Tanzina Vega: Last summer, Epic Games, the maker of the wildly popular games, Fortnite, stopped paying the 30% fee to Apple on the App Store and created a way for users to bypass the App Store's payment system. Apple then kicked Epic off the App Store, claiming that this violated their guidelines. Now, Epic is suing Apple for antitrust violations in a case that started on Monday and is expected to play out over the next few weeks.

Here to tell us about what's at stake in this case and how it's likely to affect consumers is Adi Robertson, a senior reporter at The Verge who covers tech and policy. Adi, welcome to the show.

Adi Robertson: Hi

Tanzina Vega: You've been following this case pretty closely. Can you lay out the big arguments on both sides?

Adi Robertson: Yes. On Epic's side, the argument is that Apple has a monopoly over basically iOS, which is this thriving ecosystem with huge numbers of devices. Because of this, it can force developers to run through its App Store, which has its arguing stringent requirements, but it doesn't really provide that much benefit. That extends to in-app purchases, which are their own market distinct from the larger app market and take a 30% for big companies and after this lawsuit, a 15% cut for smaller apps. Outside of Epic, this is widely called the Apple Tax.

They want either, the judge to say that this in-app purchase processing system is specifically a monopoly and they should be able to use their own payment processing system. Their bigger ask is that Apple should let people load independent app stores like the Epic Games Store, which Epic is sort of trying to get off the ground. It's losing a lot of money right now, but they're hoping that it becomes a big part of their business leader. That's Epic's side of the lawsuit.

Apple's side is that, in their words, this is an assault on the iPhone. Their argument is that the reason people choose the iPhone over something like Android is that it offers this more secure, more private, more curated, and directed experience. That only happens because Apple can control exactly what goes on the App Store, that that means that people are safer from malware, that they can always expect a consistent experience. Unlike what Epic is saying, they say, "Look, we actually spend a lot of time making sure that what happens on the App Store is all on the up and up".

This is now going to court and it's delving into a really wide array of issues from what it takes to develop a web app versus an app for the App Store, just what Apple's process for getting apps into the store looks like, and for a while, the definition of a game,

Tanzina Vega: This is an anti-trust case. I think for those of us who may have learned the broad outlines of antitrust in school, you think about something like Standard Oil, which was the great big company that controlled all US oil. This is a very different thing when you talk about applying anti-trust rules to technology. How does that work?

Adi Robertson: A slightly more recently comparison is the big antitrust case against Microsoft at the turn of the 21st century, where a lot of the thing-- the big sort of thing that has changed is that a lot of products are free now, or freemiums that say Fortnite is a thing that you don't really pay for when you start the game. That also, there's this big sort of debate over right now, the standard for a monopoly, that's harmful is that there's some kind of harm for consumers, which is what there's a lot of time dedicated to proving in court. That's also come up a lot as a larger debate.

Right now the big argument is Apple is a monopoly. It is a monopoly specifically over the iOS ecosystem that it runs and that it is suppressing competitors and it's causing harm to consumers because it's running that store poorly. This is, just to be clear, controversial the idea that you have a monopoly over a single product that you own. There is precedent for it, but it is a little bit of an uphill battle for Epic.

Tanzina Vega: What's a stake for Apple here. What's their worst-case scenario.

Adi Robertson: The worst-case scenario is that Apple has to work like Android, that you should be able to sideload an app onto your iPhone the same way that you can just download something and put it on your Android phone. Right now you can do that, but it's very difficult. You have to jailbreak your phone. Apple very strongly discourages it. Apple loses control of its ecosystem. Even in the less extreme scenario that Apple doesn't get to, say, charge for in-app purchases anymore. That's a huge part of its revenue. A lot of apps, if you think about the number of big apps that are subscription-based, if suddenly Apple loses all of the people who sign up through iOS and that 30% or 15% cut that they give, that's a really huge hit to Apple's business model.

Tanzina Vega: One of the things I find interesting is how this case dovetails with Apple's marketing. Apple has really said we are the company that provides the best privacy protections for users that every app in our App Store is up to our standards. It feels to me like this case, separate and apart from the question with Epic, also strikes at the heart of how Apple sells itself.

Adi Robertson: Yes. Which is a big part of what this trial is going to be both in the court and the court of public opinion. On Apple's side, it's pointing out, "Look, we have this gigantic review apparatus. We can make sure that people have a great experience." Then Epic's going to be citing, it hasn't really come up in the trial yet, but it's going to be calling up executives to talk about what the review process looks like. It's got some testimony from earlier that there's a pretty great quote that the App Store review process is like the pretty lady who's meeting you at the airport with a lay rather than an actual security guard or that it's like bringing a butter knife to a gunfight. Those quotes are probably going to come up in court and there's going to be a very large debate over the whole security process.

Conversely, we have a little bit of discussion about how it's actually not necessarily that hard for developers to create some kind of system by which people can pay outside, that you can open up Safari and go to a website and pay a lower price for some apps than if you just go through the App Store. Apple's arguing that, "Look, okay, we obviously have a payment system that's an alternative, just go to Safari".

Tanzina Vega: Let's talk about what it means for a company to get kicked off the App Store.

Adi Robertson: Yes. Right now, if you want to have an app on the store, a native app, which is the sort of thing that you install and it stays on your phone as opposed to a web app which you'd open as a webpage, you submit a product for review to Apple. Then it reviews it against its developer guidelines, and then you put it on the store. Then after that, you have to use certain Apple processes. You have to enable Apple sign-ins under certain circumstances and you have to use a special system for processing payments through it that gives it a cut. Then Apple is going to review all the product changes after that and it might give people feedback.

The way that Epic got its payment processing system on the store was through something called a hotfix which was a sort of much smaller and less strictly examined change. They snuck it in, a thing that Apple's made a really big deal out of at the trial that they added this code and then they had a switch on their servers that they flipped a while later and turned on the system, something the Apple has called dishonest and lacking integrity and compared to cheating in Fortnite.

Tanzina Vega: This case is sort of one plank in a larger antitrust push against Apple. How would you describe the other aspects of what Apple does that people in regulators take issue with?

Adi Robertson: A lot of the fight over Apple is about the App Store and it's about varying aspects of it. There are a bunch of other app makers that are mad at Apple, and some of them have also appeared in this trial. Just the day before the trial started, the EU regulators brought a complaint on behalf of Spotify, which is complaining specifically about in-app purchase prices in the music space. There's this whole array of apps that's outside Fortnite and gaming, where there are complaints about in-app purchases or them not being able to offer specific features because they go against the developer guidelines or people not being able to get things like alternative stores.

That's come up in Congress because there's this really large push to regulate what they call Big Tech, which is basically Apple, Google, Facebook, and Amazon. They're very different antitrust cases against all of them. There has been a really big report. They're considering overhauling the rule. They're especially considering examining the consumer harm model. If Epic loses this case, there is a reasonable chance that Congress is able to spin that into, "Look, there was a really strong case and it didn't go anywhere, Antitrust law is broken".

Tanzina Vega: I think a lot of the details of this case or what different regulators are doing can be confusing for consumers, but at the end of the day, a lot of the law underpinning this is about consumer harm. How could the outcome of this case affect people who use the App Store or people who play fortnight?

Adi Robertson: The really obvious thing is that if Epic wins this case, fortnight goes back on the App Store and either goes back on the App Store or goes back on the iPhone through some other method and people [crosstalks]

Tanzina Vega: 11-year-olds across the US will be delighted.

Adi Robertson: Yes, but they have to pretend they're 13 because that's the minimum age for Fortnight. That's the really obvious proximate conclusion. If Apple really loses big, then you can expect a pretty different model for the iPhone, that you can install apps in a different way and that it's maybe easier for you to get lower prices for specific apps if they offer them without the 30% cut, without doing something like going through the website so that's maybe a little bit easier.

If you really like the App Store model, and you like that the iPhone is this very curated experience, then you might not be as happy. In a larger sense, this could have an effect on future cases with anything that's a locked-down store. If there's any other device that works too much like the App Store model, then that could change as well. It's not necessarily clear what those would be. Apple's arguing that pretty much any game console is a monopoly under Epic's claims so you would have to completely change how the Nintendo Switch and the PlayStation and the Xbox work, but that's not necessarily clear. That's the thing that they're arguing about in court.

Tanzina Vega: Do you think it's appropriate to look at this case in the context of the broader backlash against Big Tech, on behalf of consumers, or also lawmakers or is it a separate thing with two companies that are competing?

Adi Robertson: It's definitely part of a very long string of lawsuits by developers against Apple. There was a big class-action suit that went to the Supreme Court a couple of years ago from developers who are complaining about Apple's practices. Epic was able to bring this lawsuit because it could muster a lot of public participation, partly because Fortnight's super popular, they prepared this 1980 Fortnight commercial after they filed the suit that was trying to muster support.

Also that it's happening during a period where they know that they're going to get a lot of people saying this is part of a larger movement, that there are a lot of developers that they can muster to their side, that there are a lot of Congresspeople who are potentially looking at this case, and that even if Apple wins, there's going to be a really hard look at the Apple Tax.

Tanzina Vega: Adi Robertson is a senior reporter at The Verge, covers tech and policy. Thank you so much for coming on.

Adi Robertson: Yes, thank you for having me.

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