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Apple and Epic Games face-off in court over app store battle

The Yahoo Finance On The Move panel discusses the future of Apple and Google and the control they have over their app stores and whether or not their power qualifies as a monopoly.

Video Transcript

- Apple and Epic Games are taking their app store battle to court today, a US district judge expected to decide whether Apple must allow the video game maker back into their store. The judge will also determine if Apple can block third-party apps using Epic's development software. Dan Howley is tracking that story for us.

And Dan, we've seen this back and forth, back and forth. It seems like Epic Games has more momentum on their side, in terms of support and questions about the app store policies, but what specifically will this really mean in the broader debate?

DAN HOWLEY: Yeah, it really will just determine whether or not, as you said, the app will be able to appear in the app stores or not. Basically, right now, if you try to go on your iPhone and download Fortnite, you will not be able to do that. Base-- essentially, what happened was Fortnite's maker, Epic Games, had put in the ability for players to purchase in-game currency through the iPhone or through Apple's App Store using Apple's payment system, which is required, as well as a secondary offering that was run through Epic Games.

And it showed them one on top of the other. But if you used Epic Games, you got a discount on purchases. Now because they put that in-- they also did this in their Google Play Store version-- they violated the rules of both companies' app stores. You have to use their payment methods when you use their app stores. That's essentially the rule. When they did that, they were immediately pulled by Apple and Google.

So now, this will determine whether or not Epic can continue to operate in Apple Store, it can be reinstated and you can have Fortnite available, or if they can keep that ban in place, Apple, and ban other properties that use Fortnite's capabilities, or Epic Games' capabilities. So this is going to be a big case and really could determine a lot of issues, namely the power that Apple or Google have over their own app stores, but also whether or not they operate as monopolies.

This is exactly what Epic Games is getting at as far as Apple goes, in particular, saying that the 30% commission they charge for anything sold through their stores is dangerous and is hurtful to competition. And this is really something that is hurting Apple specifically because we see the other companies coming forward, like Microsoft and Facebook, to support these claims.

And then there's those investigations by the FTC, the DOJ, state attorneys general about whether or not the app store is a monopoly in itself. So this ties into all of that. And I think since those investigations really got underway, you've seen this kind of whirlpool that's sucking Apple down as far as these-- this issue goes, with more and more companies kind of helping to spin it around further and further.