Tech Brew Ride Home - Tue. 12/12 – Epic Win!

Starting point is 00:00:00 On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Tuesday, December 12th, 2023. I'm Brian McCullough today. Epic Games won its case against Google's App Store, but why was this case different than the one they lost to Apple? The sort of big changes to Apple TV,

Starting point is 00:00:47 Be Real is still around and still being real, but E3 is not. It's officially over as a conference. Here's what you miss today in the world of tech. As I said on various social platforms this morning, how can you not go with an epic win headline if you're doing this story today? I don't see how. The jury in the Epic v. Google case has found that Google does have a monopoly in the Android app distribution and in-app billing services markets. Google plans to appeal, but quoting the verge, after just a few hours of deliberation, the jury unanimously answered yes to every question put before them that Google has monopoly power in the Android app distribution markets and in app billing services markets, that Google did anti-competitive things in those markets, and that Epic was

Starting point is 00:01:41 injured by that behavior. They decided Google has an illegal tie between its Google Play App Store and its Google Play billing payments services, too, and that its distribution agreement, Project Hug, deals with game developers and deals with OEMs, were all anti-competitive. Google Affairs and Public Policy VP Wilson White said the company plans to appeal the verdict, and that, quote, the trial made clear that we compete fiercely with Apple and its App Store, as well as app stores on Android devices and gaming consoles, end quote. It's a historic victory, particularly because Epic mostly lost its fight against Apple two years ago when Judge Yvonne Gonzalez-Rogers decided that fight had nothing to do with apps.

Starting point is 00:02:22 But Epic v. Google turned out to be a very different case. It hinged on secret revenue sharing deals between Google, smartphone makers, and big game developers, ones that Google execs internally believed were designed to keep rival app stores down. It showed that Google was running scared of Epic specifically, and it was all decided by a jury, unlike the Apple ruling. Mind you, we don't know what Epic has won quite yet. That's up to Judge James Donato, who will decide what the appropriate remedies might be. Epic never sued for monetary damages. It wants the court to tell Google that every app developer has total freedom to introduce its own app stores and its own billing systems on Android. And we don't yet know how or even whether the judge might grant those wishes. both parties will meet with Judge Donato in the second week of January to discuss potential remedies.

Starting point is 00:03:08 Judge Donato has already stated that he will not grant Epic's additional request for an anti-circumvention provision, quote, just to be sure Google can't reintroduce the same problems through some alternative creative solution, as Epic lead attorney Gary Bornstein put it on November 28th. We don't do. Don't break the law injunctions. If you have a problem, you can come back, Donato said. He also said he did not intend to decide what percentage fee, Google should charge for its products. Although Epic didn't sue for damages, Epic Games CEO Tim Sweeney suggested Epic stood to make hundreds of millions or even billions of dollars if it doesn't have to pay Google's fee, end quote. To say this puts the App Store duopoly enjoyed by Google and Apple

Starting point is 00:03:48 in Jeopardy is putting it kind of mildly, quoting from a different Bloomberg piece by Mark German and Davy Alba. Quote, Google's legal defeat at the hands of Fortnite Maker Epic Games threatens to royal an App Store duopoly with Apple that generates close to $200 billion a year, and dictates how billions of consumers use mobile devices. The dominoes are going to start falling here, Tim Sweeney, Chief Executive Officer of Epic said in an interview after the verdict, the end of 30% is in sight. Though Apple won a similar case against Epic in 2021, that ruling was made by a single judge. The nature of the Google suit where a jury cited unanimously with Epic let actual consumers weigh in on the world of smartphone apps. In under four hours of deliberations,

Starting point is 00:04:28 they found that Google had engaged in anti-competitive conduct, harmed Epic, and illegally. forced its own billing system on developers. The battle began in 2020 when Fortnite was kicked off the Apple and Google Play app stores because the game developer had secretly installed its own payment system. The idea was to bypass the up to 30% revenue share that the two tech giants take from in-app purchases and subscriptions on their platforms. In response, Epic sued both companies. Google also has drawn criticism for making side deals with big developers like Spotify technologies, where it offers lower commissions. In Monday's decision, the judge found that Google shouldn't require Android app developers to use its billing system for software sold through its store, and that it

Starting point is 00:05:07 shouldn't offer custom agreements to certain developers. The immediate after-effect is we will see a shift in the marketplace where big tech companies will have to make accommodations, whether it is more access, better terms, more options for developers, to stave off legal exposure, said Paul Swanson, a partner at Holland & Hart, who specializes in technology and antitrust law. And that will ultimately help consumers, he said. The economics is real, he said, when you remove a 30% tax from and ecosystem, consumer prices will get better, or quality will get better, and selection will increase, end quote. But there were significant differences between the two trials. During the current case, Epic highlighted agreements, Google reached with top game developers, including Activision

Starting point is 00:05:46 Blizzard and Nintendo for smaller fees. Every developer should now demand one of those deals, Sweeney said. Revenue-sharing deals among Google, smartphone makers, and game developers came to light during the trial. Justin Patterson and other analysts at Key Bank, Capital Markets, wrote in a note to clients, we believe this was a key difference between the cases. that contributed to Apple's victory and Google's loss, end quote. In Apple's App Store, the same 30% take rate was applied evenly while Google was attempting to steer traffic away from rival app stores on Android, analyst at Jeffreys wrote in a note. Meanwhile, Apple simply does not allow any rival app stores whatsoever, end quote. There's a fortune at stake for both Apple and Google in

Starting point is 00:06:23 app spending is forecast to reach $182 billion next year and $207 billion in 2025, according to research firm's Censor Tower. Google will get about $10.3 billion in-app purchases from app sales and in-app purchases from the Play Store in 2020, according to analysts at Wells Fargo. For every five points that the Play Store fee rate decreases, Google loses about $1.3 billion in operating income or nine cents of earnings per share, the analyst wrote. Apple has said it doesn't have any side deals with developers, though it offers discounted rates to some video streaming partners like Amazon. During the trial, Epic's lawyers said Google also didn't properly retain some internal. records relevant to the case. I don't think there's much of a debate that the monopoly finding with Google

Starting point is 00:07:04 holds true with Apple too, said Jason Kent, CEO of Digital Content Next, a trade association for digital content companies. The distinction that will be poured over is whether or not Apple abuse that, end quote. I suppose this segment is spiritually related to the previous one. Sources are telling Reuters that Apple has offered to let rivals access its tap and go payment systems for mobile wallets in an effort to settle EU antitrust charges and avoid a possible hefty fine. Quoting Reuters, the EU competition enforcer last year charged Apple with curbing rivals access to its tap-and-go technology, near-field communication or NFC,

Starting point is 00:07:45 making it difficult for them to develop rival services on Apple devices. It said this benefited Apple pay, Apple's own mobile wallet solution on iPhones and iPads, and pointed to the company's significant market power in the market for smart mobile devices and dominance in mobile wallet markets. The European Commission is likely to seek feedback next month from rivals and customers before deciding whether to accept Apple's offer, the people said. They said the timing of the market test and whether it will go ahead could still change. Apple Pay is used by more than 2,500 banks in Europe and over 250 FinTechs and Challenger banks. The NFC chip enables tap-and-go payments on iPhones and iPads.

Starting point is 00:08:20 Apple faces a second charge of preventing Spotify and other music streaming companies from informing users of other buying options outside its app store in a case dating from 2020. The commission is expected to issue a decision next year that could include a fine and in order to stop this practice. Companies risk fines of up to 10% of their global annual turnover if found guilty of breaching EU antitrust rules, end quote. Apple has released iOS 17.2 with that new journal app. Chi 2 support for iPhones 13 and 14. The 15 Pro got that spatial video capture, so the functional support for the launch of the Vision Pro's phone. photos app is live. But more interesting is that Apple fully redesigned Apple TV in iOS 17.2 and TVOS 17.2 with a sidebar that unifies content. Quoting variety, starting Monday, the iTunes

Starting point is 00:09:20 Store app on iPhone and iPad will redirect users searching for TV and film titles to the newly redesigned Apple TV app. In addition, the iTunes movies and iTunes TV shows apps on Apple TV 4K and Apple TV HD streaming devices will also kick users over to the Apple TV app on those platforms. The updated Apple TV TV TV app released as part of iOS 17.2 and TVOS 17.2 features a new sidebar that provides access to Apple TV Plus the company's subscription streaming service. MLS season pass, home of Major League soccer, store where users can buy and rent movies and shows and shortcuts to channels and apps viewers already have, such as Disney Plus, Paramount Plus, Amazon's Prime Video, and Max. The store tab in the Apple TV app now unifies

Starting point is 00:10:05 movies and TV shows in one place, and it replaces iTunes as the point of sale for transactional video on-demand titles. Meanwhile, the Apple TV app's new ad channels and apps shelf lets users explore and subscribe to popular streaming services. The Apple TV app's new sidebar also introduces Home, a unified guide for all the shows, movies, and sports viewers love. Within Home, The channels and apps section lets users browse each of their subscribed channels or connected apps in detail. The app's collections, including new shows and movies, top charts, trending, and for you, are where users will find the top recommendations for them.

Starting point is 00:10:42 On living room devices, the sidebar of the Apple TV app also will feature profiles allowing households to more easily switch among different user profiles to see their up-next cues and personalized content recommendations, end quote. Pew Research released one of those surveys they do periodically looking at what social networks teens in the U.S. use. 93% of them use YouTube, 63% of them use TikTok, 60% use Snapchat, 59% use Instagram, and 33% still use Facebook. Around 33% of all teens use at least one of those almost constantly, and the ones most mentioned as being used almost constantly, are YouTube and TikTok. Other statistics, Discord usage, 28%. WhatsApp, 21%, though, I'm sure that would be a larger percentage overseas. Twitter comes in at 20 percent, Twitch, 17 percent. Interestingly, support for banning TikTok has decreased from 50 percent of U.S. adults in March to just 38 percent today. But back to usage numbers for social networks. 13 percent of U.S. teens aged 13 to 17 use Be Real. Yes, Be Real is still hanging in there.

Starting point is 00:11:53 In fact, they're still evolving. They just announced plans to add behind the scenes, an iOS live photo style feature, and real groups for smaller groups, quoting TechCrunch. Behind the scenes is an opt-in feature and is taking a lot of UX nods from how Apple has conditioned us to engage with live photos on our iPhones. If a friend posts a B-Reel with BTS-enabled, the live photo system will appear in the upper corner of the image. If you long press on it, you'll be able to see a few seconds of video leading up to the Be Real Photo.

Starting point is 00:12:24 This app is already designed for connecting with your close friends since it prompts you to share a front and back camera photo at a random time every day. You can't see other people's posts unless you make your own B-reel post. Be-reels tend to be more unfiltered and, for lack of a better word, authentic, since you're being prompted to take a picture at an unknown time. But if you get the notification to post while you're, oh, I don't know, on the toilet, maybe just post late. But now B-reel is creating an experience for your even closer close friends. You can start a real group where you can share your B-reels more privately. To sweeten the deal, the admin of the group gets to choose when the daily notification goes off. You can DM B-Reels within the group, but you also

Starting point is 00:13:02 get a group chat, which we assume will be used to RAS the admin for choosing an inappropriate time to be real. You can only be in two groups, though, so choose wisely. Be Real is at a do-or-die-m moment. Can the app survive the hype cycle or will it fizzle out? According to Pew's annual survey teens on teens and social media, an estimated 13% of U.S. teens, age 13 to 17, have used Be Real. But BeReal has pushed back on data from external sources in the past. In September, App Analytics firm Similar Web told TechCrunch that BeReal had about 16 million monthly active users, including about 3 million in the U.S. But Apptopia told TechCrunch that in 2023, BeReal had a high of 8.73 million mouths in October

Starting point is 00:13:44 and a low of 7.96 million in February. BeReal itself reported having 20 million daily active users worldwide in April and 25 million daily active users in September. Though the app was relatively stagnant at the beginning, BeReal has been rolling out tons of new features like messaging, the ability to post more photos, a Spotify integration, and Friends of Friends Discovery Feed. Soon, the app will add its 2023 year and review feature plus tagging, and like Instagram, you can easily repost content you are tagged in, end quote.

Starting point is 00:14:20 Finally today, it's official E3 is dead. The ESA has shut down the Electronic Entertainment Expo. also known as E3 after over 20 years of operation, quoting the Washington Post. After more than two decades of hosting an event that has served as a central showcase for the U.S. and global video game industry, the Entertainment Software Association, ESA, has decided to bring E3 to a close, said Stanley Pierre-Louis, present and CEO of the Nonprofit Trade Association that represents the games industry's interests in the United States. A mix of new competitors, partner withdrawals, changing audience habits, and pandemic-era disruptions

Starting point is 00:14:57 led to E3's collapse, ending years of attempts to resuscitate the event, which began in 1995. We know the entire industry. Players and creators alike have a lot of passion for E3. We share that passion, Pierre-Louis said. We know it's difficult to say goodbye to such a beloved event, but it's the right thing to do, given the new opportunities our industry has to reach fans and partners, end quote. Those new opportunities include online video news conferences that feed information directly to audiences without the costs associated with attending a trade show, including booth fees, travel expenses, and strict deadlines for presentations. In 2021, Nintendo paved the way for creating the direct format,

Starting point is 00:15:35 a video news conference announcing new games and products. In 2018, Sony PlayStation's decision to leave the event started a domino effect of other vendors and companies pulling their attendance, end quote. And then, of course, the whole pandemic didn't help matters either. Yeah, I jinxed it. The new project I wanted to tell you about today has been delayed at least one more day. In fact, that's why this episode is dropping a bit later than usual. Hit a real speed bump.

Starting point is 00:16:09 More on that, hopefully tomorrow.

Tech Brew Ride Home - Tue. 12/12 – Epic Win!

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