Sunday, June 20, 2021


With the bench trial in Oakland, Calif., nearing its expected end on Monday, Mr. Cook would follow other Apple executives this week who tried to counter arguments by Epic that Apple improperly prohibits competing app stores on the iPhone and forces in-app purchases for digital payments through its own system that takes as much as a 30% cut.

Apple’s case has depended upon it pointing to Android phones, personal computers and videogame consoles as examples of how it isn’t the only way for Epic to distribute its “Fortnite’’ game, and underscoring that other platforms collect a similar commission.


Does Apple unfairly restrict competition in the mobile-app marketplace? Why, or why not? Join the conversation below.

Mr. Cook is expected to emphasize how much economic value Apple’s investment in the app economy has created for developers, which fits into claims from Apple’s lawyers that its fees are fair. Apple has told the court he will speak about the company’s values and discuss its business, operations and competition, as well the history of the App Store’s creation.

His testimony will be closely monitored well beyond the courtroom as Apple faces increasing threats from lawmakers and regulators around the world examining the power it has over third-party software developers.

Former marketing chief

Phil Schiller,

now an Apple fellow responsible for the App Store, faced questions Monday and Tuesday while

Craig Federighi,

senior vice president of software engineering, took the stand Wednesday. Both faced tough questions from Epic’s lawyers, who engaged in testy exchanges with Mr. Federighi that drew a rebuke from U.S. District Judge

Yvonne Gonzalez Rogers.

Approaching his 10th anniversary as CEO, Mr. Cook’s strategy for Apple involves expanding its digital offerings to offset past slow iPhone sales. The trial has illustrated how important the App Store is to those profits. A topic that could become contentious during Mr. Cook’s time on the stand deals with the profit Apple makes from the App Store.

Epic court records refer to internal emails to Mr. Cook estimating the profit margin for Apple’s App Store at almost 80%, figures that the games company supplemented with its own expert analysis.

Apple has disputed the figures and said it doesn’t separate out the store’s profitability or account for its business operations in that way.

Epic lawyers have latched on to the figure as part of an effort to bolster its claim that Apple is making outsize profits on the backs of developers.

Another dispute between the two sides deals with the security of the iPhone. Epic is arguing that Apple has exaggerated the extent to which the app-review process makes iPhones safer for users, and that it instead is a pretense for blocking third-party app stores. Apple has countered that the app-store review is but one layer of security that gives its system laudable safety and reliability.

Over the years, Mr. Cook has often spoken publicly about the security and privacy of Apple’s iPhones. That Apple lawyers are expected to put their CEO on the witness stand, in what would be his first time testifying in a trial, underscores the confidence they have in his ability to deliver a message to the judge.

His testimony would put Mr. Cook in the same courtroom as rival

Tim Sweeney,

the co-founder and CEO of Epic, who has attended the trial each day.

Mr. Sweeney took the witness stand during the trial’s first week, describing how Epic violated Apple’s app-store rules to show the power the iPhone maker wields. “Apple was making more profit from selling developer apps in the App Store than developers,” Mr. Sweeney testified on the trial’s opening day.

Apple’s stock-market value hit a new record this year, but its longstanding disputes with app developers are bubbling over into public view. WSJ explains why high-profile companies like Epic Games, Spotify and Tinder are at odds with App Store rules. Video/illustration: Jaden Urbi/WSJ

Epic filed its lawsuit against Apple in August after the iPhone maker kicked “Fortnite” out of the App Store for violating its rules. Epic’s team had created an in-app payment system aimed at circumventing Apple’s and sneaked it into “Fortnite” that month.

The legal case has revealed the monthslong efforts by Mr. Sweeney and his team to wage the battle against Apple after years of complaints about its power.

Apple’s lawyers have emphasized Epic’s behind-the-scenes work, including hiring a public-relations firm, as they argue Mr. Sweeney was motivated by attempting to change the terms of Epic’s contract with Apple for something more favorable.

During cross-examination this week, Epic returned the favor, digging into the ways Apple tried to sway public opinion over complaints about its App Store.

Write to Tim Higgins at

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8


Source link








img advertisement