Apple’s claim that allowing outside payment systems is a security risk does not “survive scrutiny” as it already allows such options for physical goods and the “sky did not fall in”, the firm behind the popular game Fortnite has argued.
Monday marked the start of what is expected to be a five-month federal court trial in Epic’s case against Apple and Google alleging the two companies have engaged in anti-competitive and unconscionable conduct over the operation of their respective app stores and in-app payments systems.
Epic Games apps were kicked off the app stores globally in 2020 after the company made its own in-app payments option available in the popular game Fortnite – bypassing the fees both Apple and Google charge for in-app purchases on digital content.
Apple has argued that allowing methods to install apps on iPhones outside the App Store presents a security risk to users, and there would be an increased risk of fraud if customers were allowed to purchase digital content in apps outside Apple’s in-app payments system.
In opening submissions regarding the case against Apple, Epic Games’s barrister Neil Young said both of these justifications do not “survive scrutiny”.
For payments, Young highlighted that if someone is buying physical goods – such as food or clothing – through an app, developers can use their own payment system for payment that does not incur the charge Apple currently takes for digital purchases.
He said this was done because it suits Apple, because Apple cannot control the actual delivery of physical goods.
“There’s also going to be evidence … digital purchases were a soft target for Apple because those have negligible marginal costs, and [high revenue]. [It is] a matter of convenience that they used their market power to target in-app purchases for digital content, but not for physical goods and services.”
He also said there were many exceptions to the restrictions on in-app payments, including allowing people to consume content bought outside an app within an app, provided that a user is also allowed to buy that content in the app, using Apple’s payment system.
On app installation, Young pointed to Apple’s operating system for its desktop and laptop range MacOS, which allows people to directly install software from the internet without going through the app store.
He said Apple deploys a number of security protections, including gatekeeper technology to check downloads for known malware.
Justice Jonathan Beach questioned why, if security was the paramount concern, it would allow downloads on laptops but not phones.
“The same security measures could be applied in circumstances where alternative distribution sources are available,” Young said.
“The sky did not fall in because alternative distribution channels were available on MacOS.”
Young said Epic had predicted the development of the in-app payment system in Fortnite would have led the company to be kicked off the stores, and it resulted in Epic challenging the legality of the regimes.
Epic won its case against Google in the United States, but lost the case against Apple.
Young said Epic in Australia was not seeking damages – instead it was seeking to force the two companies to change the way they operate for every developer, not just Epic.
“Epic for its part has been motivated to produce system-wide changes that will benefit all developers.”
The courtroom was packed with dozens of lawyers, as well as the Epic Games CEO, Tim Sweeney, who is expected to give evidence in the coming weeks.
Epic’s barristers will on Tuesday outline the gaming platform’s case against Google in the continuation of opening submissions. The court is expected to hear opening submissions for the first two weeks of the 16-week case.
