The Fortnite maker, the most popular game in the world, claims the way Apple runs its App Store amounts to a monopoly
Tim Cook, the chief executive of Apple, is set to testify on Friday as the star witness in a high-stakes case against Epic Games that could upend Apple’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 up in arms over how much of that profit Apple gets to cash in on and is trying to prove that the way Apple 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.
The battle has evolved into 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 has reportedly been preparing extensively for his highly-anticipated testimony.
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.
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 Friday.
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 Monday and Tuesday. Apple’s software chief, Craig Federighi, took the stand 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.