Apple And Fortnite Duke It Out, With Consumers And Lawmakers Caught In The Middle

The case against Apple by “Fortnite” developer Epic Games is preparing to head to court, with broad ramifications for the entire tech industry. The hearings, however, could wind up as a no-win situation for Apple as its dirty laundry is aired out before increasingly skeptical lawmakers and federal regulators.

The key question of the case is whether Apple’s app store is functioning as a monopoly that Apple leverages over app developers.

Apple’s storefront is the only way to install new software on iOS phones, and comes with a variety of restrictions: Developers must accept payment through Apple’s payment system, which pockets up to 30% of the transaction.

When Epic Games introduced its own payment system it knew it was in for a fight, doing the same on Android systems and starting an advertising push comparing Apple to George Orwell’s “1984.”

Now it falls to Judge Yvonne Gonzalez Rogers in the northern district of California to decide whether the barriers to leaving Apple’s ecosystem are high enough to brand it a monopoly and whether Apple misused that power.

Emails uncovered during discovery might already have Apple on the back foot: One exchange sees Apple executives arguing against allowing iMessage on Android phones by saying it would “remove an obstacle to iPhone families giving their kids Android phones.”

Another message calls into question whether Apple’s exclusive storefront increases security through its screening, with an executive calling the process “more like the pretty lady who greets you with a lei at the Hawaiian airport than the drug-sniffing dog.”

That may spell trouble for Apple even if it eventually prevails. Lawmakers have been breathing down the necks of big tech for months.

“Frankly, for Epic, it’s been a case of very good timing, because pretty much everybody around the world is looking at this problem,” Herb Hovenkamp, an antitrust professor with the University of Pennsylvania, told The Washington Post. “The DOJ I’m sure is paying close attention to this.”

“Looking at” might be an understatement. The European Union has just accused Apple of similar tactics in its music store. Lawmakers stateside pulled Kyle Andeer, Apple’s chief compliance officer, in front of the Senate Judiciary Committee.

“If you presented this fact pattern in a law school antitrust exam, the students would laugh the professor out of the classroom because it’s such an obvious violation of our antitrust laws,” Sen. Richard Blumenthal, D-Conn., said. “Enforcement of them is too little, too late. Courts are overly deferential, agencies are reluctant to bring lawsuits and therefore we need to reform our laws is the takeaway here.”