Editor’s note: Veteran tech attorneys Jim Verdonik and Benji Jones of Innovate Capital Law have contributed several articles to WRAL TechWire about Cary-based Epic Games’ antintrust lawsuit against Apple over restrictions governing sales via Apple’s App Store. Epic sued Google on similar grounds. Apple has made a number of adjustsments to its policies ahead of a verdict that’s expected anytime in a federal court in California.
RALEIGH – Dwight Eisenhower warned about the military/Industrial complex. We’re more concerned these days about the Big Tech/Big Government complex.
Right now, Apple seems to be like the little Dutch boy trying to hold back the North Sea by sticking his finger in the small hole in the dike.
That’s a very nice fairy tale.
In realty, we don’t think it works.
Likewise, we think Apple will find its App Store wall cracking in many places.
Apple’s recent decision to change the App Store rules fpr media reader apps may be an indication that Apple intends to delay the revenue loss by incrementally changing the App Store rules, but a year from now, I think people will be calling Epic Games the little Dutch Boy that blew up the Apple dike.
Tim Cook can’t hold back the ocean forever.
My partner Benji Jones and I written several articles about the Epic Games lawsuit against Apple. Many antitrust legal experts wondered why Epic bothered given the overwhelming legal industry opinion that Epic had a difficult case given the legal precedents interpreting US antitrust law.
In a series of articles earlier this year that Epic was probably engaging in a long term war to change the way Apple and Google do business with the apps they sell.
Our view then and now is that that Epic’s law suit was only the opening salvo in that war. The war is about public opinion.
Are Apple and Google playing fair?
If the public answers no to that question, then laws will change to force fairness.
Reading the Sept. 1 Wall Street Journal, we noticed an article that South Korea recently passed a law to promote competition in app sales. The article indicates the change to South Korea’s Telecommunications Business Act will “prevent large app-market operators from requiring the use of their in-app purchasing systems. It also bans operators from unreasonably delaying the approval of apps or deleting them from the marketplace—provisions meant to head off retaliation against app makers.”
The Journal points out that many other countries are considering similar types of laws.
This decision followed the passage of a so-called “anti-Google law” in South Korea that also impacts Apple’s practices.
The folks at Epic Games were smarter than the antitrust legal experts. They know you can win the war even if you lose the first battle in court.
On a macro level, China has put Big Tech on notice that more regulation is coming.
So, what’s the lesson for other businesses?
We’d say the lesson is that arrogance is dangerous.
Big Tech wasn’t just content to make a lot of money.
Big Tech decided it wanted to shape the world.
That is producing a huge reaction all around the world.
Our series of articles about the Epic vs Apple lawsuit predicted Apple would lose the war even if it won the court battle.
The South Korea law and the concessions in Japan are the first concrete examples.