As the Epic vs. Apple trial wraps up, Apple CEO Tim Cook took the stand to give the trial’s most anticipated testimony. After a widely quoted statement that early in the day, Cook testified about Apple’s business in China and its privacy policies.
But some of the toughest questions came from US District Judge Yvonne Gonzalez Rogers, who pressed Cook on Apple’s relationship with its developers. The judge pointed to a survey conducted by Apple indicating that 39 percent of its developers were dissatisfied with the company’s distribution. Given the high number, she asked Cook how Apple has any incentive “to address their needs.”
Cook replied that there was always some “friction” with developers, given the number of apps the company rejects, but that “friction is good for users because it lets them know it’s safe and trusted.” Rogers replied that it “doesn’t seem you feel pressure or competition to change the manner in which you act to address concerns of developers.”
She also said that it was “incredibly significant” that the bulk of App Store revenue and in-app purchase revenue comes from games, saying the gaming industry generates a “disproportionate amount” of revenue for Apple. She pointed to banking apps, like Wells Fargo, which don’t pay Apple other than a yearly developer fee. She asked if gaming apps essentially subsidize all the free apps in the store. Cook disagreed, saying that having a “large number” of free apps helps get more traffic to all developers.
Cook also faced questions on other sensitive issues. Epic’s lawyer asked about Apple’s policies in China, including the fact that Chinese iCloud data is owned by a state-owned company called GCBD. Earlier this week, The New York Times published a into the “compromises” Apple makes in order to operate in China. The CEO was also pushed on Apple’s cooperation with Chinese government requests to remove apps from the App Store. Cook said the company had an obligation to follow the laws of the countries where it operates.
Some moments seemed to stretch credibility, such as when Cook claimed not to know how much Google paid to be the default search engine in iOS, saying “that was probably a better question for them [Google].” The specifics of this arrangement is currently part of a separate from the Department of Justice, which last year said these deals give Google an illegal monopoly of search-related advertising.
There was also a lengthy discussion of the App Store and how much revenue it generates, which has become a throughout the trial. Cook repeatedly said that Apple doesn’t break out the App Store’s financials separately, though he has “a feel” for the numbers. He did acknowledge that the iOS app Store makes “a lot” more than its Mac counterpart, and that gaming apps make the most money. (Earlier in the trial, Epic called an expert witness who testified that Apple’s operating margin for the App Store could be 77.8 percent. Apple disputed that number.)
Cook’s testimony comes as the weeks-long trial wraps up. Closing arguments are slated for Monday, and Rogers said a decision will take “some time,” but will hopefully land by mid-August.
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