Tim Cook, the chief executive of Apple, took the stand on Friday as the star witness in a high-stakes case brought by Epic Games that could upend the company’s business model.
The trial stems from an antitrust lawsuit filed last year by Epic Games, the maker of the wildly popular video game Fortnite. The game became the most popular in the world in recent years, generating more than $9bn total for Epic in 2018 and 2019.
Epic is challenging Apple over how much of that profit it gets to cash in on, trying to prove that the way the tech giant runs its App Store amounts to a monopoly. The App Store is the only way for people to install apps and software on their iPhones and iPads, and Apple charges app makers a commission of up to 30% on in-app transactions.
In his testimony on Friday, Cook reiterated Apple’s argument that the strict App Store policies that critics argue have made the platform a walled garden, are for the safety and privacy of users.
Cook said Apple must closely review the apps on its App Store for privacy and security purposes and that he would not trust any third-party firm to vet apps for the App Store.
“In the case of the App Store, we review every app that goes on the store,” he said. “There can be malicious things that occur, things that vacuum up people’s data, malware, the list is pretty long.”
The court battle Cook arrived at on Friday marks the latest in a high-profile fight between a game giant and one of the biggest technology companies in the world. Fortnite first challenged Apple by knowingly violating its in-app policies in August 2020 and launching its own in-app payment system that bypassed Apple’s 30% fee. Apple responded to this by pulling the Fortnite game from the App Store, leading Epic to launch a crusade against Apple that brought on board allies including Spotify, the Tinder owner Match Group, and other companies that oppose the App Store’s rules.
Cook reportedly prepared extensively for his highly anticipated testimony, his most detailed public remarks yet on the App Store, which anchors Apple’s $53.8bn services business.
Apple has brushed off the allegations as an attempt by Epic to boost its own profits. Apple says the commissions it takes from app-makers help it pay for the technology powering its products, including the security and privacy protections that have helped make the iPhone so popular.
Cook defended the commission Apple takes on in-app purchases, which can be up to 30% for apps with more than $1m in yearly revenue. He said many apps are charged less, and that if it didn’t charge a commission Apple would need to find an alternative way to make up processing fees and other costs.
“We’d have to come up with an alternate way to collect commission,” he said. “I strongly believe [the in-app purchase fee] is the most efficient way.”
The trial, which began earlier this month, is taking place in an Oakland, California, court under the US district judge Yvonne Gonzalez Rogers, and Cook’s testimony will come before closing arguments from both sides on Monday.
Epic’s lawyers have been grilling Apple executives, including Phil Schiller, Apple’s former marketing guru and a Steve Jobs confidant who took the stand on Monday and Tuesday. Apple’s software chief, Craig Federighi, took the stand on Wednesday to discuss the various ways the company insulates its products from hackers.
Apple’s App Store is a major contributor to the profit growth that has helped give Apple its current market value of nearly $2.1tn.
But just how much money Apple makes from the App Store has remained a heated point of contention during the trial.
Schiller conceded during his testimony that the California-based company had pocketed at least $20bn from it through June 2017, based on calculations from figures publicly released at that time. Cook acknowledged it is likely the App Store is profitable, but maintained Apple does not study just how much money it brings in.
“We haven’t done that, but I have a feel for it, if you will,” he said.
The Associated Press contributed to this story