Editor’s note: WRAL TechWire asked a number of Triangle area thought leaders to discuss the possible implications of Epic Games’ lawsuit against Apple and the battle over mandatory fees charged by Apple’s app store. Veteran technology focused attorney Jim Verdonik is cofounder of Innovate Capital Law.
RALEIGH – Don’t you just love taking a very public stand and being right?
On September 28, 2020, I predicted in a WRAL Techwire article that Apple might win the antitrust lawsuit Epic Games brought against Apple, but might lose the war to maintain the 30% fee it charges Apps developers for sales to Apple customers.
How can you win a legal battle, but lose a war?
Legal battles are often fought to influence business practices and public relations. That is exactly what is happening here.
In our September 28 article, we predicted: “A business alliance between Google and a broad coalition of major app developers might be the thing that brings Apple to its knees.”
I think it’s time to take a journalistic victory lap.
I believe the threat that new developers might favor Google’s Android operating system over Apple’s iOS operating system led to a preemptive strike by Apple to curt favor with new app and game developers.
WRAL Techwire reported on November 18 that Apple is reducing its fees from 30% to 15% for developers that have less than $1 million in sales.
Initially, that reduction won’t help big developers like EPIC Games, but it is the first chink in the monopolistic wall Apple has built around consumers who use Apple products. Sometimes walls are blown up in one big blast, but often they crumble bit by bit from multiple causes.
BIG TECH is on the run on multiple fronts.
The fundamental principle of antitrust law is that given the opportunity, big companies would prefer to collude with one another than compete. Theoretically, Apple and Google are competitors, because they have competing operating systems, but in fact they act like partners to help one another:
- Google charges developers the same 30% fee Apple charges (a coincidence?)
- Google pays Apple $10 Billion per year for priority placement on Apple devices Google’s search product
Why did I predict that Google might double cross its partner Apple?
I grew up in a tenement building in New York City. If I woke up and went to the dark kitchen to get a drink of water, the roaches always scrambled when I turned on the light.
These days a lot of lights are being turned on the cozy BIG TECH club. Predictably, the roaches are scrambling.
For example, Google faces its own antitrust problems in a lawsuit brought by the Justice Department and many states as we reported on October 30, 2020.
Facebook and Twitter executives are awkwardly testifying before Congress. Misspeaking in that forum risks jail time in addition to public relations nightmares.
In my October 30th article, I predicted:
“So, while the lawyers file their briefs and motions in the antitrust case against Google and the other court cases against other members of BIG TECH, don’t be surprised if Congress decides to change the antitrust rules before BIG TECH gets bigger than Congress (assuming BIG TECH isn’t already bigger than Congress).”
Each member of the BIG TECH club can choose between two courses of action:
- Band together to protect their monopoly
- Break ranks and shape the solution to their advantage
Stay tuned to WRAL Techwire for further developments in the coming story about the world battling BIG TECH’s monopolistic practices.