Why Epic Games Lost to Apple in Court: Three Root Causes - The Escapist

Apple, and Epic Games lost.

I’ve written about this case several times before, but for those who aren’t up to speed: Epic Games had challenged Apple’s restrictive policies that require developers to sell iPhone apps through Apple’s App Store, to use Apple Pay to pay for in-app purchases, and to pay Apple 30% of all Apple-derived revenue.

This week, I’ll break down the decision and identify some root causes for why Epic Games lost the case against Apple.

The court found that there was nothing unlawful about Apple’s rule requiring Epic (and others) to use the App Store as the exclusive distributor for iOS apps, nothing unlawful about Apple’s rule requiring developers to pay Apple 30% of all Apple-derived revenue, and nothing unlawful about Apple’s rule requiring developers to use Apple Pay for all in-app purchases.

It’s easy to say that Apple’s conduct harms competition for iPhone apps, since Apple has complete control over that market.

It’s thus no surprise that both Apple and Epic Games relied extensively on experts to support their arguments regarding market definition, market presence, and anticompetitive effects (among other issues).

And since Epic Games’ legal theories were based on the underlying facts, their factual failure contributed directly to why Epic lost the case.

For the most part, Epic assumed the court would adopt its proposed market definitions and thus did not dedicate sufficient time or effort to persuading the court that Apple’s conduct was unlawful under an alternate market definition.

In fact, the court stated this explicitly: “Ultimately, Epic Games overreached.

For one thing, the court rejected both Apple and Epic’s proposed market definition and went with a market definition of its own making.

To make matters worse, the parties were never informed of the market definition chosen by the court and so didn’t have an opportunity to introduce evidence specific to that market.

The fact that Epic Games lost control of the narrative before the case even got off the ground was bad

The fact that Epic didn’t recalibrate or attempt to change the narrative direction could easily have sealed its fate