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Epic Games v. Apple: Anti-Steering Policies – The Esports Observer

On Tuesday Epic Games called two expert witnesses to testify that Apple has a monopoly through a combination of rules that lock developers within its marketplace ecosystem on the seventh day of its antitrust lawsuit against the iPhone and iPad maker. 

Stanford Professor Susan Athey and Global Economics Group Chairman David Evans gave testimony Tuesday explaining why Apple has a monopoly and wields its market power to quell competition. Part of that power is enabled by anti-steering policies. 

Both experts referred to rules put in place by Apple that restrict app developers from redirecting users outside of the Apple ecosystem using emails tied to accounts or through website links. In the case of Fortnite, Epic tried to redirect users to buy V-Bucks (in-game currency) in the iOS app directly from the company.

These rules do not preclude Epic or other developers from allowing purchases via the web on iOS devices through a browser, but getting the message to users and making the process less clumsy and potentially confusing for users is difficult, in Epic’s opinion.

Anti-steering rules certainly aren’t exclusive to the Apple App Store. Walled garden marketplaces and e-commerce platforms such as Steam, eBay, Xbox Marketplace, Etsy, PlayStation Store, etc., typically don’t allow sellers to advertise alternate means to buy items or services outside of their respective ecosystems directly to customers.

In testimony Tuesday, both Evans and Athey acknowledged that if Apple eliminated anti-steering policies it would lessen Apple’s market power, at least in the short term.

Responding to a question from Judge Yvonne Gonzalez Rogers about what would happen if those rules were removed,  Evans said that it “wouldn’t eliminate the market power that Apple has here, but it would certainly diminish it.” Athey also acknowledged that it would be beneficial for app developers if they could “alert people to the most efficient way to pay.”

Apple’s anti-steering policy was highlighted in an April 30 “statement of objections” from European Commission Executive Vice-President Margrethe Vestager, concerning Apple’s rules for music streaming providers such as Spotify. 

In a section on the practice, Vestager wrote that anti-steering rules “limit the ability of app developers to inform iPhone or iPad users of alternative, cheaper subscriptions available elsewhere,” and that some music providers simply forgo the subscription model altogether to avoid paying the 30% commission, which eliminates the benefits of a premium service such as the ability to skip songs and avoid ads in Spotify’s case. 

Further, anti-steering provisions make it so that app developers can not mention their websites or  link to them in their own apps and they are not allowed to send emails to account holders on iOS “to inform them about cheaper alternatives.”

Athey will continue her testimony on Wednesday.

 

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