Last May, Epic Games was making plans to circumvent Apple’s and Google’s app store rules and ultimately sue them in cases that could reshape the entire app economy and have profound ripple effects on antitrust investigations around the world.
Epic’s chief operating officer, Daniel Vogel, sent other executives an email raising a concern: Epic must persuade Apple and Google to give in to its demands for looser rules, he wrote, “without us looking like the baddies.”
Apple and Google, Mr. Vogel warned, “will treat this as an existential threat.” To prepare, Epic formed a public relations and marketing plan to get the public behind its campaign against the tech giants.
Apple seized on that plan in a federal courtroom in Oakland, Calif., on Tuesday, the second day of what is expected to be a three-week trial stemming from Epic’s claims that Apple relies on its control of its App Store to unfairly squeeze money out of other companies.
Judge Yvonne Gonzales Rogers of California’s Northern District, who will decide the case, also asked Epic’s chief executive, Tim Sweeney, a series of pointed questions about its potential consequences. She asked whether he had any understanding of the economics of other types of apps, including food, maps, GPS, weather, dating or instant messaging.
“So you don’t have any idea how what you are asking for would impact any of the developers who engage in those other categories of apps, is that right?” the judge asked.
“I personally do not,” Mr. Sweeney said, in his second day on the witness stand.
Apple’s lawyers argued that Epic had attacked App Store fees to shore up a slowing business. Gross revenue on Fortnite, Epic’s flagship video game, shrank in the last three quarters of 2019 compared with 2018, according to an Epic presentation to its board of directors about its plan to fight Apple. The presentation was disclosed in court on Tuesday, along with the executive’s emails.
Under questioning from Apple’s lawyers, Mr. Sweeney said Epic’s own game store was not expected to turn a profit until at least 2024.
Epic’s lawyers said the lawsuit was not just about Epic and Fortnite but about fairness for all apps that must use Apple’s App Store to reach consumers.
“Our contention in this case is that all apps are at issue,” said Katherine Forrest, a lawyer at Cravath, Swaine & Moore.
Epic is not asking for a payout if it wins the trial; it is seeking relief in the form of changes to App Store rules. Epic has asked Apple to allow app developers to use other methods to collect payments and open their own app stores within their apps.
Apple has countered that these demands would raise a world of new issues, including making iPhones less secure.
On Tuesday afternoon, Benjamin Simon, founder of Yoga Buddhi, which makes the Down Dog Yoga app, testified about his company’s problems with Apple’s policies. Mr. Simon said that he had to charge more for subscriptions on the App Store to make up for the 30 percent fee that Apple charged him, and that Apple’s rules prevented him from promoting inside his app a cheaper price that is available on the web.
Mr. Simon said Apple warned app developers against speaking out about its policies in guidelines for getting their apps approved. “‘If you run to the press and trash us, it never helps,’” he said. “That was in the guidelines.”
