As Apple and Epic make their closing arguments, a look back at the judge's pointed questioning of Cook on Friday that touched on App Store's lack of competition

Judge Yvonne Gonzalez Rogers, who is presiding over the Epic v. Apple antitrust trial, saved her best for last.

Protocol 2021-05-24 Nick Statt

Context & Ripple Effects

The dispute entered closing arguments after a trial framed around what market Apple and Epic are actually contesting, a question revisited on the trial’s final day. Earlier testimony also put exclusivity in the record when Epic’s Tim Sweeney said he would have accepted an exclusive App Store arrangement.

Judge Yvonne Gonzalez Rogers’s questioning of Tim Cook brings the court’s attention to the App Store’s competitive alternatives, sharpening the issue that will govern how the parties’ arguments are assessed.

First-order effects

Apple must reconcile its App Store defense with the judge’s direct concern about a lack of competition, while Epic can emphasize that exchange in its closing case.
The court now has a record centered on market definition, App Store distribution terms, and Apple’s explanation of competitive choice.

Second-order effects

How the court defines the relevant market will determine whether Apple’s App Store rules are assessed against broader device and gaming alternatives or against app distribution on Apple devices.
A ruling that treats Apple’s control over iOS app distribution as the central market would strengthen developers’ challenges to App Store restrictions; a broader definition would reinforce Apple’s defense.

Third-order effects

The case tests whether mobile-platform operators can pair device ecosystems with exclusive software distribution without that structure itself establishing gatekeeper power.
If courts increasingly scrutinize the competitive choices inside a platform rather than only alternatives outside it, app-store governance becomes a more consequential antitrust boundary.

The trend: The Epic v. Apple case is an early test of whether platform gatekeeper power is measured at the ecosystem level or at the point where developers reach users.

Discussion

@protocol @protocol on x
Judge Yvonne Gonzalez Rogers got Cook to admit that gaming, and in particular in-app purchases for mobile games on the iPhone, generate the majority of the App Store's revenue. https://www.protocol.com/...
@jeremiahlee Jeremiah Lee on x
This judge sounds amazing. “You're charging the gamers to subsidize Wells Fargo.” https://twitter.com/...
@nickstatt Nick Statt on x
Here's @thedextriarchy with the full transcript of the judge and Tim Cook's back-and-forth today in the final day of Epic v. Apple, and it's worth reading. No one will likely get as prime an opportunity to question Apple about its business model for years to come. https://twitter…
@nickstatt Nick Statt on x
Here's my story on the fireworks in the final 10 minutes of Tim Cook's testimony, and what it tells us about how Judge Yvonne Gonzalez Rogers may rule in Epic v. Apple https://www.protocol.com/...
@protocol @protocol on x
Judge Yvonne Gonzalez Rogers, who is presiding over the Epic v. Apple antitrust trial, saved her best for last. https://www.protocol.com/...
@nickstatt Nick Statt on x
That's it for the courtroom play-by-play as Epic v. Apple trial is scheduled to end on Monday after both sides effectively give closing arguments and hand it off for the judge to decide. But we may not get a verdict for months. 😬https://twitter.com/ ...
@keleftheriou Kosta Eleftheriou on x
Cook said Apple needs to get a return on its intellectual property investment, and that's essentially why the App Store takes 30%. Only problem, he won't tell us how much that investment is 🤷 https://www.protocol.com/...
@nickstatt Nick Statt on x
So to summarize, Judge Gonzalez Rogers has really narrowed in on the rules against telling customers of cheaper options and appears to think Apple does this for financial gain, giving us our best idea yet of how she may rule in this case.
@jacobwolf Jacob Wolf on x
Judge Yvonne Gonzalez Rogers just said to Cook that the game developers are the one retaining users on apps, not Apple. Yet Apple is making a profit off in-app purchases made in mobile games like Fortnite. Seems like the judge is starting to really form her opinion here.
@stephennellis Stephen Nellis on x
2/ But really pressing Cook over whether Apple generates disproportionate profits *from game developers* and *relative to all other developers* suggests she might not view Apple as in the clear if the market is games.
@stephennellis Stephen Nellis on x
3/3 Similarly, Epic didn't lean super hard on the notion that Apple faces no competition to keep developers happy, but Judge YGR also pressed Cook there. While judges always ask tough questions, these were qualitatively different than what she asked Tim Sweeney.
@stephennellis Stephen Nellis on x
1/ One of the reasons Judge YGR's line of questions was so interesting: Apple *wants* her to consider game transactions as the relevant market. The prevailing view has been that if Apple wins on market construction claims, they are largely out of the woods on the rest.
@markgurman Mark Gurman on x
This doesn't sound good for Apple right now. The judge is questioning in app purchase and Apple's business model. She also doesn't believe Apple launched the 15% program because of Covid. Keep in mind this is the last word from a major witness to the judge too.
@reckless Nilay Patel on x
The judge in Epic v Apple just torched Tim Cook and said Apple didn't really feel any competition for developers. A wild development on the last day of testimony in this trial. @thedextriarchy reports: https://www.theverge.com/... https://twitter.com/...
@carnage4life Dare Obasanjo on x
Astute of the Epic vs Apple judge to point out this weirdest aspect of Apple's 30%. Gamers (and dating apps) are pretty much subsidizing everything else on the App Store. It's inevitable that Apple will ask for their cut from ads supported business arguing privacy or fairness. ht…
@reckless Nilay Patel on x
I have no idea if Epic will win or lose but the judge's questions to Tim Cook right now are as pointed as it gets https://twitter.com/...
@marcoarment Marco Arment on x
I DON'T want alternative app stores or sideloading on iOS. That'll make the platform much worse. I want in-app purchasing for digital goods to have the same rules as physical purchases. And if Apple continues not to bend on the latter, governments may soon force the former. https…
@thedextriarchy Adi Robertson on x
“Also we would have to come up with an alternate way of collecting our commission,” Cook says. “We would then have to figure out how to track what's going on and invoice it and then chase the developers; it seems like a process that doesn't need to exist.”
@keleftheriou Kosta Eleftheriou on x
Tim Cook: “Privacy!” Also Tim Cook: “We'd need to track what's going on between developers and their own users in order to collect our commission”. 👏 https://twitter.com/...
@bdsams Brad Sams on x
Tim Apple says he doesnt know if the app store makes money or not (╯°□°） ╯︵ ┻━┻ https://twitter.com/...
@marcoarment Marco Arment on x
Apple has become many of the monsters they previously fought against. The worst bullies are people who've been bullied themselves and later gain power of their own. They always view themselves as the underdogs and never see the monsters they've become. https://twitter.com/...
@gruber John Gruber on x
@marcoarment I think games should be an exception. They're already addictive / slot machine-like. Apple's role in facilitating and profiting from these game IAPs demands (and has gotten) serious criticism. But Apple is, on the whole, applying brakes. Take those brakes off — it'll…
@tolmasky Francisco Tolmasky on x
Tim really blew it here. Missed a great product tie-in opportunity to be like “Well, let me just check THE WALLET APP to get a comprehensive look at our financials. You know judge, with Apple Pay you can...” https://twitter.com/...
@herrmanndigital David Herrmann on x
He is a gamer, a gamer of my emotions https://twitter.com/...
@keleftheriou Kosta Eleftheriou on x
Timothy over here wanting to implant an AirTag on each developer and use Find My $. “You can run, but you can't hide!” What a time to be alive. https://twitter.com/...
@justinschuh Justin Schuh on x
Given the final minutes of the Epic v. Apple trial, I'm wondering if Epic may actually break open the App Store payment monopoly. Would also be interesting to see how this applies to Apple's recent moves to similarly monopolize in-app advertising. #IANAL https://www.theverge.com/…
@html5test Niels Leenheer on x
Apple has become a worse monopolist than Microsoft has ever been. Microsoft did a lot of bad stuff during the 90s, but never thought they were owed 30% commission on all business generated through Windows. https://twitter.com/...
@bryfitz Brian Fitzgerald on x
Tim Cook takes the stand in the Apple vs. Fortnite case. I honestly thought this would settle before it came to this. https://www.wsj.com/...
@riptari @riptari on x
“Asked if it was upward of $10 billion, Mr. Cook said he didn't know.” Um. He didn't know?? How can Cook, CEO of Apple, not KNOW if Google gives more or less than $10BN to make its search iOS' default? Are we rly supposed to believe such a massive detail is beneath his pay grade?…
@roncharles Ron Charles on x
Apple CEO Tim Cook: “We're not thinking about the money at all, we're thinking about the user.” Right. https://www.wsj.com/...
@khaost Khaos Tian on x
lol Apple think even if they allow other payment methods, they are still entitled to get a cut for transactions happened within an app 😛 https://twitter.com/...
@nolookshot Nate Sullivan on x
To me, this has always seemed like the most reasonable, market-friendly end state. The “can iOS continue be the walled garden it's customers keep choosing” question is separate from “can apple exploit the walls of said garden to aggressively rent-seek”. Should be (1) yes, (2) no.…
@seyitaylor @seyitaylor on x
Apple wants commissions even if devs use other payments system? 😂🤭🥲 https://twitter.com/...
@fahrni Rob Fahrni on x
This just sounds really bad. Microsoft, for instance, loves developers. They encourage them to build apps. You can but don't have to sell them through Microsoft. Apple really hates developers. Seriously. They hate us. Everything they say is “we've done this for you.” https://twit…
@danielpunkass Daniel Jalkut on x
Is Tim Cook not aware ... that the Mac is also a platform that Apple owns completely, yet they don't exact a “commission” from every dollar every company makes with a Mac? (Not to give him any ideas ...) https://twitter.com/...
@bzamayo Benjamin Mayo on x
Don't worry if Apple's grip on in-app purchase is outlawed they'll just find a slightly more indirect way of getting the same money https://twitter.com/...
@stroughtonsmith Steve Troughton-Smith on x
‘But Epic just want their own App Store’ One of the major contributing factors to the success of iPhone & the technological revolution it sparked is how Apple wrested control away from the carriers — ‘orifices’ as Steve Jobs called them. Apple has become the orifice.
@megan_nicolett Megan Farokhmanesh on x
tim cook having to utter the words “I'm not a gamer” on record is why the epic v apple trial is good
@stephennellis Stephen Nellis on x
Cook says he doesn't remember the exact number of dollars Google pays to be the default search engine on the iPhone and says he doesn't know if the DoJ estimate is correct. He also says he doesn't know why Google did the deal. “You would have to ask them what they pay for.”
@bdkjones Bryan Jones on x
That @tim_cook had no idea 40% of his developers are “very dissatisfied” with Apple goes a long way towards explaining why Apple's developer relations are so godawful. https://www.theverge.com/...
@mims Christopher Mims on x
Epic cites internal emails claiming Apple makes an 80% profit margin on its app store. Tim Cook says that doesn't reflect the full cost of running it. https://www.wsj.com/...
@mims Christopher Mims on x
“Apple reviews about 100,000 apps a week and rejects about 40,000 for various reasons,” says Tim Cook https://www.wsj.com/...
@reckless Nilay Patel on x
Mask off https://twitter.com/...
@bhansmeyer Becky Hansmeyer on x
Timothy. No. Just...no. I feel like this is the most bonkers quote to ever come from an Apple exec's mouth but I'm sure I'm forgetting something. https://twitter.com/...
@blaw @blaw on x
Apple does a far better job reviewing apps for iPhone and iPad users than third-party companies, CEO Tim Cook testified in a high-stakes antitrust battle with Epic Games. https://blawgo.com/w4lcdNZ
@thedextriarchy Adi Robertson on x
Last day of Epic v. Apple testimony starts in 20! Apple is calling Tim Cook to bring its side home, with a brief followup by Apple's expert infosec witness Aviel Rubin. https://twitter.com/...
@stephennellis Stephen Nellis on x
Cook on the stand answering questions about App Store curation and approvals: “We're not making a moral judgement on them, if that's what you're asking” Here are the App Store review guidelines, where the first rule is about “objectionable content” https://developer.apple.com/ ..…
@kairyssdal Kai Ryssdal on x
I call bs. Again. https://twitter.com/...
@kantrowitz Alex Kantrowitz on x
Man this is ridiculous https://twitter.com/...
@mattyglesias Matthew Yglesias on x
I haven't written about this much but I think Apple's app store rent-extraction has passed into “worse than a crime” territory and a better CEO would just not do it.
@thurrott Paul Thurrott on x
“In his Epic v. Apple trial testimony, Tim Cook offered a carefully tended ignorance that left many of the lawsuit's key questions unanswered, or unanswerable” Translation: He lied on the stand, then.
@bzamayo Benjamin Mayo on x
I can't believe that Apple keeps testifying that it doesn't know how much profit it makes from the App Store. It's just an insane declaration. On financial statements, Apple publicly reports Services business with ~63% margins. App Store is most of that. Done.
@shiraovide Shira Ovide on x
ahahahahahahahha. Ok, sure. https://www.nytimes.com/... https://twitter.com/...
@demeryuk Daniel Emery on x
Tim Cook claiming he does't know if the Apple Store makes a profit is the most brazen and unbelievable thing I've ever heard in a hearing.
@iyengarish Rishi Iyengar on x
“It has nothing to do with money.” Tim Cook presented Apple as a principled company obsessively focused on benefiting its users in his first-ever court appearance this morning. https://www.cnn.com/...
@rleverafp Rob Lever on x
Apple's @tim_cook says App Store would be ‘toxic’ mess without control, gets harsh questions from judge in #epicvapple trial https://news.yahoo.com/... via @YahooNews #AFP
@susanlitv Susan Li on x
After 3 hours on the stand with a small break📱 #Apple CEO #TimCook flashes the peace sign ✌️ just like he did heading in! No smoking guns with some pointed back and forths with #Epic #fortnite lawyers 1st time on the witness stand in a courtroom for $aapl boss uneventful https://…
@shannonpareil Shannon Bond on x
Tim Cook defended against accusations that Apple's an illegal monopoly, via its tight grip on apps & purchases in its App Store. The judge sounded skeptical: “The lack of competition on the 30% [commission Apple charges] is something that is troubling.” https://www.npr.org/...
@geoffreyfowler Geoffrey A. Fowler on x
I just spit out my coffee at this: Lawyer: What's it like to try to switch from an iPhone to Android? Tim Cook: “It's gotten much easier.” I would love watch Tim try to move all his iPhone data to a Samsung phone! I've lost whole days trying. https://www.washingtonpost.com/ ...
@geoffreyfowler Geoffrey A. Fowler on x
It's incredible to hear Tim Cook argue the iPhone App Store faces competition from app stores on ... other devices. https://www.washingtonpost.com/ ...
@martinsfp Martin Sfp Bryant on x
And “carefully tended ignorance” will have been exactly what his lawyers were going for. https://twitter.com/...
@drbarnard David Barnard on x
I suppose this boils down to Cook just not being as knowledgable about the App Store and all the nuance. Schiller was not only heavily involved since before the App Store even launched, but has been the Apple exec most engaged in every aspect of the App Store these past 13 years.
@drbarnard David Barnard on x
Schiller got away clean, but Cook is coming off terribly under cross examination. Sure seems like he's lying about not being aware of certain things, flat out denying things that require nuance to deny, etc. https://twitter.com/...
@patrickmcgee_ Patrick McGee on x
“Carefully tended ignorance” is very well put. https://twitter.com/...
@patrickmcgee_ Patrick McGee on x
Apple's lawyer tried to introduce a news article today regarding @Snapchat saying they are fine paying the 30% commission. The judge wouldn't allow it.
@patrickmcgee_ Patrick McGee on x
The Judge is pressing Tim Cook now... *mini thread* all paraphrasing: You said you focus on users. I've seen evidence that lots of revenue comes from gamers. A v significant amount, right? Cook agrees games are the majority of in-app purchase
@stephennellis Stephen Nellis on x
I would submit that YGR's last barrage was pretty dramatic. She clearly was skeptical that what Apple reaps from game developers is justified by what Apple provides or that it faces real competitive on either IAP rates or for attracting developers. https://twitter.com/...
@patrickmcgee_ Patrick McGee on x
This trial has had nothing like a Perry Mason Moment, but if you were a Hollywood director making a film on it you'd focus almost entirely on the last 90m and specifically the last 5m.
@patrickmcgee_ Patrick McGee on x
Judge: ok but let's talk banking apps. I suspect other than the $99 annual fee you don't charge Wells Fargo — correct, Cook says — but you are charging gamers, who subsidise the banking apps, no? (Great questioning)
@pitts_man Pitts on x
Overall a good day for Tim Cook. No real headlines that can be used against Apple in the future. The thing the press has latched on to is Judge YGR's pointed questioning, but only within the frame of “wow she's skeptical.”
@gartenberg Michael Gartenberg on x
“when Cook was asked about Apple's deal with Google that keeps the search engine as the default on iOS. Cook said he didn't remember the specific numbers.” 😂😂😂 https://techcrunch.com/...
@chancehmiller Chance Miller on x
Live blogging Tim Cook's testimony here, lots of privacy talk so far https://9to5mac.com/...
@mims Christopher Mims on x
would like a limited edition print of this courtroom sketch of tim cook, thanks https://www.wsj.com/... https://twitter.com/...
@benthompson Ben Thompson on x
In all seriousness, I think the App Store is awesome. Apple created something really valuable, and Google rightly did the same. I support its existence. The reason I push back is I worry about the next great things that won't get built on top. There's a middle ground here.
@holdendepardo Holden DePardo on x
They've also gone down on App Store specifically. I remember when Super Monkey Ball launched at $10 in 2008. Now, it's much more likely to see games release freemium. $5 would be considered a lot today. Exception: Final Fantasy ports. Holy moly are they pricey for App Store https…
@sgrif @sgrif on x
No, it's akin to if you buy an iPhone at Best Buy, and in the box there's information directing you to their website WHICH IS LITERALLY WHAT HAPPENS https://twitter.com/...
@reedalbergotti Reed Albergotti on x
A bit of courtroom drama this morning as Apple CEO Tim Cook takes the stand in the Epic v Apple trial. Because Covid, the public can actually listen to it live. But if you just want to read the important updates, we'll be posting them live here. https://www.washingtonpost.com/ ..…

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