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Epic Games accuses Apple of being greedy

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Epic Games, in the course of its lawsuit against Apple, is accusing the iPhone maker of being particularly greedy. According to The Verge, expert Eric Barns said that Apple allegedly had an App Store operating margin of 77.8% in 2019 against 74.9% in 2018.

Barns rejected claims by Apple’s witness that profit could not be calculated by pointing to information from the company’s corporate financial planning and analysis group as evidence.

Unsurprisingly, Apple denies the allegations and told The Verge that the margin calculations are “simply” wrong and that it planned to fight the charges at trial. The company’s own witness, Richard Schmalensee, said that Barns was focusing only on one element of the iOS ecosystem, which distorted the apparent operating margin.

Epic Games accuses Apple of being greedy

The actual number was “normal,” he said, adding that you could not study the App Store’s profit without looking into the wider context of devices and services. The company does not calculate profits and losses based on products and services, said Schmalensee.

There is no guarantee that the Court will accept Barns’ opinion. Apple’s gross profit margin has normally been high relative to most of the industry, but never so high – it was 42.5% during the last winter quarter. Apple also tends to portray the App Store as a way to boost hardware sales, rather than a money generator in its own right.

The testimony, however, already explains how the epic will follow its case against Apple when the legal battle begins on May 3. The creator of Fortnite does not only want to see Apple as anti-competitive, but also abusing its block on the distribution of iOS applications to reap massive profits.

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