During his appearance in the trial against Epic Games, the Apple boss is confronted with critical questions. And a judge who makes surprisingly clear comments.
EIt started with Tim and ended with Tim. Tim Cook, the CEO of the electronics company Apple, testified on Friday as the last witness in the trial in Oakland, California, in which his company is facing the video game manufacturer Epic Games (“Fortnite”). The litigation in the industry began with the testimony of Epic CEO Tim Sweeney three weeks ago.
The trial revolves around an antitrust lawsuit that Epic filed against Apple last year. It’s about the App Store, Apple’s platform for distributing programs for the iPhone. Epic accuses Apple of taking advantage of its monopoly on iPhones to impose its conditions on app developers, for example a commission of 30 percent on revenue from apps.
Tim Cook was on the witness stand for around four hours on Friday, as he himself said it was his first testimony in court. He first faced friendly questions from an Apple lawyer, then a far more hostile cross-examination with Epic representatives followed – and finally surprisingly critical comments and questions from Judge Yvonne Gonzalez Rogers.
“A disproportionate amount of money”
She said that she felt that Apple was making “a disproportionate amount of money” from video game manufacturers, based on the amount of technical infrastructure the company made available. You understand that Apple helps app developers to customers. But after this first contact, it is the developers who keep the users involved, and even then Apple still benefits.
The judge also questioned why the group does not allow developers to point out options for purchases outside of Apple’s payment system in their apps. She also quoted from a survey that 39 percent of app developers were dissatisfied with Apple, and asked if this was a sign that Apple felt little competitive pressure and was therefore not forced to accommodate the developers.
Cook countered that Apple felt “fierce competition”. He said he was unfamiliar with the survey, but admitted the existence of “tension” with developers, linking them to Apple’s not allowing many submitted apps in the App Store. He also defended app testing, saying otherwise the App Store would be a “toxic mess”.
He went on to say that if his company gave users options for purchases other than their own payment system, it would not be able to recoup its own platform costs. And he repeated the argument made by Apple representatives again and again during the process that strict control over their own ecosystem served the safety of users.
Cook was not upset
Judge Rogers often asked both sides critical questions during the trial, so her exchange with Tim Cook on Friday should not necessarily be taken as an indication of which side she is leaning towards. Cook was calm about his testimony and did not allow himself to be upset, similar to what he was recently at hearings before the American Congress.
In some places, however, he was remarkably ignorant. For example, when it came to the profit margins with the App Store, which an expert appointed by Epic put at almost 80 percent during his testimony. Cook didn’t let himself be pinpointed and said vaguely that Apple didn’t calculate that margin itself accurately. The Apple boss also complained that he did not know how much money his company was getting from the Internet giant Google for making its search engine the standard on his iPhones. According to some estimates, that’s ten billion dollars a year.
The dispute between Apple and Epic began last August. The video game manufacturer kicked him off himself when he brought new software for “Fortnite” to the App Store, which clearly violated Apple’s rules. It bypassed Apple’s payment system and thus also the commission attached to it.
Apple immediately removed the game from the App Store, whereupon Epic filed the antitrust lawsuit that is now in court. Epic argued that Apple was using its monopoly on iPhones to impose its conditions on app developers. The video game maker did not claim damages, but instead requested a change in these rules. This makes the litigation so dangerous for Apple because Epic is trying to exploit the business model in the App Store. Epic isn’t the only company to complain about the App Store business practices. The music service Spotify, for example, filed an antitrust complaint in Europe, on the basis of which the EU Commission filed antitrust proceedings against Apple last year.
The Oakland trial is due to end on Monday with the two sides’ closing arguments. The verdict is in the hands of Judge Rogers, not the jury. Rogers said Friday she will probably take some time with her decision but hopes to deliver a verdict by August 13th. She also said she expects the case to go on appeal and that the current process will be just one of several chapters in the litigation.