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THE APP STORE FREE TRIAL

pay an up-front fee to gain access to one of Fortnite’s game modes.

Epic Games has nine sources of revenue for Fortnite.

“For instance, in 2019, Unreal Engine generated about $97 million in revenue for Epic International, which enjoys a 100 percent gross margin on its “engine business.”

Epic’s Unreal Engine is insanely profitable, at least in terms of margin.

There is no dispute in the record that developers like Epic Games have benefited from Apple’s development and cultivation of the iOS ecosystem, including its devices and underlying software.” “Both Apple and third-party developers like Epic Games have symbiotically benefited from the ever-increasing innovation and growth in the iOS ecosystem.

Apps (and games) benefit from the App Store model.

Evidence supports the argument that consumers value these attributes.” “Apple justifies this control primarily in the name of consumer privacy, security, as well as monetization of its intellectual property.

People do value the privacy and security of the App Store model.

When coupled with Apple’s incipient antitrust violations, these anti-steering provisions are anticompetitive and a nationwide remedy to eliminate those provisions is warranted.” The Court concludes that Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice.

THE APP STORE FREE TRIAL

“Nonetheless, the trial did show that Apple is engaging in anticompetitive conduct under California’s competition laws.

Apple has acted in anticompetitive ways, and not just in California.

While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct. “Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. “Over 98% of Apple’s in-app purchase revenue came from games in 2018 to 2019.” Almost all in-app purchases happen in games.By contrast, over 80% of all consumer accounts generate virtually no revenue, as 80% of all apps on the App Store are free.” These gaming-app consumers are primarily making in-app purchases which is the focus of Epic Games’ claims. This 70% of revenue is generated by less than 10% of all App Store consumers. “Generally speaking, on a revenue basis, gaming apps account for approximately 70% of all App Store revenues. Games account for 70% of all App Store revenues.The mobile gaming market itself is a $100 billion industry.”

“Ultimately, after evaluating the trial evidence, the Court finds that the relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store. Apple’s not a monopoly, as Epic claimed, because the space is not just mobile games on iOS, but it also doesn’t compete in the overall total video gaming industry, as Apple claimed. Neither Apple nor Epic defined the App Store market space accurately.