Apple CEO Tim Cook testified in defense of his company on Friday in an effort to retain control over its iOS ecosystem, deflecting tough questions from US District Judge Yvonne Gonzalez Rogers.
Last August, Epic Games, maker of Fortnite, sued Apple alleging that the iPhone maker illegally monopolizes iOS app distribution and payments. Epic hopes to convince Judge Gonzalez that Apple is violating antitrust law by imposing rules that force iOS developers to distribute through the iOS App Store and to rely solely on Apple's in-app payment system.
As recounted by press pool reporter Mike Acton of legal news service MLex, Cook arrived around 0735 Pacific Time wearing a dark grey suit, a white shirt with grey tie, black shoes, and a clear face shield. It did not protect him from Judge Gonzalez's skepticism.
The judge cited the findings of the developer survey that's been entered into evidence, which indicated that 39 per cent of software makers were either very dissatisfied or somewhat dissatisfied with Apple's distribution service, with 19 per cent neutral and 36 per cent somewhat or very satisfied.
Sometimes the developer and the user are not necessarily intersecting interests
Gonzalez then asked how that was acceptable and how, if those figures were correct, whether Cook feels the motivation or incentive to address developer needs.
Cook made clear that Apple's interpretation of user needs took precedence over placating developers.
"I’m not familiar with the document you are referencing – friction is what creates a curated experience for users that they are assured safe and trusted," said Cook. "So sometimes the developer and the user are not necessarily intersecting interests."
Gonzalez responded by expressing doubt that Apple feels "real pressure or competition to actually change the manner in which you act to address the concerns of the developers."
Cook disagreed, insisting that Apple is responsive to developer concerns.
At another point, Gonzalez asked Cook whether he agrees with the basic proposition that competition is good.
"I think it’s great," said Cook.
"You don’t have competition in IAP though," said Gonzalez, referring to in‑app purchases.
Cook insisted people could buy a Sony PlayStation or Nintendo Switch to play video games games and purchase stuff on a non-Apple system, to which Gonzalez said, "Well, only if they know, right?" (Apple's developer rules disallow promoting other platforms.)
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The judge also found it curious that the bulk of iOS revenue comes from gaming apps. She noted that she has free multiple banking apps, for which Apple does not charge a commission. "You don’t charge Wells Fargo or Bank of America," she said, "but you are charging the gamers to subsidise Wells Fargo."
Cook replied that Apple charges for digital transactions and that's simply the business model it has chosen.
In response to questioning from Epic's counsel about whether Apple makes editorial judgements about the apps in the App Store, Cook said, “We’re not making a moral judgement on them, if that’s what you’re asking."
Apple's developer rules suggest otherwise. As noted by Reuters reporter Stephen Nellis, Section 1.1 of Apple's App Store Review Guidelines is titled "Objectionable Content" and disallows "content that is offensive, insensitive, upsetting, intended to disgust, in exceptionally poor taste, or just plain creepy."
Cook insisted Apple's oversight was essential to keep people safe and that the App Store would become "a toxic mess" if it ceased reviewing apps.
He also had trouble remembering just how much Apple gets paid by Google to make Google Search the default on the iPhone.
Gary Bornstein, representing Epic, suggested the amount was $10bn.
“I don’t remember the exact number," said Cook.
Bornstein asked if Cook didn't know it was upwards of $10bn.
"I don’t know," Cook replied.
Later in the afternoon, after Cook's testimony concluded and other matters were dealt with, Gonzalez said the evidentiary portion of the trial was done and she expects closing arguments will follow, after which she will issue a written opinion. It will take some time, she said, but she intends to try to do so as quickly as possible.
At the start of this bench trial, the consensus among observers appeared to be that Apple would prevail. As it winds down, the outcome looks a lot less certain. ®