Comparing Apple’s payment systems with Uber and Grab, Epic denounces monopolistic behavior in the smartphone game market

Comparing Apple’s payment systems with Uber and Grab, Epic denounces monopolistic behavior in the smartphone game market


2021-05-13 03:00:39

One of the bottlenecks of the legal battle between Epic and Apple is the alleged monopoly of the gaming market over the tech giant that makes the iPhone. While Apple repeatedly denies this claim on the grounds that it is entirely possible for developers to bring their games to other platforms, such as consoles.

Yesterday, Epic made its argument for this knot. Epic’s chief witness, David Evans, president of Global Economics Group, argued that Apple’s monopoly relates to mobile operating systems rather than a whole bunch of other platforms. He said that smartphones and game consoles are different types of markets as Android and iOS are “multi-purpose operating systems” used for many different applications, while game consoles are systems. Operator dedicated to gaming.

The testament to the difference between these two platforms is the top 50 iOS games based on downloads and revenue. Despite being the top games on iOS, most of them don’t appear on consoles. That’s why, says Mr. Evans, consoles are not “substitutes” for smartphones – or vice versa. Moreover, the cost for users to switch between these two platforms is very expensive.

Apple has an unparalleled market power for smartphone operating systems“Along with Google’s Android, these two platforms dominate 100% of smartphone operating systems from 2013 to present. Globally, except for China, the ratio of games on smartphones is usually 60% for smartphones.” iOS and 40% for Android In the US, the balance is more balanced.

Evans compared Apple’s in-app payment system to a ride-hailing app like Uber or Grab, by forcing users to pay through the app so they can collect fees instead of paying directly to the developer.

I mean, Apple has a monopoly on the iOS app distribution market” based “high and continuous rate of return“Apple in this service. These numbers are based on legal documents Apple provided to the court and only the judge of this hearing is viewed.

Comparing Apple's payment system with Uber and Grab, Epic denounces monopolistic behavior in the smartphone game market - Photo 2.

Based on that, Mr. Evans concluded “Apple’s restraint hurts competition“For developers and consumers, it leads to higher prices, slower creativity and poorer distribution capacity. There is no specific figure, but Mr. Evans said spending for R&D on Apple’s App Store “extremely low” and even lower than the R&D spending of Alibaba, eBay, Etsy, Rakuten and Mercado Libra.

Mr. Evans argues that Apple customers are locked in the company’s ecosystem without knowing the overall cost of doing so. He estimates that about 60% of iOS users only play games on smartphones. When Apple removed Fortnite from its App Store, more than 80% of Fortnite players on iOS were unable to find an alternative platform to continue playing.

Epic said that with the locking of users in its ecosystem, Apple could charge fees as high as 30% for developers, as well as make it difficult for cloud game service developers. so that they cannot compete on the platform and induce non-competitive behavior.

So far Apple has not released specific financial reports on App Store earnings, but it is clearly a major part of the company’s services division, which brings in $ 57 billion in revenue. last year.

Check out MarketWatch

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