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OT - Apple's app store goes on trial in threat to 'walled garden'

edited May 3 in Off-topic

https://www.cp24.com/world/apple-s-app-store-goes-on-trial-in-threat-to-walled-garden-1.5411130

SAN RAMON, Calif. - On Monday, Apple faces one of its most serious legal threats in recent years: A trial that threatens to upend its iron control over its app store, which brings in billions of dollars each year while feeding more than 1.6 billion iPhones, iPads, and other devices.

The federal court case is being brought by Epic Games, maker of the popular video game Fortnite. Epic wants to topple the so-called “walled garden” of the app store, which Apple started building 13 years ago as part of a strategy masterminded by co-founder Steve Jobs.

Epic charges that Apple has transformed a once-tiny digital storefront into an illegal monopoly that squeezes mobile apps for a significant slice of their earnings. Apple takes a commission of 15% to 30% on purchases made within apps, including everything from digital items in games to subscriptions. Apple denies Epic's charge.

Apple's highly successful formula has helped turn the iPhone maker into one of the world's most profitable companies, one with a market value that now tops $2.2 trillion.
Privately held Epic is puny by comparison, with an estimated market value of $30 billion. Its aspirations to get bigger hinge in part on its plan to offer an alternative app store on the iPhone. The North Carolina company also wants to break free of Apple's commissions. Epic says it forked over hundreds of millions of dollars to Apple before Fortnite was expelled from its app store last August, after Epic added a payment system that bypassed Apple.

Epic then sued Apple, prompting a courtroom drama that could shed new light on Apple's management of its app store. Both Apple CEO Tim Cook and Epic CEO Tim Sweeney will testify in a Oakland, California federal courtroom that will be set up to allow for social distancing and will require masks at all times.

Neither side wanted a jury trial, leaving the decision to U.S. District Judge Yvonne Gonzalez Rogers, who already seems to know her ruling will probably be appealed, given the stakes in the case.
Much of the evidence will revolve around arcane but crucial arguments about market definitions.
Epic contends the iPhone has become so ingrained in society that the device and its ecosystem have turned into a monopoly Apple can exploit to unfairly enrich itself and thwart competition.
Apple claims it faces significant competition from various alternatives to video games on iPhones. For instance, it points out that about 2 billion other smartphones don't run iPhone software or work with its app store - primarily those relying on Google's Android system. Epic has filed a separate case against Google, accusing it of illegally gouging apps through its own app store for Android devices.

Apple will also depict Epic as a desperate company hungry for sources of revenue beyond the aging Fortnite. It claims Epic merely wants to freeload off an iPhone ecosystem in which Apple has invested more than $100 billion over the past 15 years.

Estimates of Apple's app store revenue range from $15 billion to $18 billion annually. Apple disputes those estimates, although it hasn't publicly disclosed its own figures. Instead, it has emphasized that it doesn't collect a cent from 85% of the apps in its store.

The commissions it pockets, Apple says, are a reasonable way for the company to recoup its investment while financing an app review process it calls essential to preserving the security of apps and their users. About 40% of the roughly 100,000 apps submitted for review each week are rejected for some sort of problem, according to Kyle Andeer, Apple's chief compliance officer.

Epic will try to prove that Apple uses the security issue to disguise its true motivation - maintaining a monopoly that wrings more profits from app makers who can't afford not to be available on the iPhone.

But the smaller company may face an uphill battle. Last fall, the judge expressed some skepticism in court before denying Epic's request to reinstate Fortnite on Apple's app store pending the outcome of the trial. At that time, Gonzalez Rogers asserted that Epic's claims were “at the frontier edges of antitrust law.”

The trial is expected to last most of May, with a decision to come in the ensuing weeks.

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Comments

  • Very very interesting

  • I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

  • https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2061

    The European Commission has informed Apple of its preliminary view that it distorted competition in the music streaming market as it abused its dominant position for the distribution of music streaming apps through its App Store. The Commission takes issue with the mandatory use of Apple's own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple's App Store. The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.

  • @NeuM said:
    I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

    Yah I would be surprised by a win for sure but sometimes cases like these are interesting in that they do shine a light on other issues that should maybe be addressed. It can help the little guy. Apple lowering their cut for smaller devs apparently was not simply out of the goodness of their heart and people speculate it was due to general legal pressures. Anywho, the idea of a device becoming so ubiquitous that one day that it becomes like a utility is an interesting thought. In the US iPhones are apparently around 50% of the market which is way more than I thought.

  • @AudioGus said:

    @NeuM said:
    I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

    Yah I would be surprised by a win for sure but sometimes cases like these are interesting in that they do shine a light on other issues that should maybe be addressed. It can help the little guy. Apple lowering their cut for smaller devs apparently was not simply out of the goodness of their heart and people speculate it was due to general legal pressures. Anywho, the idea of a device becoming so ubiquitous that one day that it becomes like a utility is an interesting thought. In the US iPhones are apparently around 50% of the market which is way more than I thought.

    Globally, Android has 71.93% of the market. The problem for Android is iOS makes the lion’s share of the profits.

    https://www.statista.com/statistics/272698/global-market-share-held-by-mobile-operating-systems-since-2009/

  • edited May 3

    Good for Epic. Have your voice heard but...you finna hold this....L.

    Not a chance in hell they win.

  • Epic doesn't need to win this case. It raises the issue to regulators all over the world. There are many cases coming.

  • edited May 3

    @NeuM said:

    @AudioGus said:

    @NeuM said:
    I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

    Yah I would be surprised by a win for sure but sometimes cases like these are interesting in that they do shine a light on other issues that should maybe be addressed. It can help the little guy. Apple lowering their cut for smaller devs apparently was not simply out of the goodness of their heart and people speculate it was due to general legal pressures. Anywho, the idea of a device becoming so ubiquitous that one day that it becomes like a utility is an interesting thought. In the US iPhones are apparently around 50% of the market which is way more than I thought.

    Globally, Android has 71.93% of the market. The problem for Android is iOS makes the lion’s share of the profits.

    Yah it really does set the financial precedence for ye olde walled gardens.

    In terms of this case it is probably only relevant to US monopoly laws. I image global stats likely don’t play any effect.

  • About 40% of the roughly 100,000 apps submitted for review each week are rejected for some sort of problem

    Woa. 100k per week?

  • Estimates of Apple's app store revenue range from $15 billion to $18 billion annually. Apple disputes those estimates, although it hasn't publicly disclosed its own figures.

    Even if you cut the “disputed” estimates in half... Woa.

  • edited May 3

    @syrupcore said:

    About 40% of the roughly 100,000 apps submitted for review each week are rejected for some sort of problem

    Woa. 100k per week?

    A lot of the time they are for very seemingly minor things in updates.

  • @AudioGus said:

    @syrupcore said:

    About 40% of the roughly 100,000 apps submitted for review each week are rejected for some sort of problem

    Woa. 100k per week?

    A lot of the time they are for very seemingly minor things in updates.

    It's about 3/4 of the submissions I've made are rejected. I've never made a single change to any submission to get approval in the end.

  • @NeonSilicon said:
    Epic doesn't need to win this case. It raises the issue to regulators all over the world. There are many cases coming.

    That wouldn’t benefit them. They are waging a legal battle they are going to lose.

  • @AudioGus said:

    @NeuM said:

    @AudioGus said:

    @NeuM said:
    I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

    Yah I would be surprised by a win for sure but sometimes cases like these are interesting in that they do shine a light on other issues that should maybe be addressed. It can help the little guy. Apple lowering their cut for smaller devs apparently was not simply out of the goodness of their heart and people speculate it was due to general legal pressures. Anywho, the idea of a device becoming so ubiquitous that one day that it becomes like a utility is an interesting thought. In the US iPhones are apparently around 50% of the market which is way more than I thought.

    Globally, Android has 71.93% of the market. The problem for Android is iOS makes the lion’s share of the profits.

    Yah it really does set the financial precedence for ye olde walled gardens.

    In terms of this case it is probably only relevant to US monopoly laws. I image global stats likely don’t play any effect.

    Since Apple has no monopoly in the US, it doesn’t apply.

  • @NeuM said:

    @NeonSilicon said:
    Epic doesn't need to win this case. It raises the issue to regulators all over the world. There are many cases coming.

    That wouldn’t benefit them. They are waging a legal battle they are going to lose.

    If they lose this case and the regulators still force Apple to open the iPhone to 3rd party stores, then Epic wins. This seems to be the actual strategy. This particular case is only one small part of a bigger campaign.

    @NeuM said:

    @AudioGus said:

    @NeuM said:

    @AudioGus said:

    @NeuM said:
    I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

    Yah I would be surprised by a win for sure but sometimes cases like these are interesting in that they do shine a light on other issues that should maybe be addressed. It can help the little guy. Apple lowering their cut for smaller devs apparently was not simply out of the goodness of their heart and people speculate it was due to general legal pressures. Anywho, the idea of a device becoming so ubiquitous that one day that it becomes like a utility is an interesting thought. In the US iPhones are apparently around 50% of the market which is way more than I thought.

    Globally, Android has 71.93% of the market. The problem for Android is iOS makes the lion’s share of the profits.

    Yah it really does set the financial precedence for ye olde walled gardens.

    In terms of this case it is probably only relevant to US monopoly laws. I image global stats likely don’t play any effect.

    Since Apple has no monopoly in the US, it doesn’t apply.

    No monopoly is needed to be found to be anti-competitive. The regulators around the world have been hinting that they feel big tech has too much control of the market. Epic, Spotify, and many other companies sense this. The complaints from many companies are mounting. This is going to take several years to play out, but I really think that Apple is going to have to give some ground to avoid being forced to open everything.

  • edited May 3

    @NeonSilicon said:

    @NeuM said:

    @NeonSilicon said:
    Epic doesn't need to win this case. It raises the issue to regulators all over the world. There are many cases coming.

    That wouldn’t benefit them. They are waging a legal battle they are going to lose.

    If they lose this case and the regulators still force Apple to open the iPhone to 3rd party stores, then Epic wins. This seems to be the actual strategy. This particular case is only one small part of a bigger campaign.

    @NeuM said:

    @AudioGus said:

    @NeuM said:

    @AudioGus said:

    @NeuM said:
    I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

    Yah I would be surprised by a win for sure but sometimes cases like these are interesting in that they do shine a light on other issues that should maybe be addressed. It can help the little guy. Apple lowering their cut for smaller devs apparently was not simply out of the goodness of their heart and people speculate it was due to general legal pressures. Anywho, the idea of a device becoming so ubiquitous that one day that it becomes like a utility is an interesting thought. In the US iPhones are apparently around 50% of the market which is way more than I thought.

    Globally, Android has 71.93% of the market. The problem for Android is iOS makes the lion’s share of the profits.

    Yah it really does set the financial precedence for ye olde walled gardens.

    In terms of this case it is probably only relevant to US monopoly laws. I image global stats likely don’t play any effect.

    Since Apple has no monopoly in the US, it doesn’t apply.

    No monopoly is needed to be found to be anti-competitive. The regulators around the world have been hinting that they feel big tech has too much control of the market. Epic, Spotify, and many other companies sense this. The complaints from many companies are mounting. This is going to take several years to play out, but I really think that Apple is going to have to give some ground to avoid being forced to open everything.

    Apple could easily let people install whatever they want on their phones, but doing so should immediately void the warranty.

    And what Epic is looking for is a free ride, not “justice for the little guy” or whatever nonsense they’ve been saying.

  • @NeuM said:

    @NeonSilicon said:

    @NeuM said:

    @NeonSilicon said:
    Epic doesn't need to win this case. It raises the issue to regulators all over the world. There are many cases coming.

    That wouldn’t benefit them. They are waging a legal battle they are going to lose.

    If they lose this case and the regulators still force Apple to open the iPhone to 3rd party stores, then Epic wins. This seems to be the actual strategy. This particular case is only one small part of a bigger campaign.

    @NeuM said:

    @AudioGus said:

    @NeuM said:

    @AudioGus said:

    @NeuM said:
    I don’t see a win in the cards for Epic. This fundamentally comes down to a business has the right to control its own platform, just like a store has the right to control their inventory. Epic is a troll.

    Yah I would be surprised by a win for sure but sometimes cases like these are interesting in that they do shine a light on other issues that should maybe be addressed. It can help the little guy. Apple lowering their cut for smaller devs apparently was not simply out of the goodness of their heart and people speculate it was due to general legal pressures. Anywho, the idea of a device becoming so ubiquitous that one day that it becomes like a utility is an interesting thought. In the US iPhones are apparently around 50% of the market which is way more than I thought.

    Globally, Android has 71.93% of the market. The problem for Android is iOS makes the lion’s share of the profits.

    Yah it really does set the financial precedence for ye olde walled gardens.

    In terms of this case it is probably only relevant to US monopoly laws. I image global stats likely don’t play any effect.

    Since Apple has no monopoly in the US, it doesn’t apply.

    No monopoly is needed to be found to be anti-competitive. The regulators around the world have been hinting that they feel big tech has too much control of the market. Epic, Spotify, and many other companies sense this. The complaints from many companies are mounting. This is going to take several years to play out, but I really think that Apple is going to have to give some ground to avoid being forced to open everything.

    Apple could easily let people install whatever they want on their phones, but doing so should immediately void the warranty.

    That would run counter to consumer protection laws almost everywhere.

    And what Epic is looking for is a free ride, not “justice for the little guy” or whatever nonsense they’ve been saying.

    Spotify just wants the ability to tell their customers that they can subscribe outside of the App Store. I don't much care for Epic as far as it goes, but I don't think they are looking for a free ride. They don't want to be on Apple's store for free. They want to have the ability to sell products that can be used on iPhones just like they can sell products that can be used on Macs.

    My guess is that in the end, all of the exclusive stores are going to be hit by legislation.

  • I’ll wonder how long it will take until other ‘Pay2Win’ game developers will start yawning?

    Fortnite is a imvho a shitty game that breeds on players buying in-game tokens to improve thier ‘character’ just like many other pay2win games do.

    The best Apple could do is to buy Epic to silence their yawning and be done with it…
    (Gameloft is another company I’ve totally lost respect for due to excessive pay2win, never paid any real money and never will, there’s enough ads already and ads will NOT go away even when paying as the ads are used to ‘boost’ the token rewards).

    Oh well, as long as the ‘addicted players’ keep on putting real money into the games this circus will continue, it’s very close to pushing chemical substances but without any physical goods…

  • edited May 3

    @Samu said:
    I’ll wonder how long it will take until other ‘Pay2Win’ game developers will start yawning?

    Fortnite is a imvho a shitty game that breeds on players buying in-game tokens to improve thier ‘character’ just like many other pay2win games do.

    The best Apple could do is to buy Epic to silence their yawning and be done with it…
    (Gameloft is another company I’ve totally lost respect for due to excessive pay2win, never paid any real money and never will, there’s enough ads already and ads will NOT go away even when paying as the ads are used to ‘boost’ the token rewards).

    Oh well, as long as the ‘addicted players’ keep on putting real money into the games this circus will continue, it’s very close to pushing chemical substances but without any physical goods…

    I haven't played it but from what I am told Fortnite isn’t pay to win in that the purchasables are intended to be cosmetic. Occsasionaly a skin comes out that may give a visual advantage in the eyes of some but when you have a variety of backgrounds and a variety of characters that is inevitable. But yah, I do not think it is in line with more blatant shit holes like Scam of Clans etc that you are probably referring to. Any ‘pay to win’ that happens in Fortnite sounds like it is unintended stuff that gets exploited. I think part of it’s success is that it is intended to be a skills based game like League of Legends.

    https://arstechnica.com/gaming/2021/04/how-cosmetic-dlc-became-pay-to-win-camouflage-in-some-online-shooters/

  • Hehe, could you not paste this in 99% of our threads here?

  • @AudioGus said:

    Hehe, could you not paste this in 99% of our threads here?

    Fair point!

  • @ervin said:

    @AudioGus said:

    Hehe, could you not paste this in 99% of our threads here?

    Fair point!

    Waaah, my midi went broke broke...

  • @Samu said:
    I’ll wonder how long it will take until other ‘Pay2Win’ game developers will start yawning?

    Fortnite is a imvho a shitty game that breeds on players buying in-game tokens to improve thier ‘character’ just like many other pay2win games do.

    The best Apple could do is to buy Epic to silence their yawning and be done with it…
    (Gameloft is another company I’ve totally lost respect for due to excessive pay2win, never paid any real money and never will, there’s enough ads already and ads will NOT go away even when paying as the ads are used to ‘boost’ the token rewards).

    Oh well, as long as the ‘addicted players’ keep on putting real money into the games this circus will continue, it’s very close to pushing chemical substances but without any physical goods…

    Those Pay2Win games are so predatory. It basically is just a drug cos they exploit gambling addictions and it’s crazy there don’t seem to be any regulations on them. Its no different than going to a casino and burning your money to me

  • @Fingolfinzz said:

    @Samu said:
    I’ll wonder how long it will take until other ‘Pay2Win’ game developers will start yawning?

    Fortnite is a imvho a shitty game that breeds on players buying in-game tokens to improve thier ‘character’ just like many other pay2win games do.

    The best Apple could do is to buy Epic to silence their yawning and be done with it…
    (Gameloft is another company I’ve totally lost respect for due to excessive pay2win, never paid any real money and never will, there’s enough ads already and ads will NOT go away even when paying as the ads are used to ‘boost’ the token rewards).

    Oh well, as long as the ‘addicted players’ keep on putting real money into the games this circus will continue, it’s very close to pushing chemical substances but without any physical goods…

    Those Pay2Win games are so predatory. It basically is just a drug cos they exploit gambling addictions and it’s crazy there don’t seem to be any regulations on them. Its no different than going to a casino and burning your money to me

    GTA even has casinos in the game where you can gamble your in-game money that was bought with real world money.

  • edited May 3

    @Fingolfinzz said:

    @Samu said:
    I’ll wonder how long it will take until other ‘Pay2Win’ game developers will start yawning?

    Fortnite is a imvho a shitty game that breeds on players buying in-game tokens to improve thier ‘character’ just like many other pay2win games do.

    The best Apple could do is to buy Epic to silence their yawning and be done with it…
    (Gameloft is another company I’ve totally lost respect for due to excessive pay2win, never paid any real money and never will, there’s enough ads already and ads will NOT go away even when paying as the ads are used to ‘boost’ the token rewards).

    Oh well, as long as the ‘addicted players’ keep on putting real money into the games this circus will continue, it’s very close to pushing chemical substances but without any physical goods…

    Those Pay2Win games are so predatory. It basically is just a drug cos they exploit gambling addictions and it’s crazy there don’t seem to be any regulations on them. Its no different than going to a casino and burning your money to me

    Yah they are horrible. But just because a game is bright, popular and free doesn't mean it uses the pay to win model. Some games that superficially resemble them are designed from the ground up as reactions to people liking the aesthetic and tone but hating the scam side so a lot of successful free to play games now steer very clear of those tactics.

    And also there are regulations now regarding free to play games and drop boxes etc. In some regions the odds of winning need to be posted. (Like anything to do with pop culture tech there is always fast evolution.) I think South Park helped with a lot of that. ;)

  • edited May 3

    If you don’t agree to the terms, don’t use a platform!

    Just a disgruntled company whose app was pulled from the store for trying to bypass the Apple’s payment system and thereby breaching the terms. Why would any platform allow a vendor to sell products using his own payment system through the app? Freeloading, that is. Someone did not read the terms fully. A platform like AppStore that cost literally BILLIONS to build ain’t free. Pay up! Epic couldn’t even do what Netflix or Udemy are doing with payments outside the app.

    EPIC Fail !

  • edited May 3

    @MobileMusic said:
    If you don’t agree to the terms, don’t use a platform!

    Just a disgruntled company whose app was pulled from the store for trying to bypass the Apple’s payment system and thereby breaching the terms. Why would any platform allow a vendor to sell products using his own payment system through the app? Freeloading, that is. Someone did not read the terms fully. A platform like AppStore ain’t free. Epic couldn’t even do what Netflix or Udemy are doing with payments outside the app.

    EPIC Fail !

    That is certainly one way to look at it. Part of me thinks it could in some way just be to save face with their users.

  • @MobileMusic said:
    If you don’t agree to the terms, don’t use a platform!

    Just a disgruntled company whose app was pulled from the store for trying to bypass the Apple’s payment system and thereby breaching the terms. Why would any platform allow a vendor to sell products using his own payment system through the app? Freeloading, that is. Someone did not read the terms fully. A platform like AppStore ain’t free. Epic couldn’t even do what Netflix or Udemy are doing with payments outside the app.

    EPIC Fail !

    Not quite.

    Epic totally premeditated this battle.

    They got an update cleared by AppStore review and then made a server side change to allow in app payments using their own payment method.

    They also had their law firm ready and primed to sue immediately and the PR machine ready to go. They even had YouTube videos parodying Apple’s 1984 immediately available.

    Whatever you think of the situation, this was totally manufactured by Epic. They knew what would happen when they turned on the server side in app payment system and were ready for it. This took a lot of planning.

    Epic fail it was not. They may lose the case but they’ve got what they wanted with all the publicity.

    The monopoly angle thing is a bit disingenuous too. Fortnite is available on loads of platforms and is most successful on Xbox and PlayStation which have the same kinds of terms Apple have. Even google have similar terms, although in the case of android there are alternative stores to the google app store. But if you want to be on the google store you play by their rules.

    reminds me like the anti trust case against Apple Books when it was Amazon that had the virtual monopoly and who benefited most from the verdict. Apple might have onerous business practices but so does everybody else. They’re just arguing about who should have the monopoly.

    Any company that makes money by encouraging children to make lots of in app Purchases doesn’t hold the moral high ground in my book.

    They’re all as greedy as each other.

  • @klownshed said:

    @MobileMusic said:
    If you don’t agree to the terms, don’t use a platform!

    Just a disgruntled company whose app was pulled from the store for trying to bypass the Apple’s payment system and thereby breaching the terms. Why would any platform allow a vendor to sell products using his own payment system through the app? Freeloading, that is. Someone did not read the terms fully. A platform like AppStore ain’t free. Epic couldn’t even do what Netflix or Udemy are doing with payments outside the app.

    EPIC Fail !

    Not quite.

    Epic totally premeditated this battle.

    They got an update cleared by AppStore review and then made a server side change to allow in app payments using their own payment method.

    They also had their law firm ready and primed to sue immediately and the PR machine ready to go. They even had YouTube videos parodying Apple’s 1984 immediately available.

    Whatever you think of the situation, this was totally manufactured by Epic. They knew what would happen when they turned on the server side in app payment system and were ready for it. This took a lot of planning.

    Epic fail it was not. They may lose the case but they’ve got what they wanted with all the publicity.

    The monopoly angle thing is a bit disingenuous too. Fortnite is available on loads of platforms and is most successful on Xbox and PlayStation which have the same kinds of terms Apple have. Even google have similar terms, although in the case of android there are alternative stores to the google app store. But if you want to be on the google store you play by their rules.

    reminds me like the anti trust case against Apple Books when it was Amazon that had the virtual monopoly and who benefited most from the verdict. Apple might have onerous business practices but so does everybody else. They’re just arguing about who should have the monopoly.

    Any company that makes money by encouraging children to make lots of in app Purchases doesn’t hold the moral high ground in my book.

    They’re all as greedy as each other.

    Yes. Epic has this completely planned out. It isn't about their game either. This is about getting the ability to have their app store on iOS.

    They can lose this case and still get what they want. I think that this is probably what will happen in the end too. It may take a couple of years, but Apple will have to give in eventually.

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