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Apple argues it faces competition in video game market as 'Fortnite' trial nears

04/08/2021 | 06:17pm EDT
FILE PHOTO: 3D printed Lady Justice figure is seen in front of displayed Apple and Epic Games logos in this illustration photo

(Reuters) -Apple Inc plans to argue that it faces abundant competition in the market for video game transactions to defend itself against antitrust allegations by "Fortnite" maker Epic Games, the iPhone maker said on Thursday.

In a federal trial scheduled to begin May 3, the companies will fight over whether Apple's 15% to 30% commissions for use of its in-app payment systems, and its longstanding practice of exercising control over which apps users can install, amount to anticompetitive behavior.

Epic and Apple filed dueling position statements with the court on Thursday in preparation for the trial in Oakland, California.

Epic in its filing contended iPhones, with more than 1 billion users, represent their own distinct market for software developers. Epic has argued that Apple has monopoly power over that market because it decides how users can install software on the devices and says it abuses that power by forcing developers to deliver their software through the App Store, where developers are subject to fees on some transactions.

Apple rejected that notion in its filing and said the proper market to analyze the case is the broader video game transaction field, which includes platforms such as Nintendo Co Ltd and Microsoft Corp's Xbox gaming consoles, which also limit the software that can run on their hardware and charge fees to developers.

Apple says consumers have choices in carrying out video game transactions, including purchasing virtual tokens from game developers on other platforms such as Windows PCs and using the tokens on iPhones with no fees to the developer.

U.S. District Judge Yvonne Gonzalez Rogers will have to rule on which notion of a "market" is the correct one for analyzing Apple's moves for signs of anticompetitive conduct.

The court case began last year after Epic tried to implement its own in-app payment system in the popular "Fortnite" game and Apple subsequently banned the game from its App Store.

(Reporting by Stephen Nellis and Paresh Dave; Editing by Leslie Adler and Grant McCool)

By Stephen Nellis and Paresh Dave


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ADLER GROUP S.A. -1.61% 23.26 Delayed Quote.-19.79%
MICROSOFT CORPORATION 1.03% 255.85 Delayed Quote.13.86%
NINTENDO CO., LTD. 0.14% 64850 End-of-day quote.-1.49%
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