Epic and Apple are arguing for and against a temporary restraining order before Judge Gonzalez Rogers.

“I can tell you right now I am inclined to not grant relief with respect to the games, but I am inclined to grant relief with respect to the Unreal Engine,” she says.

The companies have now begun their arguments. Turning to Epic’s lawyer, the judge says: “Your client created the situation… it doesn’t come to this with clean hands but, you know, strategically and in a calculated move, decided to breach [its contract with Apple]."

Epic’s lawyer says the company has been getting “consumer complaints every single day that users are quitting” and customer service requests for what sounds like refunds but that "we don’t control the customer service relationships with these customers” — Apple does.

Not sure how effective that argument will be given the judge already seems to agree with Apple that Epic brought this on itself.

The judge says: “This was not an insignificant breach. Hence the reason we are here.”

Oof.

Epic’s defense is that it has decided to cease "complying with an anticompetitive contract. That is the sin we committed. Did we know what we were doing? We did, Your Honor. We understood that in order to have this fight with Apple, it had to be a big fight."

Apple’s response is, it’s getting the same customer complaints Epic is — and that Epic is the one that breached the contract.

But the judge says it “looks like overreach” and “retaliatory” for Apple to try to take Epic’s breach and to use that to revoke ALL development access.

Epic says it's received reports from developers that they are “fleeing the Unreal engine now. It’s happening now, it’s not speculative."

Apple returns to its initial argument that this crisis was “manufactured by Epic to put pressure” on Apple.

The judge says to Apple that “you must concede that the revocation of the engine will have a negative impact on third parties…?"

After some back and forth, Apple’s lawyer ultimately says that hypothetically in the abstract future, developers could be harmed.

The judge says she’s contextually aware of what Microsoft president Brad Smith has said recently about Apple and app stores. Iiiiinteresting.

Whoops, correction — Smith didn’t seem to name Apple or Google when discussing app stores. https://www.politico.com/news/2020/06/18/brad-smith-microsoft-328966

This is big: Judge says there "there appears to be some measure of lack of competition… and high barriers to market entry” being raised in the case — that’s not good for Apple.

But then goes on to say that what Epic is unhappy about — the 30% cut — is common in the industry.

That was the judge’s observation at the top of the portion of the hearing devoted to considering whether Epic is **likely to succeed in the case on the merits** (which is a factor considered in issuing a temporary restraining order).

The judge is expressing deep doubts about Apple’s walled garden ecosystem.

"If you have an iphone you can't buy [apps] from anyone else. You can't. You are limited to buying it from Apple."

"I can’t buy it from Google. I can’t buy it from Amazon. There is no competition."

“And so the question is, without competition, where does that 30 percent [number] come from? Why isn’t it 10? Fifteen? Twenty?”

Then goes on to cite econ research showing walled gardens create high switching costs for consumers. And how Best Buy is a bad analogy.

Apple argues that there’s tons of competition, it just happens in the “foremarket,” that is, when consumers are choosing their preferred platform.

Dang, this judge is *saucy* — Epic’s lawyer cites an upcoming holiday when discussing the briefing schedule, and the judge says something to the effect of, “you know our e-filing system is online 24/7, right?"

All right, that’s all. My own impressions: The judge seems really irritated by Epic’s tactics but is very conscious of how Apple’s business model could be abused to reduce competition.

She warned this case will be complex and “interesting” and won’t be resolved by TRO or PI.

The judge has issued an order keeping Apple from blocking Unreal, but not letting Fortnite back onto the App Store.

Key quote: "Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders.” https://www.pacermonitor.com/view/ZAKR4IY/Epic_Games_Inc_v_Apple_Inc__candce-20-05640__0048.0.pdf?mcid=tGE3TEOA