Apple CEO Tim Cook takes the stand in Apple-Epic court battle

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CNBC's Josh Lipton gives the latest on Tim Cook's testimony in the court battle between Apple and Epic Games over App Store fees. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Apple CEO Tim Cook faced sharp questioning on Friday from Judge Yvonne Gonzalez Rogers about Apple’s App Store business model at the end of his testimony in the Epic Games v. Apple trial.

The questioning gave a preview into Judge Rogers’ thinking before she decides whether Epic Games’ argument is strong enough to force Apple to allow it to install alternative app stores on the iPhone and avoid the App Store’s 30% fee on in-app purchases.

Rogers asked Cook what his problem was with allowing iPhone users the choice of a lower-fee, through a web browser, specifically for games. Cook said that users have a choice between iPhones or Android devices.

She followed up by asking about whether Apple has a problem with giving users information to get the same in-app purchases through a web browser, bypassing Apple’s 30% fee, suggesting a compromise where Apple would allow a company like Epic Games to link users to a web browser to make transactions, instead of forcing them to use Apple’s in-app purchase mechanism.

“The gaming industry seems to be generating a disproportionate amount of money to the IP you’re giving them and everyone else,” Rogers said to Cook. “In essence, it’s almost like they are subsidizing everyone else.”

Cook said that Apple faced fierce competition for developers and users.

“You don’t have competition in those in-app purchases, though,” Rogers replied.

Rogers also expressed doubt that Apple’s Small Business Program, which cut App Store fees in half for small developers, was made out of concern for small businesses during the Covid pandemic, as Cook testified on Friday.

“That seemed to be the result of the pressure accrued because of investigations, of lawsuits,” Rogers said.

Cook said that lawsuits were in the back of his head, but what triggered the program was worry over small businesses during Covid.

Rogers remarked that she had seen a survey that 39% of Apple developers are dissatisfied with the App Store.

“It doesn’t seem to me feel any pressure or competition to actually change the manner in which you act to address the concerns of developers,” Rogers said.

Cook disagreed and said that Apple “turns the place upside down for developers.”

Friday was the first time Cook has testified in court, he said.

The three-week trial will conclude on Monday, but Judge Rogers warned this week it may take weeks or months until she makes a decision. After that, the dispute is likely to be appealed, she said.

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