Epic isn’t taking down Apple’s app-store model anytime soon
This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
The Supreme Court decided to trim its docket of some cases this spring due to the pandemic, and one case that was postponed until the fall was the epic software legal battle of Oracle versus Google.
That’s the potentially explosive case in which Oracle is trying to have Google’s entire Android mobile operating system declared as one big copyright violation. The ramifications of the Supreme Court’s decision, likely due next spring, could be huge. By the way, that maybe earth-shattering legal case hit its 10th anniversary last week—Oracle filed the case on August 13, 2010.
That should temper some of the histrionics over last week’s lawsuits filed by Epic Games against Google and Apple. As you have no doubt read more than once by now, Epic contends that the two mobile giants’ control over app installations on mobile phones are a kind of 21st-century chokehold on the economy, extracting a 30% fee on developers. Epic isn’t seeking monetary damages, but rather wants to blow up the restrictive app-store model as an illegal restraint on trade. The legal argument is novel and will no doubt take the courts many years to sort out (unless the parties decide to settle).
Epic kicked off the fight with a new twist on Apple’s old “1984” ad against IBM, as Jonathan noted in Friday’s newsletter. Apple’s original spot, an attack on IBM, ended with the Orwell-referencing kicker, “You’ll see why 1984 won’t be like ‘1984.’” In the Epic retelling, the ad’s kicker is, “Join the fight to stop 2020 from becoming ‘1984.’”
The Epic case for me brought back another memory, one related to Microsoft’s antitrust troubles in the late 1990s. At the time, people worried that Microsoft might use its dominant position in Windows to take control of the Internet. They frequently cited an infamous memo by Microsoft’s then-chief technology officer Nathan Myhrvold, who didn’t reference George Orwell but instead used a term from the world of gambling and loansharking.
“Nobody gets a vig on content on the Internet today,” Myhrvold wrote, using the slang for a bookie’s fee on every bet. “The question is whether this will remain true.”
For Microsoft, there was to be no cut of all Internet commerce, but things have changed in the smartphone era. Apple and Google essentially do get a “vig” on many mobile transactions. They started small. It was almost 10 years ago when someone first noticed “the day Apple became Nathan Myhrvold.” But now it’s huge, with analysts estimating Apple having collected about $15 billion as its cut on $50 billion of app spending last year.
Still, Apple is more than ready for this fight. The app-store model may lock down developers, but it also gives consumers the peace of mind that the apps they install will work as intended, without malware or serious bugs. And the company issued a study a few months back contending that the total amount of commerce conducted on iPhones is more than $500 billion a year, if you include all the goods and services bought and sold via apps. That makes Apple’s $15 billion cut look positively puny.
Stay tuned, though. This Battle Royale is just getting started.
***
I had a great staycation that included plenty of time by the pool, rewatching the entire three-season run of Stranger Things (still holds up), and catching up on plenty of reading. If you are looking for something thought provoking, you can’t do better than my friend Eric Weiner’s new book, The Socrates Express: In Search of Life Lessons from Dead Philosophers, which comes out next week. I got a sneak peek and I think from now on I’ll be coping with challenges better thanks to Stoic philosopher Epictetus, and spending more time appreciating the little things as Japanese philosopher Sei Shonagon does.
Aaron Pressman