Cook appeared in court for the first time to defend Apple: the Commission is only for better service to users, and it has nothing to do with making money

0
171

Key points
Cook said he would not trust any company other than apple to censor the software. When asked if he would allow third parties to analyze apps on the app store, he gave a negative answer.
Cook tried to defend apple, saying that its commission is only for better service to users and has nothing to do with making money, hoping to avoid accusations of abusing its market dominance.
Apple’s entire business model has attracted attention in the trial. If it loses the lawsuit, Apple may be forced to open its lucrative app store, allowing users to download software to mobile phones in a variety of ways, bypassing the 30% commission Apple charges.
Tencent technology news on May 22, US local time on Friday, Apple CEO Tim Cook appeared in court for the first time to testify in the trial of Epic Games v. Apple antitrust case. Cook tried to defend apple, saying that its commission is only for better service to users and has nothing to do with making money, hoping to avoid accusations of abusing its market dominance.
When questioned by Apple’s lawyers on the day of the trial, Cook claimed that Apple’s mission is to “make the best products in the world and truly enrich people’s lives.”. He also mentioned that the company has invested tens of billions of dollars in research, privacy and security, “and we are very concerned about the well-being of our users.”.
Cook’s appearance in court means that the high-profile anti-monopoly trial is coming to an end. At the heart of the lawsuit is Epic Games’ popular video game, fortrite. Last summer, the game was removed from Apple’s app store for ignoring Apple’s rules on digital payment and establishing its own payment mechanism. The move prompted Epic Games to sue apple. Apple gets a 30% share from many in app purchases on IOS devices, and doesn’t allow other payment systems.
Epic Games accused apple of monopolizing its “walled garden” style IOS operating system, saying that if app developers want to reach hundreds of millions of iPhone and iPad users, they must accept Apple’s heavy restrictions. Apple argues that users can also buy apps in several other places, and Apple’s Commission helps the company design its devices better and more secure.
Cook was the last apple executive to testify in court. Earlier this week, Craig federighi, Apple’s senior vice president of software engineering, and Phil Schiller, a longtime marketing director, appeared in court. Tim Sweeney, chief executive of Epic Games, was the first witness to the trial, which lasted nearly three weeks and will end on Monday.
In his testimony, cook referred to well-known themes that Apple executives and lawyers have been emphasizing throughout the trial, including the company’s products and services that put privacy and security first and foremost, and its competition with many other companies in the smartphone and app market.
Asked about taking fortress night off the app store and its “malicious” behavior, Cook said Apple would welcome it back to Apple devices if the game complied with the rules. He was also asked if Apple received more than $100 million in commission from the sale of “Fortress night.” Cook said that Apple focused on providing the best service to users, rather than getting any economic benefits. “Users are sandwiched between the two companies, it’s not about money,” he said
Emphasize the importance of security and privacy
Apple lawyer Veronica moye of Gibson, Dunn & crutcher first questioned cook about the importance of privacy and security. Cook painted a bleak picture of what the platform would look like if the iPhone were as open to third-party software as the MAC desktop. He pointed out that the app store “still needs the support of human judgment.”.
Cook also talked about the importance of app store privacy “nutrition labels” to protect users. In December 2020, apple added the content disclosed by these developers to the list of product pages in its iPhone and iPad app stores. But many of the labels are false, and the chairman of the house energy and Commerce Committee has written to Apple urging it to improve the labeling function.
What’s striking about this trial is the way apple looks at security. We know that apple is marketing its products as safe, but it turns out that Apple’s vision goes beyond that. Apple’s security experts and executives have made it clear that, in short, they believe that the only computers that are safe are those where Apple employees personally review every piece of software. Craig federighi, Apple’s senior vice president for software engineering, even criticized the Mac’s security, saying the number of malware was “unacceptable.”. The reason is that Mac users can download software that has not been censored by Apple employees.
Cook highlighted the point in the witness stand on Friday. He said he would not trust any company other than apple to censor the software. When asked if he would allow third parties to analyze apps on the app store, he gave a negative answer.
Before he was questioned by judge Rogers, cook testified on Friday that Apple also faces fierce competition in the field of smartphones. In the United States, the iPhone’s market share is only 30%, and the international market share is about 15%. However, cook’s data on Apple’s mobile phone market share is obviously lower than many external estimates. For example, according to a recent report by counterpoint research, the proportion is between 40% and 65% based on the quarterly situation since 2019.
The app store was acknowledged to be profitable, and no specific figures were disclosed

In November 2020, Apple announced a plan to allow small developers with annual revenues of less than $1 million to apply for a reduction in app store sales commissions from 30% to 15%. Apple said novel coronavirus pneumonia is a way to provide relief for small businesses during the new crown pneumonia outbreak. On Friday, cook reiterated that view.
However, Epic Games said many of the internal documents it found showed that Apple had taken antitrust review and investigation into account when making the decision, and had not found any documents discussing the epidemic. Moreover, the decision will hardly affect Apple’s revenue. Cook said on Friday that the antitrust review “did come to mind, but the main reason was the impact of the epidemic.”
Apple charges developers up to 30% commission on sales in the app store. Many app developers want to bypass the Commission and guide customers to buy outside the app store. Cook defended the practice in the witness stand, saying: “it’s similar to Apple advertising best buy and persuading you to buy an iPhone at the apple store across the street.”
Epic Games lawyers showed some of Apple’s internal documents, showing that Apple executives are discussing the app store’s profitability. Cook explained that the documents were basically informal discussions and that he would not use them to make business decisions. However, he does admit that the app store is profitable. As for how he knew, cook called it “intuitive.”.
Cook accepted a question from Epic Games lawyer Gary Bornstein about Apple’s targeted advertising business. Bernstein asked cook about the data Apple collected. Bernstein made the assumption that, in theory, there might be other competitors’ app stores that collect less data than apple, thus creating a more private app store than apple. “I think we usually collect as little data as possible,” Cook said
Cook said in his testimony Friday that he was not a gamer. When Apple lawyer Moyer asked him if he was familiar with the game streaming service, he said, “in a way, I’m not a gamer.” He agreed that game services are competitors for games in the app store, and Epic Games is a competitor for Xbox and PlayStation. His response led many on social media to joke about the fate of apple arade, Apple’s game subscription service launched in 2019.
Fierce confrontation with the chief judge
The trial of Epic Games v. apple is the most important moment so far. Yvonne Gonzalez Rogers, a U.S. district judge, countered Apple’s many defense reasons in this case and put a lot of sharp questions to cook. Epic Games accused apple of monopolizing the operation of its app store and abusing its power to lock app developers in its closed system.
Rogers first targeted the business model of Apple’s app store and questioned cook that a large part of the platform’s revenue came from the game industry. She points out that video game players seem to be subsidizing other app developers: “you’re subsidizing gamers to subsidize Wells Fargo.”
Rogers also asked cook if he thought the basic idea of competition was good. Cook acknowledged, adding that Apple faces fierce competition. “You don’t compete for in app purchases,” Rogers responded Cook countered that gamers could choose to shop on Playstation or Nintendo.
Rogers later turned to the survey evidence provided by Epic Games, which showed that 39% of developers were dissatisfied with the app store. “It seems to me that you don’t feel any pressure or competition and you don’t really need to change the way you act to address the concerns of developers,” she said She seems to be challenging Apple’s key assertion that the company is in fierce competition with Google Android and game console companies such as Playstation and Xbox, including attracting developers to Apple’s operating system.
Losing the lawsuit may cause serious consequences
While it’s impossible to predict how Rogers will rule, her harsh trial showed that she questioned at least some of Apple’s arguments. Apple’s entire business model has attracted attention in the trial. If it loses the lawsuit, Apple may be forced to open its lucrative app store, allowing users to download software to mobile phones in a variety of ways, bypassing the 30% commission Apple charges.
Cook’s testimony came at the end of the landmark trial, which is expected to end next Monday. Rogers said she hopes to reach a verdict in mid August, which means there is no jury. This is the most concerned monopoly case of a technology giant since Netscape sued Microsoft more than 20 years ago and Bill Gates, then chief executive of Microsoft, testified.
Like other Silicon Valley executives, cook has faced questions at congressional hearings in recent years, and he has had to defend Apple’s way of doing business. Last summer, he attended a congressional hearing with other technology executives, when lawmakers questioned them about their company’s market influence. But it was his first recent appearance in court and he was forced to answer questions and be cross examined.
Herb hovenkamp, an antitrust professor at the University of Pennsylvania School of law, said judges sometimes try to use tough questions to make both sides feel that they might lose the case, prompting them to settle. “If Apple is sure it will win, it may not be willing to reconcile,” he said. On the other hand, if the judge exerts enough pressure, it may bring both sides back to the negotiating table. ”
Is apple a liar?

Lawyers for Epic Games have questioned the credibility of Cook’s affidavits, including several statements that contradict Apple’s internal documents and his own pre-trial testimony. A typical example is Apple’s “small business plan”, which reduces the Commission of developers earning less than $1 million in the app store to 15%.
Apple praised the move as a way to help small businesses during the epidemic. But internal documents show that Apple executives believe the move is to divert legislators and regulators from examining its suspected anti competitive behavior. Apple did not provide any documentation to show that the epidemic was a factor in its small business plan.
Although executives such as Phil Schiller and cook, who run Apple’s app store, vowed that the epidemic was the main driver of the decision. But Rogers seemed to disagree, saying: “it seems to be the result of pressure from investigation or litigation, not the epidemic.”
In any case, no matter what causes apple to change its fees, “it’s not out of competition,” Rogers said. He said that one of the important legal arguments of Epic Games in the lawsuit is that Apple has few competitors in the mobile operating system IOS. Epic Games believes that Apple illegally forces app developers to use two different services, namely, Apple’s app store and its payment processing system, which is the so-called “in app purchase”. According to the anti-monopoly law, it is illegal for monopolists to bundle one product or service with another.
One of the arguments of Epic Games about Apple’s abuse of monopoly power is that the app store has strong profitability. The company quoted Steve Jobs, Apple’s co-founder, when he launched the app store in 2008, as saying that the company’s goal is not to make a profit, but to make ends meet and earn enough money to keep the app store running. But Epic Games believes that app stores are now making huge profits.
In court on Friday, cook insisted that apple did not track the profit and loss of its app store. But the documents presented by Epic Games’ legal advisers prove that Apple actually discussed the issue internally. Cook met with Luca Maestri, Apple’s chief financial officer, to discuss app store profitability, according to a document. In response, cook’s view is that, while the company may perform information calculations, it doesn’t track it carefully enough to understand the full cost of running the app store.
Cook sometimes seems to use the excuse of not knowing the key aspects of Apple’s business. For example, he doesn’t remember the exact fee Google paid apple to keep the iPhone as the default search engine. “Don’t you know if it’s more than $10 billion?” epic’s lawyer asked “I really don’t know,” he said
Cook disagreed with Google paying apple to ensure its default search engine status. He first said it was for the search itself, and then said he really didn’t know why Google paid apple. Cook later also said that he did not understand the basic situation of Apple’s advertising business´╝ł Tencent technology reviser / Jinlu)