Apple's Chief Executive Officer Tim Cook said it would be “terrible” for iPhone and iPad users if a judge ordered the company to allow third-party app marketplaces, in addition to its own App Store, as Epic Games Inc. is demanding in a high-stakes
“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 testified Friday in Oakland, California, as a three-week trial winds toward its close.
Easing up on Apple restrictions that block alternative app stores would also require Apple to figure out an alternate way of collecting commissions it charges developers for in-app purchases, Cook said. Apple would then have to “chase” down developers, which “seems like a process that doesn’t need to exist,” he said.
Epic sued in August after Apple pulled Epic’s Fortnite game 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.
Apple makes decisions in the best interest of its customers, Cook said. “I think it’s important to know sometimes there’s a conflict between what the developer may want and what the user may want,” he said.
Cook said the number of developers and competition on the App Store have driven down the price of software, and provided users with millions of choices of apps for their iPhones and iPads. Cook said the vast majority of app developers pay 15% commissions to Apple, not 30%.
When asked by Apple attorney Veronica Moye about the App Review process, Cook said he Apple does a far better job vetting apps for iPhone and iPad users than third-party companies. Third parties “are not as motivated” as Apple to protect users against malicious malware, Cook said. “For us, the customer is everything.”
The App Store had operating margins of almost 78% in fiscal year 2019, according to testimony from Epic’s expert witness that was based on documents obtained from the iPhone maker.
Cook insisted that those calculations are inaccurate because Epic’s expert witness used data on profit margins that applied not only to the iOS app store on mobile devices but also the Mac app store.
The App Store is profitable, but the company hasn’t broken down how profitable, Cook said. “We haven’t done that,” he said. “But I have a feel, if you will,” he said.
The trial has drawn interest across Silicon Valley, with everyone from Microsoft to Nvidia weighing into the fight.
