Tim Cook, the CEO of Apple, described the ironclad control of the company over its app store as the greatest way to protect and serve iPhone users, but he faced hard questions about the issues of the competition from a judge on Friday about claims he oversees an illicit monopoly. The rare court appearance of Cook came during the closing phase of around twenty days trial revolving around an antimonopoly case brought by Epic Games, manufacturer of the popular video game Fortnite.
Epic is trying to tumble the so-called Walled Garden for iPad and iPhone apps that welcome developers and users while locking out competition. Steve Jobs created an app store one year after the iPhone’s debut in 2007, and it has become a key revenue source for the company, helping to generate a $57 billion profit for Apple in its last fiscal year.
The app store trial focuses on the dispute of Epic that Apple turned its store into a price-extorting vehicle that not only obtains a fifteen percent to thirty percent commission from in-app transactions but bans apps from offering other payment alternatives. That blockage extends to displaying a link that would open a web page having options of commission-free ways to pay for in-game items, subscriptions, and other related tasks.
Cook Defended his Position during the Testimony
Under friendly inquisitorial from an Apple lawyer, the CEO delivered elegant remarks that occasionally expressed like a commercial for the Apple products, including iPhone. However, the normally calm Cook sometimes seemed nervous while being grilled by Gary Bornstein, the Epic lawyer. His nervousness was specifically evident when asked about the level of profits in an app store that jobs originally thought would be lucky to break even.
Cook looked to stumble to some extent again when Bornstein opposed him about an agreement in china that could comprise user privacy, even as the tech giant maintains top priority to protect the personal information of its customers. However, the CEO never wavered during approximately four hours of demonstration from his position that the grip of Apple on the app store helps the company to keep things simple for a loyal customer base that purchases iPhones knowing they were getting something that just works appropriately.
Apple’s CEO said that users buy into a complete ecosystem when they buy an iPhone, which wore a face shield, but no face mask in the courtroom of Oakland, California that limited access because of the coronavirus pandemic. Everything was not obvious that the federal judge who will decide the Cook case was purchasing everything the CEO said on the stand.
Why can’t Apple allow Rival Stores?
After the questioning of lawyers, Yvonne Gonzalez Rogers, the United States District Judge, asked why the tech titan can not allow its rival stores from offering an in-app transaction option on iPods, iPads, and iPhones that might charge lower commissions. It is something Epic is struggling to make it happen, partially because it still has an unprofitable app store that enforces a twelve percent commission.
Rogers seemed specifically troubled because a survey representing thirty-nine percent of iPhone app developers is not happy with the present distribution system. Additionally, the judge doubted the fairness of a commission system requiring the manufactures of video games to pay the bulk of the commissions. On the other hand, digital services offered in other industries such as banking do not pay anything, even though banks are using the technology that powers iPhones.
Apple’s CEO agreed about the support, but he insisted that there is still a fair balance because video game manufacturers are able to reach a broader audience of consumers who become players while visiting the app store looking at other apps. Additionally, Cook took issue with the idea that most app developers are unhappy with the current setup of the store.