United States District Judge Yvonne Gonzalez Rogers needles Apple CEO Tim Cook on why the iPhone maker will not give users the option to buy lower-priced virtual goods and content directly from developers.
21 May 2021
Apple Inc.’s chances of winning an antitrust trial brought by Epic Games Inc. appeared less certain Friday after the judge grilled chief executive officer Tim Cook over whether his company runs its app marketplace in a competitive way.
U.S. District Judge Yvonne Gonzalez Rogers needled Cook on why the iPhone maker won’t give users the option to buy lesser-priced virtual goods and content directly from developers — and only allows purchases through Apple’s own App Store, an issue at the heart of the case.
In his first time testifying in a trial, Cook answered questions for more than two hours in federal court in Oakland, California, as a three-week trial in the high-stakes battle between the companies winds toward its close.
“What is the problem with allowing users to have choice, especially in the gaming context, to have a cheaper option for content?” Gonzalez Rogers asked.
Cook, who faced intense questioning from the judge in his final minutes on the witness stand, said that consumers “have a choice today” of buying cheaper Android phones over iPhones.
Gonzalez Rogers pressed Cook further by asking him “what is the problem with Apple” if users wanted an option of paying less outside the App Store to buy V-Bucks, the in-game currency used in Epic’s blockbuster Fortnite game.
“We would in essence give up our total return on our IP,” Cook responded, referring to the company’s proprietary intellectual property.
Epic sued in August after Apple pulled Fortnite from the App Store because the developer had created a workaround so it wouldn’t have to continue paying a 30% fee on customers’ in-app purchases. Epic claims App Store policies hurt developers and thwart competition.
Cook, a soft-spoken 60-year-old who has been CEO since 2011, pushed back against Epic’s claims that the App Store juices profits with unfair and self-serving policies.
Cook testified that it would be “terrible” for iPhone and iPad users if the judge ordered the company to allow third-party app marketplaces, in addition to its own App Store, as Epic is demanding.
“It would be a huge convenience issue, but also the fraud issues would go up” because customers would have to enter credit-card information multiple times, Cook said.