, testifying on Friday in a trial that could undermine Apple’s efforts to fend off growing scrutiny of its power, defended his business from accusations that it hurt app makers while on the hunt to expand its profits. Mr. Cook, who took the witness stand for the first time as Apple’s chief executive, answered friendly questions from an Apple lawyer and faced pointed questions from an opposing lawyer and the who will decide the case. The trial’s outcome could maintain or upend market. , creator of the popular game Fortnite, is suing Apple, claiming that the iPhone maker has created a monopoly with its App Store and uses that power to take an unfair cut from other companies that rely on the App Store to reach customers.
An Epic victory would invigorate an. Federal and , and the European Union has recently charged Apple with violating antitrust laws over its app rules and fees. Apple faces two other federal lawsuits about its — one from developers and one from iPhone owners — seeking class-action status. Mr. Cook’s testimony came toward the end of a three-week trial in an Oakland, Calif., federal court that has homed in on the power that and the 30 percent commission it takes on sales of most digital goods and subscriptions.
He entered the courthouse on Friday morning from an underground garage rather than its main entrance, which allowed him to avoid photographers gathered outside the front of the building. At aboutt 7:30 a.m., journalists spotted him going through securityand shouted questions. Mr. Cook, wearing a dark gray suit, white shirt, and gray tie, held up his hand in a peace sign. For over an hour, Apple’s lawyer led Mr. Cook through complaints against Apple, allowing him to explain why Apple conducted business a certain way developers.
Mr. Cook testified that Apple faced plenty of competition, and he said commissions that Apple collected from App Store, which one outside expert testifying on behalf of Epic said could be as much as 80 percent.. “There’s a conflict between what the developer and consumer may want,” he said. He added that app-store fees for many developers much smaller than Epic. In a cross-examination, an Epic lawyeraimedm at Mr. Cook’s credibility and questioned why Mr. Cook said he did not know some details of Apple’s business, including the profit margins made from the
Mr. Cook said that was wrong. He said thewas profitable, but Apple had not tried to determine precisely how good, partly because it would be difficult based on how Apple structured its costs. The Epic lawyer challenged that claim, showing Mr. Cook internal Apple the company could calculate the App Store’s profitability. Mr. Cook countered that the records showed incomplete figures. The Epic lawyer then spent time on a topic tangential to the trial but appeared intended to illustrate hypocrisy at Apple: The way the company operates in China, which undercuts Apple’s public enthusiasm for —this week, the New reported that Apple had put its Chinese users’ data at risk and aided the Chinese government’s censorship by proactively removing apps.
The most concerning moment for Mr. Cook and Apple came at the end of his testimony when Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California joined in the interrogation of Mr. Cook. While Mr. Cook said Apple had to follow the laws in China, the Epic lawyer noted that otherpolicies had left the country. “I know of nobody in the smartphone business who’s not selling into China,” Mr. Cook replied.
Throughout the trial, Judge Gonzalez Rogers asked pointed questions of witnesses from both Apple and Epic. On Friday, her back-and-forth with Mr. Cook revealed intense scrutiny of Apple’s arguments. Why couldn’t intellectual property, Mr. Cook replied.owners to have more options to purchase apps, she asked, especially if it meant lower prices for consumers? “If you allow people to leak out like that, we would, in essence, give up our total return on our”
The judge asked whether Apple’s decision last year to reduce its commission on app sales for developers who earned less than $1 million a year was app developers were dissatisfied with how Apple managed the App Store. “It doesn’t seem to me that you feel, again, real pressure or competition to change how you act to address the concerns of the developers,” she said.to deflect scrutiny of Apple’s App Store policies. Mr. Cook acknowledged scrutiny was a factor, but he added that Apple mostly wanted to help small developers affected by a weak economy during the . Judge Gonzalez Rogers then brought up a survey that said 39 percent of
The judge’s biggest challenge in deciding the case may be defining the market that Epic and Apple are fighting over. Epic’s lawyers have argued that the issue is about iPhone apps and that a game maker has to go through Apple’s “walled garden” to reach the more than a who use the devices. That stifles innovation, Epic claims,s and allows Apple to enforce strict rules and harm app developers by charging excessive fees. The company wants to host its digital storefront within Apple.
Mr. Cook said on Friday that he was “not a gamer,” but he argued that Epic distributed its games in several ways, including on, gaming consoles, and personal computers. Many platforms charge a commission similar to that of the . If gaming is the market, Apple has argued, then there are many competitors — like Microsoft, Sony, and cannot have a monopoly. Judge Gonzalez Rogers expressed frustration over the market semantics. “One side will black, the other says it’s white — typically it’s somewhere in the gray,” she said last week.
Earlier in the trial, Trystan Kosmynka, a senior director at Apple, testified that the company rejected 40 percent of total app submissions in 2020. Apple could not effectively police which apps find their way onto iPhones if Epic had its app store, Mr. Kosmynka said. Epic responded with a flurry of internal passed Mr. Kosmynka’s team. One app, released during the Black Lives Matter protests over the summer, was a game that to shoot cannons at protesters.
Apple tried to show why allowing an app store within an app store could be problematic. Its lawyers criticized Epic’s digital storefront for not maintaining tight enough control, had managed to use it to sell games that they called “offensive and sexualized.” To tie Epic to unsuitable content, Richard Doren, a lawyer for Apple, brought up Peely, a cartoon banana in Fortnite that sometimes wears a tuxedo and sometimes goes nude. Mr. Doren implied that displaying Peely without a tuxedo in a would have been inappropriate. Matthew Weissinger, at Epic, clarified that Peely, naked or suited, was not scandalous.
“It’s just a banana, man,” he said. The fight between the companies began in August when Epic violated removed Fortnite from the App Store, and Epic immediately sued the company and began a promotional campaign around the suit. On the first day of the trial, Epic’s chief executive, Tim Sweeney, testified that his company had filed the lawsuit to show the world the consequences of Apple’s policies. Judge Gonzalez Rogers interrupted to ask whether Mr. Sweeney had known about a different developer’s lawsuit against Apple.system in the Fortnite app. Apple
Mr. Sweeney said he had. “And you just ignored that and went alone,” the judge responded. The trial will wrap up on Monday, butwould probably take months. “Hopefully, before Aug. 13,” she said. She also said her decision would likely be appealed, meaning the trial could be just the first chapter of a longer fight.