Congress has questioned Tim Cook about Apple’s market dominance. Now he’ll be questioned about it in federal court for the first time.
As the company’s high-profile antitrust trial with Epic Games nears an end, the iPhone maker’s CEO is set to take the stand on Friday morning.
The lawsuit revolves around Fortnite, Epic’s hugely popular video game that was kicked out of Apple’s App Store last summer for defying Apple’s digital payment rules by creating its own system. Apple (AAPL) takes 30% of many in-app purchases made on iOS devices and does not accept alternative payment methods. Epic filed a lawsuit against Apple after Fortnite was removed from the App Store.
Epic claims that Apple has monopolistic control over its “walled garden” iOS operating system, which forces app developers to adhere to onerous restrictions in order to reach hundreds of millions of iPhone and iPad users. Apple claims that users can buy apps in a variety of places and that its commission helps the company improve and secure its devices.
Several executives from both sides have already testified, including Apple’s senior vice president of software engineering, Craig Federighi, and Phil Schiller, an Apple Fellow and former longtime head of marketing, who both testified earlier this week. The first witness in the trial, which has lasted nearly three weeks and is set to end on Monday, was Epic Games CEO, Tim Sweeney.
There’s more at stake for Cook and Apple than just this high-profile court case. Cook’s testimony on Friday is expected to set the tone for Apple’s battle against mounting antitrust pressure. Spotify and Match Group, the parent company of Tinder, have both accused the App Store of being anticompetitive. Apple’s rules have also been investigated by regulators in several countries, including the United States and the United Kingdom.
Cook appears to be thoroughly preparing for his day in court, despite his numerous congressional testimony and numerous public appearances and interviews. According to the Wall Street Journal, he has undergone several hours of mock questioning from former prosecutors to simulate what he might face on the stand.
“The thing that’s got to be a little bit scary to Epic is that Tim Cook by reputation is a very persuasive witness,” said Herbert Hovenkamp, a professor of legal studies and business ethics at the University of Pennsylvania’s Wharton School of Business. “He’s doing what he was hired to do, which is make Apple’s case to the public.”
Tim Sweeney (R), the CEO of Epic Games, was the first witness to testify in the blockbuster trial. Tim Cook, the CEO of Apple, is likely to be the last.
Cook will speak about “Apple’s corporate values; Apple’s business and operations; development and launch of the App Store; competition faced by Apple,” according to the witness list provided to the court. Cook is expected to discuss his personal views on security and privacy, which he has previously used to criticize other large tech companies, as well as their importance to Apple’s product philosophy, according to an Apple representative.
Cook is expected to bring together and support arguments made by Apple’s lawyers, experts, and other executives throughout the trial, namely that the iPhone App Store is not a monopoly. The 30% commission it takes on app transactions isn’t illegal, according to the company, and it helps make Apple devices better and more secure, as does the tight control it has over the apps on those devices.
In his testimony, Schiller emphasized how much money Apple spends on research and development — an estimated $100 billion over the last 15 years — in order to improve products that developers can use.
He also attempted to counter Epic’s portrayal of Apple as a monopoly. Apple, according to the gaming company, imposes onerous rules on developers, such as requiring them to use only its App Store and in-app payment methods if they want to reach more than a billion iPhone and iPad users. (Apple’s head of games business development for the App Store, Michael Schmid, testified on the stand that the company has made over $100 million in commissions from Fortnite.)
Google, Samsung, Motorola, Huawei, and even gaming consoles like the Sony PlayStation, Microsoft Xbox, and Nintendo Switch are among the competitors for both mobile devices and app stores, according to Schiller. Apple argues that many of them also take a 30% commission and have similar restrictions on outside apps.
“There are many, many competitors for app distribution,” he said.