Apple CEO Tim Cook defended the company’s tight control of the App Store while testifying before a federal court in Oakland, California, on Friday, saying Epic Games, the developer behind “Fortnite,” was “malicious” when it tried to skirt Apple’s 30% cut of app purchases.
Cook’s testimony – beyond being a rare spectacle for a major tech CEO – is the crescendo to the three-week courtroom showdown between Epic and Apple, with the former accusing the tech giant of violating antitrust law by abusing its monopoly status to extort app developers.
Apple charges developers a 15% to 30% commission on all in-app purchases – something Epic has scoffed at. Epic attempted to circumvent Apple’s slice of App Store payments last year, which ended up with Apple booting “Fortnite” from the App Store. (“Fortnite” was a big money maker for Apple in its two years on the App Store, with an Apple executive on Thursday testifying the company made more than $100 million off commissions from the game.) That conspicuous run-in ultimately led to Epic’s antitrust lawsuit against Apple.
On Friday, while wearing a clear face shield, Cook testified Apple’s cut isn’t predatory, but instead a fair price when considering the investment Apple puts into maintaining the App Store. That investment, to the tune of about $100 billion since the App Store launched in 2008, benefits both developers and iPhone users, Cook said.
“The developer depends on the Store being a safe and trusted place where customers want to come,” Cook said, per ZDNet. Without Apple’s maintenance, the App Store would become a “toxic mess” for users, Cook added.
Epic doesn’t view it that way. The company argued in its court filing Apple abuses its monopoly strength to “coerce app developers into using Apple’s payment system.” And by forcing developers to use the App Store’s in-app payment method, without alternatives, Apple is able to charge an “exorbitant” app “tax,” Epic argued.
Friday’s testimony started off easily enough for Cook. He was able to sing Apple’s praises while he was being questioned by the company’s attorneys to start, even calling the App Store an “economic miracle” that has gone from 500 apps to 1.8 million in the last 13 years. (Cook could’ve said the same thing for Apple, which reportedly made $64 billion off the App Store last year.)
Things got a bit testier when Cook faced questions from Epic’s attorneys later on. As the Associated Press reported, Cook said he didn’t know exactly how profitable the App Store was but that he had a “feel” for its performance. Judge Yvonne Gonzalez Rogers – whose ruling will decide the case – pressed Cook afterward on his argument it’s fair for Apple to take a cut of all in-app purchases.
“I understand [the] notion that somehow Apple is bringing customers to the games… but after that first time, after that first interaction, the gamers are keeping the customers with the games. Apple’s just profiting off of that it seems to me,” Rogers said, according to Dorothy Atkins of Law360.
Cook said he viewed the situation differently, and said the App Store, by offering a large number of free apps, draws attention to other games, which then benefit financially from the exposure.
The Epic-Apple battle is expected to wind down next week. For more details on what’s at stake for both companies, click here.
Read original story Apple CEO Tim Cook Calls Epic Games ‘Malicious’ While Defending App Store in Court At TheWrap