Tuesday December 5, 2023

Apple CEO Warns of ‘Toxic Mess’ If Epic Wins

  • Apple CEO Tim Cook took the witness stand in the company's trial against Fortnite-maker Epic Games to defend Apple against antitrust claims.
  • The future of Apple's App Store could hinge on the outcome of the trial.
Robert Deutsch-USA TODAY/Design: Alex Brooks
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Apple CEO Tim Cook took the witness stand on Friday to make the case that Apple is one player in a competitive market, not a monopoly. 

Last August, Epic Games created a collection method for in-app payments in “Fortnite” that circumvented Apple’s 30% fee. Apple responded by removing “Fortnite” from the App Store, prompting Epic to sue.

Earlier in the trial, Apple executive Michael Schmid confirmed that Apple made over $100 million in commissions on “Fortnite” alone

Cook argued that Apple’s management of the app store constitutes a service it provides to customers, not a form of control over app developers.

  • The CEO said that the App Store would become a “toxic mess” if Epic prevailed, and Apple was forced to cease its app review process. “We review 100,000 apps per week, and we reject 40,000.” 
  • Cook pointed out that if the current payment system were dismantled, customers would have to enter credit card information on each app that they wanted to make a purchase, increasing the risk of fraud.

Cook repeatedly dodged attempts by Epic’s lawyer to acknowledge that Apple calculates the App Store’s profits, not just revenue, separately from other parts of its business. 

An expert witness for Epic calculated the store’s profit margin at nearly 80%, which Cook denied. 

Apple has fought hard to protect the status quo of its tech ecosystem, but should Epic prevail, the App Store — and Apple’s business model — could radically change.

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