"More than half of internet traffic comes through mobile phones, whose users rely on mobile applications to access online content and services -- and the vast majority of mobile apps are downloaded from either Apple's App Store or Google's Play Store," the senators wrote. "Apple's power over the cost, distribution, and availability of mobile applications on the Apple devices used by millions of consumers raises serious competition issues that are of interest to the Subcommittee, consumers, and app developers. A full and fair examination of these issues before the Subcommittee requires Apple's participation."
During the Senate hearing, lawyers from Spotify, Match and Tile claimed that steps taken by Apple had undercut their competitive status while at the same time charging them millions of dollars in App Store fees annually.
"Apple abuses its dominant position to insulate itself from competition," Horacio Gutierrez, head of global affairs and chief legal officer of Spotify, testified. "We have been successful despite Apple's anticompetitive behavior."
As Apple and Epic lawyers furiously filed documents in the days leading to the trial, regulators in Europe were reportedly about to charge Apple with anticompetitive behavior for the first time ( ). The charges stem from Spotify's SPOT (#phrase-company?ref=COMPANY%7CSPOT;onlineSignificance=passing-mention) complaint in March 2019 that Apple abused its control over which apps appear in the App Store to restrict competition against its Apple Music service. A crucial element of Spotify's allegation is that Apple's 30% fee made it difficult for Apple Music rivals to market themselves.
The historical impact of Apple-Epic trial
In the pantheon of technology-industry legal cases, only a few are as significant as Apple v. Epic.
Perhaps the most consequential was just resolved. In April, Google prevailed in the Supreme Court, in a 6-2 decision, in its decade-long tussle with Oracle Corp. (ORCL) over software development.
For more:Oracle takes strike three in Google legal battle, but the game will likely continue for software developers ()
Nearly two decades ago, a chancery judge in Wilmington, Del., ruled in favor of then--Hewlett-Packard Co.'s $25 billion merger with Compaq Computer Corp. in 2002. The company subsequently was split into HP Inc. (HPQ) and Hewlett Packard Enterprise Co. (HPE).
Yet the closest parallel to the Apple-Epic case is Microsoft Corp.'s (MSFT) face-off with the Justice Department in the 1990s over how the software giant tied its fledgling internet browser to its dominant Windows operating system. Netscape Communications, a far smaller company whose browser had been the industry leader, took a position similar to Epic's, and the resulting case led to restraints on Microsoft's outsize ambitions that opened up adjacent markets for the likes of Google and Facebook Inc. (FB).
More on the Microsoft case and its effects:Big Tech was built by the same type of antitrust actions that could now tear it down ()
Where Apple v. Epic lands on the historical timeline depends on the outcome, which will resonate from Silicon Valley to the Beltway. "The importance of the lawsuit simply comes down to its result," Volach said, with a sigh of apparent exasperation. "If Apple loses it, it is hugely significant for generations to come. If it wins, it's business as usual."
The onus will be on Epic to make the case that Apple enjoys monopoly status in a fragmented smartphone market, said Dan Wang, an associate professor of management at Columbia University.
"It will be hard to prove with the platforms of Android and Samsung," Wang told MarketWatch.
-Jon Swartz; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
May 01, 2021 10:58 ET (14:58 GMT)
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