At Epic Games US antitrust trial, Apple casts itself as the adult in the room

18 May 2021 7:31 pm by Michael Acton, Amy Miller

Epic v Apple

Tuxedo-wearing bananas and pornography are two subjects that have come up with surprisingly regularity at the Epic Games versus Apple antirust trial in California. That’s no accident.

Apple is depicting itself as a bulwark of high standards and good taste, putting the burden on Epic to prove how, in an alternative universe where third-party app stores are allowed, device users — especially children — won’t be put at risk.

Apple is pulling out all the stops in an effort to show that the additional layer of protection afforded by its mixture of human and software policing justifies any hypothetical monopoly it might wield — and in doing so, it is attempting to define what "security" actually means.

One of the more surreal moments of the US trial so far occurred when Apple lawyer Richard Doren presented the court with an image of a Fortnite character in the form of an anthropomorphic banana clad in a tuxedo: Agent Peely. In the interest of decorum, Doren said, he wouldn’t display the “naked” version of Agent Peely to the court as he questioned Epic’s vice president of marketing, Matthew Weissinger.

That left it to Epic's lawyer, Lauren Moskowitz, to provide a picture of the tuxless Agent Peely, an anodyne cartoon banana. She asked Wiessinger what he saw.

“It’s just a banana man,” Weissinger said.*

The following morning, US District Judge Yvonne Gonzalez Rogers quipped that she was still thinking about the banana when another witness, Apple expert Richard Schmalensee, was on the stand.

“You can see it with and without the tuxedo,” Gonzalez Rogers said.

The anecdote may seem silly, but it speaks to Apple’s core narrative in the trial. Apple is suggesting that Epic Games is seeking to lower the standards of its product by, among other things, forcing its devices to host app stores such as itch.io, which offers pornographic games. Itch.io's store is notably available within the Epic Games Store, but Epic does not allow pornography directly on its own store.

The judge will ultimately have to make a call on how important the App Store is in terms of protecting consumers — and where its mandate should end.

The 2018 Supreme Court ruling in Ohio v. American Express says courts can't look at just one side of a two-sided market when determining competitive harm. They must weigh alleged harms on one side against potentially procompetitive benefits on the other. Given the App Store's dealings with developers on one hand and app buyers on the other, the security and privacy benefits for app customers is crucial for Apple’s defense.

Enhanced security protections and quality control are procompetitive benefits that stem directly from the fees charged to app developers, according to Apple. People buy the iPhone and developers’ apps precisely because Apple pays employees to make sure the App Store is safe and secure and that all the apps work, Apple argues.

But Epic’s witnesses have told a different story. There’s no denying that Apple is working to filter the content on its store, Epic’s witnesses have testified. However, Apple’s restrictions on the App Store are not really about security and privacy, they said. Apple has made a policy decision to tightly control the App Store — a policy that is not applied perfectly or consistently by Apple, and which often lets fraudulent apps slip through its security net.

US District Judge Yvonne Gonzalez Rogers will have to make a choice. Are consumers better served by a single, tightly controlled store with policies that can, for example, offer consumers a blanket choice not to have their data tracked — as Apple moved to do last month?

Or do they need the opportunity to benefit from competition between different stores, where the quality of privacy and security and the types of content on offer are left for consumers to choose — potentially spurring more innovative security offerings?

Apple is going all-out to try to establish the superiority of its smartphone operating system to its rival, Google’s Android, which is not as tightly controlled.

After Epic IT expert James Mickens testified this week that there wasn’t a “meaningful difference” between security on Android and iOS, and that security on the App Store wouldn't suffer if third party app stores were allowed, he faced a grueling cross examination for hours from Apple attorney Jason Lo, who attempted to undermine his conclusions.

Mickens drew a distinction between the “content moderation” provided by the App Store and the “core” security functions offered by iOS and the underlying hardware.

The “core” functions are those that prevent the iPhone’s data or hardware from being actively manipulated. Content moderation, on the other hand, speaks to the “physical and mental harms” which, as Apple’s Lo suggested, users can be exposed to if they download unchecked apps. He offered the example of an app that encourages teenagers to self-harm.

Stopping hackers and fraudsters from proliferating on the App Store has been a priority since the App Store launched in 2008, App Store boss Phil Schiller testified this week.

Apple’s director of marketing, Trystan Kosmynka, said the company rejected about a third of the 7 million apps submitted for approval last year, many because of privacy guideline violations.

Meanwhile, it’s probably no coincidence that Apple published a blog post last week announcing that, last year alone, the combination of human expertise and sophisticated technology on the App Store prevented $1.5 billion in potentially fraudulent transactions.

And there have been some hints at trial that Apple’s security arguments may be landing with Gonzalez Rogers. She questioned the fact that Fortnite’s user base includes children impulse-buying digital content with their parents’ credit cards.

It’s possible, however, that Apple will regret bringing up cartoon bananas, with or without tuxedos.

Epic is pushing back in a big way. Today, Epic lawyer Katherine Forrest, cross examining Apple’s Schiller, asked him: “This is not a case about keeping sexually explicit content off the App Store, is it?”

Schiller said he wasn’t sure he agreed — prompting Forrest to rattle off a list of apps on the App Store that already offer sexual content, as well as an example of how Apple makes money off search advertising terms such as “escort.”

Suddenly, the App Store doesn't look quite as clean and proper as Apple proposes.

Forrest showed Schiller that if someone searches Instagram for "sex" and "porn" there are numerous results, including the page for PornHub.

"You know PornHub is a porn site?" she said.

"I do not know that," Schiller said.

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