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Epic isn’t taking down Apple’s app-store model anytime soon

August 17, 2020, 2:01 PM UTC

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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

@ampressman

aaron.pressman@fortune.com

NEWSWORTHY

The more the merrier. In other antitrust news, Germany is looking into how Amazon treats third-party sellers and Canada started a broad probe of Amazon's effect on competition. Oh, and also, President Trump says there may be more Chinese tech companies he wants to ban after TikTok and Huawei.

For whom the bell tolls. And speaking of vigs, a federal appeals court on Friday overturned some of the conditions imposed on cable giant Charter Communications when it acquired Time Warner Cable and Bright House Networks in 2016. Among the now-lifted conditions was a ban on Charter charging extra fees on online services like Netflix.

I've seen this film before and I didn't like the ending. Hundreds of employees at Pinterest signed off from their work computers on Friday as a way of protesting discrimination at the company. The move follows former chief operating officer Francoise Brougher's lawsuit last week alleging she was fired for complaining about sexist comments. Pinterest said it would "ensure an open dialogue that leads to progress."

Whatever floats your boat. The finances of independent browser developer Mozilla have been in question lately, what with the company's lucrative Google search deal set to expire this year. But now the deal, which makes Google the default search engine in the Firefox browser, has been extended until 2023 at a rate of $400 million or more per year. Huzzah.

Bumpy flight. Leading drone maker DJI is not immune to the coronavirus economy. The Chinese company has cut its sales and marketing teams as it deals with slower consumer spending on gadgets and hostility towards Chinese technology from some governments, Reuters reports. DJI said its cuts due to the pandemic were “less significant” than for other companies.

FOOD FOR THOUGHT

Apropos of my essay about the moon landing the other day, startup advisor Nicolas Carteron has penned an essay about the computers used to support the Apollo missions. And he's got a mind-blowing factoid: "We went to the moon with less computing power than a modern USB-C charger." You can check his math in his Medium post if you so choose.

IN CASE YOU MISSED IT

Why Trump’s WeChat ban scares U.S. companies more than his TikTok crackdown By Grady McGregor

Why BlackLine founder-CEO Therese Tucker—who broke some of tech’s toughest gender barriers—is stepping down By Maria Aspan

What the U.K.’s pandemic exam-results fiasco tells us about algorithms and the future By David Meyer

Warren Buffett traded Goldman Sachs for gold in Berkshire Hathaway’s newly revealed portfolio By Jen Wieczner

How artisans offer lessons for us to reshape the post-COVID economy By Rebecca Van Bergen

What a video-first economy could look like By Santi Subotovsky

Will the pandemic kill the penny? By Jeff John Roberts

 

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BEFORE YOU GO

MIT Media Lab professor Ethan Zuckerman resigned last year after learning about the school's links to Jeffrey Epstein. But the former director of the lab's Center for Civic Media didn't get around to cleaning out his office until this month. And he's written a rather geeky and hilarious goodbye essay about his time there, titled, "To the future occupants of my office at the MIT Media Lab." Have a great start to your week.