Judge in Apple v. Epic Games Case Wants In-Person Trial Starting on May 3

[gregmancuso]

Cool, and I read somewhere that this is an entirely different situation because gaming consoles are a different business model and the hardware is heavily subsidized by the companies with the prospect of future games sales...

The subsidy-model used by the gaming consoles is completely irrelevant. The fact that console makers sell consoles below cost is a business decision separate and apart from their store fronts.

The only store to purchase an XBOX game download is the XBOX store. Period. The physical media option that you can purchase from Target or wherever pays the same fees to Microsoft as if it was purchased from the stores. And the XBOX store takes 30% of purchase too. Which equates to a higher per-transaction fee to MS as the average sell price for an XBOX game is $50 or so vs the ASP of the App Store of $5 or less.

I am not arguing the percentage of fees. Everyone has their own opinion of the "correct" fee, and I do not believe that is something that should be legislated or regulated. The fact that Epic has gone on record stating that the 30% to game consoles is fair proves that they don't have an issue with selling through other company's stores and that 30% is a fair fee. Using the "but they subsidize" argument is ludicrous.

Beside the point, but - I find it hard to believe that the game consoles are really subsidized any more as a PS5 for example is selling for $100 premiums over MSRP now. $400 - $500 for a game console is not what I would call subsidized.

 

[Alan Wynn]

Cool, and I read somewhere that this is an entirely different situation because gaming consoles are a different business model and the hardware is heavily subsidized by the companies with the prospect of future games sales...

First, consoles have not been heavily subsidized for several generations, and second, subsidizing an item to create lock in is actually an anti-trust issue, finally, even were that still true, I do not think their business model would matter to the courts - if it is an anti-trust violation.

 

[deevey]

While I agree Epic sued ONLY for their own interests, that action still caused Apple to reduce their App Store fee for smaller developers. I highly doubt they would have done it otherwise.

Speculation - that may have been in the pipeline for years (or so they could claim).

 

[bousozoku]

have judges heard about video conferencing? IMHO for a trial like this, that's the venue it should go ...

Judge Gonzalez is planning to hold an in-person trial that will require all witnesses to travel to Northern California to answer questions before the court and the judge. She believes that the case is significant enough that the court should hear it in person, with witnesses in the case less likely to lie when sworn in in a physical courtroom.

 

[deevey]

Beside the point, but - I find it hard to believe that the game consoles are really subsidized any more as a PS5 for example is selling for $100 premiums over MSRP now. $400 - $500 for a game console is not what I would call subsidized.

And production costs are going to reduce substantially year on year. If you are making the same device with aging technology for 7 years, they are going to be low low low.

 

[lkrupp]

This judge seems hall bent against Apple. Sounds like she has already made up her mind and this will be a show trial and kangaroo court for Apple.

 

[deevey]

You read that from Tim Sweeney, the CEO of Epic.

Dumb reason anyways. Nintendo Switch has made a profit off of hardware since day 1. It has less margins, but so does iPhone SE since Apple is betting customers would make up the difference in margins by buying Apple services. 0 difference there.

The iPhone SE is cheap as chips to produce as it shares 99% of its tooling and parts with the iPhone 8 - I'd guess the margins are probably on par or better than the iP 12

 

[Scipster]

They needed more time to get and review evidence. This is a very fast timeline for a federal case.

Certainly seems like it! I thought the original time frame back in September was a July/August 2021 start... was there a reason for moving it up or did it just end up that way?

This judge seems hall bent against Apple. Sounds like she has already made up her mind and this will be a show trial and kangaroo court for Apple.

And I actually think YGR leans more towards the defense. She's certainly skeptical of Epic's arguments. I don't think timeline plays into it at all.

In any event, she knows her ruling will ultimately be appealed. Just the first round of a years-long battle.

 

[Rochy Bay]

While I understand what you are saying, is this something that should be State mandated? Can't a person choose another phone? If I don't like how Sony makes a TV or Playstation doesn't let me play x-Box games I can leave that device. Why is this different and what validity can the state claim in altering a businesses method of maintain their platform? Which isn't even the largest platform? Why is the Apple trial first and not the Google trial is something I need to look into because Epic is suing both, yes?

Its different because Apple is cashing from both content creators and the customer. It seems that this hasn't affected your business (yet), or you must be an Apple employee. Either way, you will likely change your mind at some point. best wishes!

 

[Marshall73]

Like I have said before, Apple just needs to release an open iPhone, which can only have apps sideloaded, doesn’t support access to any Apple apps or services and retails for $3000. The increase in cost is to offset potential revenue earned by Apple in the lifetime of the device. Then all of the folk who want out of the walled garden can happily do so.

 

[cmaier]

This judge seems hall bent against Apple. Sounds like she has already made up her mind and this will be a show trial and kangaroo court for Apple.

Actually, she’s generally ruled in favor of Apple on things, and has said that she thinks Epic will have an uphill battle to show that the relevant market is what Epic says it is.

 

[Rochy Bay]

If that’s true, doesn’t that throw out their entire case?

Not necessarily, it can be a new move. This compares to the Ads anti-trust suits. If you can't choose y

Lawyers for Epic Games and Apple today participated in a management conference with Judge Yvonne Gonzalez to hammer out the details of an upcoming bench trial, which is set to take place on May 3.

Apple was aiming to get the trial delayed until a later date, but the judge denied the request and said that it will happen in May, which is what Epic Games was pushing for.

Judge Gonzalez is planning to hold an in-person trial that will require all witnesses to travel to Northern California to answer questions before the court and the judge. She believes that the case is significant enough that the court should hear it in person, with witnesses in the case less likely to lie when sworn in in a physical courtroom.

Health considerations will be taken into account for witnesses that aren't able to travel to California, but the court will look into people who say they can't visit the court in person.

The judge said that the people involved and the companies involved have the available resources to quarantine for two weeks after the trial. The court plans to put measures in place to keep participants safe, including a limited number of people in the courtroom. Witnesses will be positioned far from the attorneys in the case, with distance between parties, and enough space will be given that witnesses can speak clearly without masks.

Based on the COVID numbers in May, the in-person trial could be set aside, but the case will go forward in May no matter what, even if it is held entirely over Zoom. The judge is pushing for a two to three week trial, while Epic Games wants it to last four to five weeks, with the exact length to be determined later when all of the case details are ironed out.

The Epic vs. Apple trial will delve into Epic's accusation that Apple is a "behemoth seeking to control markets, block competition, and stifle innovation" by imposing "anti-competitive restraints" against App Store developers and employing "monopolistic practices in markets."

Epic Games will argue that the 30 percent cut that Apple takes from apps is "oppressive" as is the rule that requires developers to use in-app purchases. Apple lowered the 30 percent fee to 15 percent for developers earning under $1 million, but that does not apply to Epic Games.

Apple will attempt to prove that its App Store prices are fair and in line with other competitors in the market, and that its App Store policies offer important protections for consumers.

Article Link: Judge in Apple v. Epic Games Case Wants In-Person Trial Starting on May 3

My only question is whether this will affect stock market. ?~

 

[Rochy Bay]

Like I have said before, Apple just needs to release an open iPhone, which can only have apps sideloaded, doesn’t support access to any Apple apps or services and retails for $3000. The increase in cost is to offset potential revenue earned by Apple in the lifetime of the device. Then all of the folk who want out of the walled garden can happily do so.

still antitrust

 

[Marshall73]

still antitrust

nope.

 

[Marshall73]

Its different because Apple is cashing from both content creators and the customer. It seems that this hasn't affected your business (yet), or you must be an Apple employee. Either way, you will likely change your mind at some point. best wishes!

content Creator makes product, stores buy product for 70 bucks, sell to end user for 100 bucks. Store makes 30 bucks. content creator makes app and puts it on the App Store for 100 bucks, they make 70 bucks Apple makes 30 bucks. whats your point?

 

[Carnegie]

Not sure why Apple wanted to delay this, but I say the sooner this dramedy is over with and they can move on the better.

Apple doesn't have much to gain, relative to the status quo, from a decision in this case. It could get a judgment based on Epic having breached its contract; but the monetary award it might get wouldn't make a big difference for Apple. On the other hand, a decision against Apple could have significant negative effects on Apple.

So even if Apple believes a substantive final decision against it isn't likely in this case, it's in Apple's interests to delay such a possibility. A win for Apple means, more or less, the status quo. And status quo is more or less the situation in the meantime - i.e., before a decision is made.

Apple would surely take a decision today if it was sure that decision would be in its favor. But to the extent Apple can't be sure it will be, Apple would prefer it didn't come for 3 or 10 or 100 years.

 

[Marshall73]

This is all at the behest of Tencent anyway, Microsoft, Sony and Nintendo best pay attention because they are coming for them next.

 

[Carnegie]

If that’s true, doesn’t that throw out their entire case?

No. Epic hasn't really denied that it's breached the terms of Apple's developer agreements. Rather, Epic contends that those agreements and Apple's enforcement thereof represent antitrust violations.

 

[Carnegie]

If I had to bet, Apple wins. But I wouldn’t put money on it without a gun to my head. I think the judge clearly isn’t buying what epic is selling, but it will all depend on the evidence, and judges rarely overrule juries.

This is going to be a bench trial, so no jury.

 

[bobenhaus]

While I agree Epic sued ONLY for their own interests, that action still caused Apple to reduce their App Store fee for smaller developers. I highly doubt they would have done it otherwise.

I think the problem is Apple is too closed and if people want to make money its only through Apple's App store. Not very capitalistic if you ask me. I think the days of walled gardens are coming to an end sooner than later.

 

[Carnegie]

Certainly seems like it! I thought the original time frame back in September was a July/August 2021 start... was there a reason for moving it up or did it just end up that way?


And I actually think YGR leans more towards the defense. She's certainly skeptical of Epic's arguments. I don't think timeline plays into it at all.

In any event, she knows her ruling will ultimately be appealed. Just the first round of a years-long battle.

Epic wanted the trial to start in late March or early April. Apple wanted it to start in early August. The judge decided last October that it would start May 3rd. I don't think a different date had ever been set, so I don't think the date has been changed.

 

[farewelwilliams]

The iPhone SE is cheap as chips to produce as it shares 99% of its tooling and parts with the iPhone 8 - I'd guess the margins are probably on par or better than the iP 12

That extra money likely went into including an A13 chip.

But considering the chip's huge performance and iOS' longevity, this elongates the iPhone upgrade cycle at a $399 price point. So even if iPhone SE has high margins, this reduces iPhone revenue in the long run and instead increases their services segment revenue which still plays along the lines of "subsidized device price for software and services sales".

But even throwing out this entire argument, gaming consoles don't have yearly upgrade cycles. So how is Apple supposed to create a device that sells at a loss when the next one is going to replace it 365 days later? Sony and Microsoft can see profits from their hardware a few years after release while selling accessories and software at healthy margins.

Not to mention, there was a report that Apple sold Apple TV "at cost" by Gruber.

 

[jz0309]

https://forums.macrumors.com/thread...trial-starting-on-may-3.2286674/post-29649057 in response to this post by @bousozoku ...

I read that in the first place, and if someone’s life were at stake, yes, seems to make sense ... but we’re talking about 2 billion $ companies here, nothing at stake really other than billions of dollars ... give me a break.

PS I think that Epic should lose this, over video or f2f ...

 

[cmaier]

This is going to be a bench trial, so no jury.

ah, good point, especially now that the contract claims are out.

 

[cmaier]

If anyone wants to get a feel for the judge, she’s currently holding hearings on zoom on other matters:

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