things they said. (As if apple spelunks through source code in app review)

Terrific legal argument: “They didn’t see me steal the diamonds, your honour. ‘twas only when I told ‘em I’d nicked them that they felt me collar, m’lud. And that’s why I’m standing here ‘afore you today, guv.”

Case closed, innocent!