Tim Cook faces charges Friday that Apple may have an illegal monopoly in a high-stakes case brought by Epic Games, the maker of Fortnitewhere the verdict could have far-reaching consequences for 1 billion iPhone users and thousands of developers.
Cook will be one of the final witnesses in a month-long trial, which ends on Monday, in which Epic alleges that Apple is abusing its alleged dominant position by forcing developers to distribute applications through the App Store, where it will pay a commission from costs 15 dollars. 30 percent.
Apple expelled Fortnite from the App Store last year, when Epic tried to evade costs by giving the game’s players a free way to make in-app purchases.
At stake are “billions of dollars” in high-margin revenue for Apple and a legal precedent for what constitutes a monopoly in the digital age, says Loup Ventures’ Gene Munster.
Apple’s software, hardware and services ecosystem is being monitored more closely by regulators in Washington and Brussels, where Epic is also protesting the iPhone maker. But Epic has endured an apparently arduous battle in court after Judge Yvonne Gonzalez Rogers said late last year the company was arguing on the verge of antitrust theory.
Epic has used economists, fellow app developers, and the words of Apple’s own executives to argue that Apple deliberately lured developers in with one set of expectations: a non-profit App Store like Steve Jobs did in 2008. said —before introducing a series of mechanisms to keep consumers in its ecosystem and make switching difficult.
Apple said Jobs’ statement wasn’t so much a promise as a prediction — a wrong one, sure, but wrong because the App Store turned out to be, in Cook’s words, an “economic miracle.”
Jobs had said it could become “a billion-dollar marketplace” at some point, while according to Sensor Tower, App Store spending reached $72 billion in 2020.
Outside experts called by Epic suggest the App Store has an operating margin of 78 percent — a percentage that reflects its dominance and abuse of power, according to the games’ creator. But Apple called those numbers bullshit, claiming it doesn’t even calculate App Store margins.
Things have taken bizarre turns, including an argument over whether the animated bananas in Fortnite are “naked” without their tuxedos, as Apple’s attorney said.
The seemingly trivial comment actually went to a core argument Apple has used in defense: that an exclusive and curated App Store is good for iPhone users because it protects them from lewd content that could appear if the company was forced to relinquish control. and allow alternative app stores on the hardware.
Epic called that argument “security theater,” a pretext for maintaining high fees and tight control. Epic’s counsel Katherine Forrest took a few minutes to demonstrate that iPhone users can search for terms like “porn” and “BDSM” in apps like TikTok, Instagram and Reddit. In the App Store itself, Apple sells ads for search terms, including “escort,” and receives a commission for in-app purchases on apps such as Love Positions 3D, said Forrest.
Whatever the outcome, the trial has provided a rare glimpse into the inner workings of the world’s largest company and uncovered material that Apple reviewers around the world may still be using to advance claims that it acted in an anti-competitive manner.
For example, emails discovered during the discovery process showed that Apple executives were against the company’s iMessage app being used on rival Android phones as well, saying that ” [an] obstacle for iPhone families giving their children Android phones.”
In another exchange, an Apple engineer said that “it would be great” if Apple could sell ads in the App Store, as Google does for the Play Store, but acknowledged that this would be “at odds” with Cook “telling the world we make great products without monetizing users.” Still, Apple launched the service in 2017 and expanded it last month.
Apple has complained about ‘trial by anecdotes’. The lawyers maintain that Epic has not shown that Apple’s App Store rules are unusual, that the 30 percent fee is excessive, or that its interest in protecting user safety is a pretext.
What exactly Epic plans to ask Cook is not clear. No emails of content written by Cook have been made public and Epic’s multi-day impeachment of him earlier this year remains sealed.
During a talk with Congress last year, Cook defended the management of the App Store as one of the “main functions” of the iPhone. He said he welcomed “reasonable and appropriate” investigations, but “would not compromise on the facts”.
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