ALL RIGHT ONCE IN OTHER NEWS
HERE IN EPIC BATTLE AND IS
PLAYING OUT TODAY IN
COURT FOR THE FIRST TIME AS
EPIC GAMES, THE MAKER OF THE
MASSIVELY SUCCESSFUL FORTNIGHT
FACES
OFF WITH THE TECH GIANT APPLE
ONE OF THE TRIAL KICKING OFF
ALMOST A YEAR.
AFTER APPLE KICKED A FORTNIGHT
OFF OF ITS APP STORE AFTER EPIC
BYPASSED APPLE'S 30% CUT
MISSION BY OFFERING ITS OWN
PAYMENT OPTIONS AND JOINING ME
NOW IS JOHN SCHWARTZ SENIOR
REPORTER AT MARKET WATCH JOHN
IS GOOD TO SEE YOU AT THIS
AFTERNOON BREAK DOWN FOR US.
THE SIGNIFICANCE OF THIS CASE
THAT DOES KICK OFF TODAY.
>> WELL IT STRETCHES ACROSS THE
ENTIRE APP INDUSTRY. I MEAN
WHAT'S AT STAKE IS NOTHING LESS
THE BILLIONS
OF DOLLARS THAT THOUSANDS 10'S
OF THOUSANDS OF LOCAL
DEVELOPERS ARE PAYING APP ON
THE APP STORE NOT TO MENTION
THE OTHER DIGITAL PLATFORMS,
THEY'RE PAYING INTO LIKE SONY
MICROSOFT AMAZON. SO IN A
SENSE, THEY'RE LOOKING AT THIS
KEENLY BECAUSE IT WOULD NEED A
LOT TO THEM FINANCIALLY
FOR APPLE. APPLE SERVICES WHICH
INCLUDES APP STORE IS ONE OF
THE BIG
CASH COWS. IT'S IT'S BECOME A
MULTI-BILLION DOLLAR INDUSTRY
NOW
THAT CELL FOR APPLE AND THEN
YOU ALSO HAVE THE FUTURE
OF EPIC. THEY SAY THAT THEY
NEEDED TO DO SOMETHING
INDEPENDENT APPLE AND THEY
TRIED TO THE LAST COUPLE YEARS
TO SET UP A DEAL WITH THEM SO
IN A SENSE. IT JUST GOES ACROSS
THE INDUSTRY.
>> SO BELIEVE IT OR NOT THOUGH
APPLE SHARES UP ALMOST ONE PER
CENT TODAY AND APPLE'S BEEN
UNDER PRESSURE AT STOCKS
CERTAINLY HAS BEEN OVER THE
PAST FEW MONTHS OR SO SO IT'S
RARE THAT WE WOULD SEE A ONE
PERCENT GAIN AT LEAST IN THE
PAST SEVERAL WEEKS OR SO SO I
WANT YOU TO WEIGH IN ON THIS
BECAUSE IT SEEMS LIKE INVESTORS
ARE SHRUGGING THIS OFF THEY
DON'T SEEM TO BE TO WRITE CERN
DO YOU THINK THERE'S REASON FOR
THAT.
>> OKAY WELL ON ONE HAND THE IF
HE SHE TALKED TO A NUMBER OF
ANTITRUST ACT BIRDS WERE THOSE
WHO FOLLOWED THIS CASE CLOSELY.
THE MAJORITY THINK APPLE IS
GOING
TO WIN. I THINK THE ONUS THE
ONUS REALLY IS ON EPIC TO
CONVINCE THIS FEDERAL JUDGE IN
OAKLAND TO LOOK AT ANTITRUST
LAW IN A DIFFERENT WAY SO THE
PRESSURE REALLY IS ON A PICK IN
AN APPLE.
JUST PROVIDED AN OPENING
STATEMENT THAT WAS A VERY VERY
POWERFUL AND PERSUASIVE IN
TERMS OF WHAT THEY'RE DOING AND
HOW IT BENEFITS
THE CONSUMER. THAT'S THAT'S ON
THE ONE SIDE SO I CAN SEE THE
SHARES BEING A PLAN AND THEY'RE
ON THE OTHER SIDE LAST WEEK THE
EUROPEAN COMMISSION CHARGED
APPLE.
RESTRICTIONS
ON DEVELOPERS AND MUSIC
STREAMING MARKET WHICH IS IN A
SENSE IS A CASE THAT'S
SPOTIFY BROUGHT ABOUT 2 YEARS
AGO THIS THE CASE OF SPOTIFY
BROUGHT THESE
FAIRLY SIMILAR. BUT EPIC IS
DOING, I KNOW THERE'S A
DIFFERENCE BETWEEN THE U.S. AND
EUROPEAN REGULATORS.
WHAT APPLE HAS TO BE CAREFUL
ABOUT IS NO MATTER WHAT THE
RESULT IS IN THIS CASE IT FEEDS
INTO
THIS NARRATIVE THAT THEY AND
OTHER BIG TECH COMPANIES ARE
MISUSING THEIR POWER TO ENRICH
HIMSELF ALL HURTING A COMP
COMPETITORS SO WE HAVE THIS
GOING ON AND WE HAD
THE HEARING. LAST WEEK LAST
MONTH BEFORE THE SENATE WHICH
AN APPLE EXECUTIVE WAS PRESSED
ABOUT THE APP STORE AND ITS
INFLUENCE.
>> WHICH IS FASCINATING BECAUSE
WE KNOW THE APP STORE THE
SERVICES SEGMENT OF APPLE'S
BUSINESS VERY MUCH A SEGMENT OF
THE FUTURE THAT THIS COMPANIES
REALLY LOOKING TO CAPITALIZE
THEY CAN END AT 30%.
>> MISSION IS A HUGE COMMISSION
AND JOHN WE'RE ALSO GOING TO
SEE CEO TIM
COOK TESTIFY, AND TAKE THIS DAY
AND IT SEEMS LIKE THERE'S NO
STRONGER VOTE OF WITH APPLE
THAN HAVING TIM COOK UP HERE ON
THE STAND. WHAT ARE YOU
EXPECTING HIM TO SAY.
>> WELL THEY'RE ACTUALLY
ALIGNING SOME OF WHAT HE WILL
SAY IN THE OPENING STATEMENT,
THEY MENTIONS THAT HE TALKED
ABOUT THIS. COOK WHO'S GOING TO
PROBABLY TESTED I 2 WEEKS FROM
NOW PROBABLY AROUND THE WEEK OF
THE 17 NEAR THE END OF THE
TRIAL. NEWS IN TO TALK
ABOUT HOW. THE COSTS FOR
CONSUMERS OF NEVER HAS NEVER
BEEN LOWER IN TURN DISTRIBUTING
APPS TO THEM HOW MUCH
MORE SECURE SURE THE SYSTEM
IS HOW APPLE HAS SPENT 10'S OF
BILLIONS OF DOLLARS TO BUILD UP
THE APP STORE WHICH IS THAT THE
SENSE CREATED COMPANIES LIKE
EPIC WHICH ON PAPERS WORTH
28 BILLION DOLLARS SO EASY TO
TALK ABOUT THAT THE GREATER
GOOD THAT APPLE HAS DONE AND
HELP BUT NEVILLE AND IT IS.
ETHICS CEO RIGHT NOW IS
TESTIFYING IS THE FIRST WITNESS
AND TIM SWEENEY BASICALLY IS
SAYING LOOK WE'RE IN THE SAME
BOAT A LOT OF OTHER DEVELOPERS
WE'RE AT THE MERCY OF THESE
HUGE CONGLOMERATES WHO WHEN
THEY SEE A PRODUCT THAT WE DO
WELL THIS SIZE THEY'RE GOING TO
OFFER COMPETING PRODUCT.
AND THEY'RE NOT CHARGING
THEMSELVES A 30% COMMISSION
THEY'RE CHARGING EVERYBODY
ELSE.
>> RIGHT I THINK THAT IS A
REALLY NOTABLE POINT
THERE JOHN. WE SEE 2 BIG
COMPANIES AT
SPOTIFY SIR ONLY IN THE EU AND
THAT HERE AT THE GAMES IN THE
U.S. AS WELL COMING AGAINST
APPLE. BUT IT DOES SEEM LIKE
IT'S THAT LITTLE SO TO SPEAK
THAT ACTUALLY DOES SUFFER THE
MOST ARE FROM THESE COMMISSIONS
ON THE APP STORE THEY'RE TRYING
TO GET THEIR APP OFF THE GROUND
THEY DON'T HAVE DEEP POCKETS
OF CASH. PRESUMABLY TO REALLY
SUPPORT THEMSELVES TALK TO US
ABOUT THE IMPORTANCE OF THE
LITTLE GUY HERE AND WHAT THIS
CASE MIGHT MEAN FOR THEM.
>> WELL IT MEANS SO MUCH TO IN
A SENSE THE LITTLE GUYS ARE
TERRIFIED OF
SPEAKING UP BECAUSE THEY
THEY'RE CONVINCED THAT APPLE
WILL TAKE SOME SORT OF PUNITIVE
DAMAGES AGAINST THEM OR IF THE
SMALLER
COMPANY THAT CAN'T SUE THIS
THEY CAN SUE APPLE, THEY DON'T
HAVE THE TIME THEY DON'T HAVE
THE RESORT. THIS IS SO WHAT
THEY'RE HOPING
BEYOND HOPE IS SPOTIFY OR A
MATCH FOR AN EPIC OR EVEN A
SMALL COMPANY LIKE BLIX WHICH
ACTUALLY MISS TAKING ON APPLE
WE GO SUIT SIMILARLY ALONG
THESE LINES BUT
THEY'RE SUCCESSFUL TO REDUCE
THE COST OF THE COMMISSION OR
TO OFFER THEM OTHER
ALTERNATIVES BEYOND THE APP
STORE.
>> NOW WHEN IT COMES TO AT THE
GAMES IS THIS A MAKE OR BREAK
CASE FOR THEM.
>> NO NO THEY JUST RAISED A
BILLION DOLLARS ARE WORTH AS I
SAID EARLIER 28 BILLION
DOLLARS. I THINK FOR THEM THEY
THEY SAY THEY'RE TRYING TO
MAKE IT STATEMENT APPLE ON THE
FLIP SIDE IS SAYING THAT, BUT I
THINK IS TRYING TO DO IS
THEY'RE TRYING TO SKIRT THE
COMMISSION
FEE BECAUSE THEY DON'T WANT TO
PAY THAT AMOUNT OF MONEY THEY
WANT TO PAY YOU.
HUNDREDS OF MILLIONS OF DOLLARS
A YEAR IN FEES THEY WANT TO
ENRICH THEMSELVES SO THEY SO
APPLE LOOKS IT ISN'T COMPLETELY
SELFISH MOTIVE FOR EPIC EPIC
ONCE PRESENT THEMSELVES,
HOWEVER, AS THE WHITE KNIGHT
FOR ALL THE SMALL DEVELOPERS.
>> DO YOU THINK THERE'S ANY
SORT OF A RULING JOHN WHEN THIS
IS ALL SAID AND DONE THAT THAT
APP
STORE FEE. WHAT PERCENTAGE THE
COMMISSION COMES DOWN FROM 30%
RIGHT MAYBE THIS THIS BUDGET
DOES RULE
IN FAVOR OBVIOUSLY OF APPLE
AGAIN SHAREHOLDERS NOT
CONCERNED ABOUT THE OUTCOME OF
THIS AT LEAST NOT TODAY.
BUT COULD WE SEE IT COME DOWN
WHAT WOULD THAT LOOK LIKE.
>> YOU KNOW THAT'S ACTUALLY
POSSIBLE AN APPLE IN THE SENSE
HAS DONE THIS THEY THEY
THEY OFFERED BETTER DEALS AND
PERCENTAGE WISE FOR SMALLER
DEVELOPERS UP TO A CERTAIN
LEVEL
OF REVENUE. SO THEY HAVE TAKEN
SOME OF THOSE STEPS TO EASE THE
PRESSURE
OFF THEMSELVES. BUT I MEAN IT
WOULD BE INTERESTING IF THE
JUDGE DECIDED FOR INSTANCE TO
HAVE SOME SORT OF TIERED
PERCENTAGE BASED ALMOST LIKE AN
INCOME TAX SCALE LIKE A SMALLER
PERCENTAGE FOR SMALLER
COMPANIES WITH
LESS REVENUE AND THEN YOU HAVE
THE 30% FOR THE TOP LEVEL
PLAYERS LIKE AN EPIC THAT THE
NEW KIND OF SCALE IT DOWN TO