“Fortnite” maker Epic Games and Apple kicked off their three-week trial Monday in a courtroom battle that could have far reaching implications for the iPhone maker’s business model and U.S. antitrust law.

In opening statements in a federal courthouse in Oakland, Calif., Epic painted Apple as a monopolist that concocted a plan to lure software developers and customers into iOS, its mobile operating system, and then lock them in with onerous and restrictive rules.

Apple painted Epic as an opportunist looking to cut costs with a court case that could destroy iOS and endanger consumers by forcing allowing harmful and malicious apps onto their phones.

While both sides trade blows, U.S. District Judge Yvonne Gonzalez Rogers, who will decide the case, must analyze whether iOS falls into the strict legal definition of a monopoly, and then whether Apple’s business practices amount to an abuse of monopoly power, as Epic alleges.

“At some level, this is a run of the mill antitrust case, in the sense that the issues are fairly standard,” said Shubha Ghosh, a law professor at Syracuse University who focuses on antitrust issues. “Though the facts are unique, and the potential outcome could be very interesting for tech companies like Apple.”

Apple’s strategy is to steer the case into the narrow confines of the portions of U.S. antitrust case law that benefit its side. But Apple may not be able to sidestep the bigger philosophical question of whether its operating system has grown so large and important that it has become its own market, experts say.

The trial marks the highest profile antitrust trial involving a technology giant since the U.S. Department of Justice brought Microsoft to court over similar allegations more than 20 years ago. In that case, Microsoft was accused of abusing its market dominance over its Windows operating system. It lost, but portions of the case were later overturned on appeal.

The Microsoft case, though, was a watershed moment in the technology industry and experts say it created breathing room for new entrants, such as Google, to thrive where they otherwise would have been crushed by Microsoft.

Epic was scheduled to begin its opening remarks at 8:15 a.m. Pacific time, but the start was marred by technical difficulties. With the courtroom closed to the public and to press because of the pandemic, a conference call line was set up providing an audio feed of the trial. It took a half-hour to get the feed partially up and running, and it was at one point interrupted by video game fans who shouted into the line.

The muffled conference call line made it difficult to hear the first witness, Epic founder and CEO Tim Sweeney.

Epic’s opening remarks were delivered by Katherine Forrest, a partner with Cravath, Swaine & Moore and a former U.S. District Judge with the Southern District of New York. Forrest also served as deputy attorney general in the antitrust division for the U.S. Department of Justice.

Even though there is no jury in the Epic v. Apple trial, and the case is being decided by a federal judge experienced in complex antitrust law, Forrest laid out Epic’s case using easy-to-understand metaphors.

As Forrest described Apple’s “walled garden,” a mobile operating system that Epic alleges is designed to control developers and keep customers from leaving, she used a PowerPoint presentation that showed a brick wall being built in front of the iOS logo. Each slide, which contained internal Apple correspondence discussing ways to “lock in” customers, contained more bricks until an entire wall was formed.

“After Apple succeeded in building its walled garden and luring enough developers and users in, a tipping point occurred,” she said. “Users and developers alike became trapped inside. Apple threw away the key.”

As a judge, Forrest sometimes pushed attorneys to make complex topics simple to understand. In the trial of Fabrice “Fabulous Fab” Tourre, a Goldman Sachs trader accused of defrauding investors in mortgage-backed securities ahead of the 2008 financial crisis, she warned lawyers against the use of technical jargon. “A synthetic CDO is gibberish,” she said. “You need to explain it and then come back to it and explain it again maybe. Have a heart.”

Another reason lawyers often speak more plainly than seems necessary is to create a court record that may be necessary on appeal. The case is also likely being watched by the U.S. Department of Justice, which could bring its own case against Apple, legal experts say, on behalf of consumers. Epic’s lawyers, for instance, asked Sweeney obvious questions, such as whether he had ever heard of Unreal, a game development platform he created and owns.

Customer lock-in is central to Epic’s argument against Apple. If it’s difficult for customers to switch from iOS to the competing operating system, Google-owned Android, Epic can more easily argue that iOS is a market unto itself, and that Apple therefore has a monopoly.

Apple argued that the market should be defined much more broadly, and that iPhones also compete with video game consoles, such as PlayStations, Nintendos and Xboxes.

“The most dangerous thing Epic is going to try to sell this court is the idea that consumers would be better off if Epic has its way. Nothing could be further from the truth,” Apple attorney Karen Dunn, a partner with Paul Weiss, Rifkind, Wharton and Garrison, said in her opening statements. “The result for consumers and developers will be less security, less privacy, less reliability, lower quality, less choice — all of the things that antitrust laws seek to protect.”

Apple’s day of reckoning seems here already in Europe, where the European Commission recently ruled that iOS is, in fact, a market unto itself. Last week, it made a preliminary ruling that Apple has used its power in that market to stymie competition in music streaming, where companies like streaming service Spotify must compete inside of Apple’s so-called walled garden.

Apple is “going to have to focus more on arcane antitrust law” said Valarie Williams, a partner at the law firm Alston and Bird who listened into the case Monday. “I still wouldn’t say Apple has the upper hand on the law, it’s just that it’s Epic’s burden to prove, and the law makes that a hard, hard road.”

Epic’s legal team, made up of heavy hitters, is led by Christine Varney, a partner at Cravath, who represented Netscape in its antitrust suit against Microsoft more than two decades ago and served as assistant attorney general of the antitrust division under the Obama administration.

Rogers barely spoke during the first day of trial, offering little in the way of hints on her thinking in the case. As more witnesses take the stand, the questions Rogers asks will give both sides a better sense of how the case is going. When Epic is done presenting its case, Apple will get a chance to put on its defense. It could also ask for “summary judgment,” essentially a request to end the case early and, Apple would hope, in its favor.

Below are the updates from the first day of the trial.

10:22 p.m.
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The case has wrapped for the day

The court has moved to a sealed session, closed off to the public and press, so for all intents and purposes, Epic v. Apple has wrapped for the day.

Monday’s proceedings were mostly opening statements by the plaintiff and defendant, followed by direct and cross examination of Epic CEO Tim Sweeney. Epic’s view of the case is that Apple has deliberately made iOS a walled garden; a suitable remedy would be to allow developers and users to interact with it as they would with an ordinary computer. Apple countered by citing Qualcomm (a precedent that foreshadows a difficult road for Epic) and arguing that Epic was trying to “force Apple to let into its App Store untested and untrusted apps.” You can read a more detailed breakdown in the live feed below.

The biggest revelations came from exhibits filed by both companies, which included emails, memos, slide decks and internal analytics long hidden from the public eye. These documents, which numbered in the hundreds, will provide ample fodder for discussion in the coming weeks and months.

The trial will resume tomorrow, at 11:30 a.m. Eastern time/8:30 a.m. Pacific time, according to the judge’s calendar.

9:56 p.m.
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In cross-examination of Epic CEO Tim Sweeney, Apple asks ‘Why now, and why Apple?’

Earlier today, Epic’s counsel asked CEO Tim Sweeney a series of questions that helped him lay out Epic’s side of the story. Now, it’s Apple’s turn to challenge Sweeney during cross-examination.

Early in his line of questioning, Richard Doren, counsel for Apple, grilled Sweeney on the fact that Epic hadn’t raised any issues with Apple’s policies when it originally joined the iPhone maker’s developer program. Apple’s 30 percent rate hasn’t changed since Epic began working with the company. In response, Sweeney noted he’d been a vocal opponent of walled gardens for years, even if he hadn’t directly confronted Apple. The questions echoed an earlier remark by Doren, in which he described “Fortnite” as a game that was growing less popular and lucrative over time. The implication: that Epic chose to launch its legal challenge against Apple to combat financial head winds.

Later, Doren repeatedly asked Sweeney to confirm details about other platforms’ policies regarding commissions. Sony, Doren noted, leveraged the exact same 30 percent rate on the PlayStation. The same is true for Xbox and on the Nintendo Switch, Doren had Sweeney acknowledge. In the courtroom, this was apparently a more visual exercise, which Doren walking Sweeney through a chart, item by item.

During the cross-examination, the audio fell silent on the public conference line — one of a litany of technical difficulties on the call so far. Eventually, those waiting and listening were greeted with an unceremonious announcement: “Your conference is ending now.”

9:20 p.m.
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We finally know how much Epic Games paid for free and exclusive titles on its Epic Games Store

Since its launch, Epic Games has courted developers for its eponymous Games Store, seeking to publish certain games exclusively and offer other games free. But few details have been shared about Epic’s efforts to get games on its platform — until now.

An internal Epic Games presentation from October 2019, released as an exhibit in the course of today’s trial, has made public a trove of data about the strategy and performance of the Epic Games Store.

In one graph that tracked user acquisition over time, spikes in new users are attributed to days on which free or exclusive games were made available. “Subnautica,” the Epic Games Store’s first free game, brought in approximately 1.5 million new users on its first day of availability. Epic paid “Subnautica’s” developer, Unknown Worlds, $1,400,000 to offer the game free of charge on its platform, according to the document. The offer brought 804,052 new accounts to the Epic Games Store and by Epic’s calculation, each user cost the company $1.74.

Most of the developers listed in the document were paid much less than Unknown Worlds, with many arranging five-figure deals with Epic. The presentation’s big takeaway was that free games led to approximately 5 million new users on the platform, costing Epic approximately $2.37 per new account overall.

Epic has aimed to wrest marketshare from their chief competitor on PC, Valve, which runs the Valve store. According to the exhibit, approximately 7 percent of new users eventually become paying users on the Epic Games Store, though the majority of these are players who arrived to the Epic ecosystem through the free-to-play game of “Fortnite.”

8:32 p.m.
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Epic Games Store is not profitable, CEO says

Epic Games Store, the company’s digital storefront for games, is not profitable, CEO Tim Sweeney said in testimony Monday.

Sweeney said the Epic Games Store is “hundreds of millions of dollars short of being profitable” because of its upfront costs and is expected to become profitable “within three or four years.”

The Epic Games Store, which is on PCs, has thrown a lot of money at game developers, creating exclusive deals and free game offers on its store to attract more users. It competes against Valve’s Steam PC games store, which has traditionally commanded the market. Epic noted that it takes a 12 percent revenue cut from developers, less than the 30 percent commission that Steam and Apple charge, which some developers argue is excessive.

That in turn hasn’t added up into a profit yet for Epic. According to a document entered into evidence, when it came to cash flow, Epic Games Store cost the company a $359 million investment in the 2018-2019 period.

Similar to the company’s big bet on esports in 2019, the Epic Games Store still isn’t contributing to the company’s bottom line. Epic actually made $2 million in revenue from the Epic Games Store in 2018 and $233 million in 2019. Epic forecast the store to make $401 million in 2020, but the evidence, which is dated January 2020, did not list actual 2020 figures.

8:06 p.m.
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Epic Games is trying to prove ‘Fortnite’ is more than a video game

Don’t think of “Fortnite” as just a video game, Epic Games CEO Tim Sweeney said during the trial involving Apple on Monday. It’s part of what could become the “metaverse,” a term Sweeney uses often.

He was asked to define the metaverse, which he had described to me in a December interview as a medium “coming into existence” where people can be connected in a potentially massive world.

On the stand, Sweeney described what “Fortnite” is: “It’s a phenomenon that transcends gaming. It’s a social and entertainment experience that includes a variety of gaming experiences and nongaming experiences within it.”

Epic counsel Katherine Forrest led Sweeney into an increasingly detailed line of questioning about what a player can do in “Fortnite.” It’s not just a battle royal game where 100 players fight each other to be the last survivor.

As a virtual destination, people can log on and hang out in “Fortnite,” and it hosts concerts, debuts film trailers and provides other in-game events. Epic has done dozens of partnerships with brands like Marvel and top soccer clubs, directors like Christopher Nolan and musicians like Travis Scott and Marshmello. Sweeney also mentioned a program called “We The People,” a conversation about race in America.

At first glance, the details might sound out of place in an antitrust case looking at whether Apple’s App Store practices are too restrictive. But Epic is trying to prove that “Fortnite” isn’t just a video game and that Apple’s argument — that in the gaming industry, Epic has plenty of substitutes for the iPhone, such as the Nintendo Switch or the Xbox — shouldn’t apply.

7:20 p.m.
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Epic Games CEO Tim Sweeney takes the stand

Epic Games CEO Tim Sweeney took the stand Monday afternoon and answered questions from Epic counsel, including when he founded Epic Games (in 1991) and his background in games (he grew up learning how to code on an Apple II computer). He also explained different games Epic has made, including “Infinity Blade,” and products it develops, such as the Unreal Engine.

But Epic is best known for “Fortnite.” Asked to explain what it is, Sweeney said it is much more than just a shooting game — it is also an entertainment system.

Sweeney elaborated on his company’s complaints against Apple and its policies that Epic finds too restrictive. He explained that Epic is not looking for Apple’s App Review to go away and is not seeking additional compensation, as prompted by questions from Cravath lawyer Katherine Forrest. He said that Apple has hurt his business by requiring developers to go through the Apple App Store and use Apple’s in-app payment processing system.

Sweeney’s statement on the stand echoed what he has said on Twitter and to the media. He said that Apple can make more money on a game from the commission it receives than the game developers themselves make.

6:44 p.m.
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Apple, in its opening, blasts Epic as deceptive and disingenuous

Apple laid out its defense Monday in the trial versus Epic Games. Apple painted Epic as a company bent on lowering its costs. “Epic has decided it doesn’t want to pay for Apple’s innovations anymore,” Apple’s lawyers said. “Epic is here, demanding that this court force Apple to let into its App Store untested and untrusted apps.” That’s something the law doesn’t allow, Apple said.

Apple said emails uncovered during the discovery process show Epic’s chief executive, Tim Sweeney, was disingenuous. The lawsuit stems from Epic’s decision to offer “Fortnite” gamers an alternative payment method, bypassing Apple’s payment processing service and its 30 percent commission. Sweeney discussed its intentions with Microsoft ahead of time, Apple said. “While Epic is deceiving Apple, it’s giving Microsoft a heads-up.”

Apple focused much of its opening arguments on the video game industry. For instance, it said the majority of “Fortnite” revenue came from other platforms other than iOS. Apple’s point is that consumers have many choices if they don’t want to use an iPhone. Not only could they switch to an Android device, but they could use an Xbox, a PlayStation or a Nintendo.

Apple defended Epic’s allegation that it doesn’t police its platform, saying the system is getting better all the time. Apple said that if Epic wins, it will mean a less secure operating system and more danger for consumers.

Apple’s lawyers criticized Google’s Android operating system as lacking in security and warned that iOS would be less secure if it didn’t have control of the ecosystem.

6:22 p.m.
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Apple just cited a Qualcomm decision. That’s bad news for Epic.

In opening statements Monday, Apple cited Federal Trade Commission v. Qualcomm Inc., an antitrust case that was decided in 2020 in a federal appeals court.

“Anticompetitive behavior is illegal under federal antitrust law. Hypercompetitive behavior is not,” reads a now widely-cited portion of the federal appeals court’s decision.

The decision points to the uphill battle Epic will face in its grand ambitions of reshaping the closed iPhone ecosystem. Proving that Apple’s refusal to open iOS to competing stores and in-app payment systems is anticompetitive — as opposed to merely hypercompetitive or sharp-elbowed — will require vaulting an extraordinarily high bar.

In 2017, the FTC alleged that Qualcomm, which owns patents essential to the creation of mobile phones, was using its dominant position in the industry to extract unreasonable fees from companies that rely on its tech. Two years later, in May 2019, U.S. District Court judge Lucy Koh agreed. In a 233-page decision, she sided with the FTC, stating that Qualcomm had abused its monopoly power. But in 2020, two days before Epic filed its suit against Apple, a federal appeals court reversed Koh’s decision.

“The company has asserted its economic muscle ‘with vigor, imagination, devotion, and ingenuity.’ … It has also ‘acted with sharp elbows — as businesses often do,’” the ruling says. The FTC had to prove that Qualcomm was destroying competition. But it had failed to do so, in the view of the appeals court.

“If Apple can persuade the court that this is just about … Apple’s control of its own store and the prices it wants to charge, then Qualcomm says not quite ‘Do whatever you want, we don’t care,’ but something pretty close to that,” Mark Lemley, director of the Stanford Program in Law, Science and Technology, told The Washington Post in August.

The impact of a federal court overturning a vigorous antitrust ruling could have serious ramifications, including on the rulings of district court judge Yvonne Gonzalez Rogers, who is overseeing Epic v. Apple, alongside two other Apple-related cases.

“[Gonzalez Rogers’] colleague on the northern district of California wrote a 233 page, very detailed, fact-finding opinion, and it was just summarily thrown out root and branch,” said Lemley. “I think that’s got to affect how far the judge is willing to stick her neck out on this issue.”

6:02 p.m.
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Technical difficulties in Epic vs. Apple trial highlights debate about technology in court

A technical issue has interrupted Apple’s opening argument and has now led federal judge Yvonne Gonzalez Rogers to call for a 20-minute recess.

Because of the pandemic, the courtroom is closed to the press, save for one “pool reporter” representing all media outlets. In pretrial hearings, the court used Zoom to broadcast the public hearings. But for the trial, the court opted for an old school method: a conference call.

On Monday, as the trial was set to begin at 8:15 a.m. PST, the conference call line was a bust. Court officials spent about a half-hour trying to get the line up and running. Eventually, the proceedings could be heard on a public conference line, but the conference line for reporters was silent.

You might be asking: Why, in 2021, would the court be so hesitant when it comes to technology in the courtroom? Despite decades of televised court hearings from state courts, the federal court system has been slow to allow the broadcasting of court proceedings. One point of view is that when proceedings are broadcast to the public, it affects the privacy of the parties and distracts from the process, which might affect a fair trial. Another point of view: The courts belong to the public and all citizens should have the ability to see what happens in them.

The pandemic, which prevents the public from appearing in the courtroom at all, puts the courtroom broadcast debate under the microscope in a new way.

This trial is between two large companies, and the case is being decided by an experienced federal judge in Gonzalez Rogers. There are already many eyeballs on this trial, and it’s difficult to see how making the trial more accessible would hurt either side.

5:38 p.m.
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Epic Games paid billions in commissions to third-party platforms. A small fraction of that went to Apple.

Epic Games has paid billions in commissions to third-party companies hosting “Fortnite,” such as Microsoft, Sony, Nintendo and Apple, according to evidence filed this morning.

A Microsoft Excel file, shared as an exhibit, lists commissions paid between January 2017 and October 2020. The vast majority of these payments relate to “Fortnite,” with a smaller percentage accounted for by “Rocket League” and a handful of other Epic properties.

In the tracked time span, Epic Games paid $237,175,521 in commissions to Apple for “Fortnite.” By comparison, in 2020 alone, payments to Microsoft ($245,992,576) and Sony ($451,405,240) exceeded Epic’s total commission payments to Apple.

Crucially, though, Epic’s case is not about the costs imposed by Apple. Epic’s case revolves around antitrust questions — namely, whether Apple is a monopolist and whether it abuses that monopoly in its dealings with app developers. Epic will argue that Apple can charge the commissions it wants because it has monopoly power; the prices are just a symptom, and Epic’s case concerns itself with the cause.

“Antitrust doesn’t really set prices,” Randy Picker, a professor of law at the University of Chicago, told The Post in August 2020. “Antitrust regulates, as it were, mechanisms. And those mechanisms generate what prices they generate. But [antitrust is] not in the price-setting business.”

5:21 p.m.
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Epic’s opening arguments focus on Apple’s ‘walled garden,’ and customer lock-in

Epic is done with its opening statements. The arguments homed in on the metaphor that Apple’s mobile operating system, iOS, is a “walled garden” that prohibits competition, stifles innovation and makes it difficult for consumers to switch to competing smartphone operating systems.

Epic tried to frame the trial as broader than just Epic vs. Apple. “Epic is suing for change,” Epic’s lawyer said in the company’s opening statement. “Not just for itself but for all developers.”

Epic painted the construction of iOS as a nefarious “plan” concocted to lock consumers in and hold developers hostage. “Once they committed themselves to the iOS ecosystem, individual app developers were in a tenuous position,” Epic said, because Apple “could terminate developers at any time for any reason at all.” Epic called it “take it or leave it contractual language” that is emblematic of a monopoly abusing its power.

Epic’s argument: Apple should be forced to open its operating system up and allow developers to freely use iOS, just like they would any other computer.

5:14 p.m.
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Uploaded evidence includes info on esports losses around Fortnite World Cup

We’ve combed through a few of the 100-plus files Apple and Epic Games have uploaded as evidence and found some intriguing information around Epic’s esports aspirations and the Fortnite World Cup, a world championship event for players of “Fortnite.”

One of the documents uploaded relates to Epic Games’ revenue from 2018 to 2019. It gives insights into Epic’s financials that were previously unavailable since Epic isn’t a publicly traded company. Epic Games notes it “overestimated” how much money it could make off esports in 2019 by $154 million. In 2019, its gross revenue of $4.2 billion fell below its planned revenue ($4.59 billion), partly because of its investment in esports.

In 2019, Epic Games staged the Fortnite World Cup event in New York that featured a prize pool of $30 million, in addition to millions in other cash prizes it handed out that year. Back then, Epic drew questions of how it was able to afford the event and whether the event was even profitable, as the stadium wasn’t full and the event didn’t appear to have many sponsors.

Among emails from 2019 entered into evidence, Epic employees discussed partnering with Apple and making the tech giant the “presenting sponsor” for the Fortnite World Cup, which could “give us some more leverage with Apple.”

Ultimately, the World Cup was held at the Arthur Ashe stadium with no significant branding.

5:06 p.m.
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New documents revealed at trial bolster Epic’s argument that the Apple App Store isn’t well policed

With the trial underway, new documents are being entered into evidence and some of those documents go to one of Epic’s key arguments: That the App Store isn’t really “curated,” as Apple claims in its marketing. This is important because one of Apple’s defenses for its restrictive “walled garden” approach to iOS is that it’s necessary to keep iOS secure and safe.

The documents show a behind-the-scenes struggle at Apple to achieve successful content moderation on its own platform. This internal struggle contrasts greatly with what Apple has said publicly — that it is in complete control of the App Store and that it is successful in policing it for bad actors. Here’s a new email from Phil Schiller, a long time Apple executive who has overseen the App Store:

“What the hell is this????

Remember our talking about finding bad apps with low ratings?

Remember our talk about becoming the ‘Nordstroms’ of stores in quality of service?

How does an obvious rip off of the super popular Temple Run, with no screenshots, garbage marketing text, and almost all 1-star ratings become the #1 free app on the store?

Can anyone see a rip off of a top selling game? Any anyone see an app that is cheating the system?

Is no one reviewing these apps? Is no one minding the store?

This is insane!!!!!!!"

4:47 p.m.
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Epic’s opening courtroom slide deck depicts Apple’s ‘walled garden’ being slowly built over time

In Epic’s opening statements, Epic’s lawyers showed a presentation to the court, highlighting several documents they allege reveal Apple’s “plan” to create a “walled garden,” or a highly restrictive operating system that attracts users and then “locks them in” by making it difficult to switch to a competing one.

The first slide included an illustration of a partially built brick wall in front of a gray background that says “iOS.” With each subsequent slide, more bricks were added to the wall.

The slides also included new documents. For instance, a former Apple executive named Ian Rogers emailed Eddy Cue, Apple’s vice president of Internet software and services, telling him “The #1 most difficult to leave the Apple universe app is iMessage. Moving to Android my family was forced to move to Facebook to message me, I used WeChat, WhatsApp and Slack for work, but I missed a ton of message from friends and family who all use iMessage and kept messaging me at my old address. iMessage amounts to serious lock-in.”