Cook replied that the bulk of the apps on the App Store are free, so you're right that there is some sort of subsidy there.
San Francisco: Apple CEO Tim Cook faced some harsh questions during the ongoing Epic Games-Apple trial over the removal of Fortnite game from the App Store, but he offered a mild, “carefully tended ignorance” that left several key questions unanswered.
The company called CEO Tim Cook to conclude three weeks of testimony in Epic vs Apple legal battle on Friday and Judge Yvonne Gonzalez Rogers engaged Cook in a surprisingly tense exchange over Apple’s business model, reports The Verge.
When asked what the problem is with allowing users to have choice, especially in a gaming context, to have a cheaper option for content, Cook replied: “I think they have a choice today. They have a choice between many different Android models of smartphone or an iPhone, and that iPhone has a certain set of principles behind it, from safety and security to privacy”.
Rogers then argued: “But if they wanted to go and get a cheaper Battle Pass or V-Bucks, and they don’t know they’ve got that option, what is the problem with Apple giving them that option? Or at least the information that they can go and have a different option for making purchases?”
Cook replied: “If we allowed people to link out like that, we would in essence give up our total return on our IP (intellectual property).”
The much-reported trial between Apple and Epic Games began on May 5, as the companies got involved in a legal battle over the use of an in-game payment system.
While Epic Games argues about Apple’s monopoly over the app market and treats 30 per cent standard fee amount to anti-competitive behaviour that must be regulated by antitrust law, Apple contends that “the whole antitrust allegation and associated dust-kicking is little more than a PR stunt”.
The Fortnite game was removed from App Store in August last year after the company allegedly violated rules by adding an in-game payment system aimed at depriving Apple of its commission on in-app purchases from App Store.
Rogers asked Cook that the gaming industry seems to be generating a disproportionate amount of money relative to the IP that you are giving them and everybody else and “in a sense, it’s almost as if they’re subsidising everybody else”.
Cook replied that the bulk of the apps on the App Store are free, so you’re right that there is some sort of subsidy there.
“However, the way I look at that, Your Honor, is that by having such a large number of apps that are free on the store, it increases the traffic to the store dramatically, so the benefit somebody gets is a much higher audience to sell to than they would otherwise if there weren’t free apps there,” he told the judge.