Apple faces a difficult path ahead, with a verdict in the Epic antitrust lawsuit looming, legislation aimed at app stores, and huge software developers battling Apple at every opportunity.
Apple Inc. may receive a ruling in a key antitrust legal case before the end of the month, but that is far from the only concern.
Legal analysts predict that federal Judge Yvonne Gonzalez Rogers would rule in favor of Apple AAPL, +0.18% in its legal battle with Epic Games Inc., dismissing Epic Games’ main requests to sideload programs into the App Store and establish a third-party payment system within the digital store. Rogers, on the other hand, may sue Apple under California’s unfair competition legislation, causing legal and legislative issues in the future.
The experts predicted the outcome based on Rogers’ line of questioning during the May closing arguments. Both sides are almost certain to appeal the verdict, starting a potentially lengthy process. Apple and Epic did not respond to requests for comment.
Gonzalez Rogers’ fate is being eagerly watched by federal regulators, state legislators, and legal experts during what many believe will be an antitrust renaissance. The judge may choose to concentrate on California law since it has evolved more in recent decades in reaction to the rise of Big Tech and other corporations, whereas federal law has not, at least until current legislative attempts bear fruit.
According to Joel Mitnick, an antitrust specialist and former FTC trial lawyer, “we are at an inflection point, based on the president’s executive order on competitiveness, federal appointments, moves by European regulators, U.S. legislation and investigations, and private lawsuits.” “It’s improbable that we’ll emerge from this period without significant changes.”
While Rogers’ decision may result in a lengthy appeals process, both houses of Congress are pushing forward with antitrust legislation that will have significant implications for Apple, Alphabet Inc.’s Google GOOGL, -0.39 percent GOOG, -0.29 percent, Facebook Inc. FB, -0.32 percent, and Amazon.com Inc. AMZN, -0.86 percent. In the short term, though, Apple appears to be a significant focus, with legislation regulating app stores being filed on Wednesday, while competitors like Facebook, Tile, and Spotify Technology SPOT, -0.69 percent publicly criticize the iPhone maker.
Sens. Richard Blumenthal, D-Conn., Amy Klobuchar, and Marsha Blackburn, R-Tenn., all ardent and vocal critics of Big Tech, introduced the Open App Markets Act in the Senate on Wednesday, which aims to regulate app stores.
“This problem case] has been on our radar for a while,” Blumenthal told MarketWatch. “While the [Epic v. Apple] trial provided compelling evidence, it had no bearing on our legislation.”
Separate legislation introduced by Sen. Amy Klobuchar, D-Minn., in the Senate would push for comprehensive antitrust reform rather than the House bill’s sector-specific limits on mergers and acquisitions and dominating digital platforms with specific firms in mind. Klobuchar, who chairs the Subcommittee on Competition Policy, Antitrust, and Consumer Rights, is looking for bipartisan support for her bill, which would be added to the app store law.
Klobuchar’s spokeswoman confirmed that she is working on bills to accompany a House antitrust package aimed at reining in digital behemoths. The bill’s features would be more closely aligned with European regulatory law, transferring the burden of proof in antitrust lawsuits from the plaintiff to the defense. Klobuchar also wants to increase the FTC’s and Justice Department’s antitrust resources and employees.
Legal scholars and consumer groups argue that revisions to antitrust legislation are necessary to help mold it for the digital economy. Smaller competitors have been squeezed and innovation has been inhibited as a result of the rise of online platforms and businesses, leaving consumers with less options.
The effort for legislation reflects political and public pressure to better regulate the so-called GAFA of Big Tech — Google, Apple, Facebook, and Amazon — whose dominance has grown in the wake of the pandemic. The four firms have a combined market capitalization of roughly $7 trillion.