The Apple vs Epic Games Trial is Over. For Now…

Judge in courtroom

Apple’s trial with Epic Games is over for now. During the courthouse battle we saw big hitters from both company’s, including Apple CEO Tim Cook and SVP of software engineering Craig Federighi, take the stand. As we await the verdict, which Judge Yvonne Gonzalez Rogers said would take “a while,” it’s worth reflecting on what we actually heard during a tumultuous three weeks, and what the consequences could be.

[Epic vs Apple: The Story of the Trial so Far]

What Did Tim Cook Say in the Apple – Epic Games Trial?

For Apple and legal-watchers this case has been a fascinating one, not least because it was the first time Mr. Cook has ever taken the stand as Apple CEO. During his testimony, he hit back at criticism of his company’s continued presence in China. “I know of nobody in the smartphone business who’s not selling into China,” Mr. Cook said, reported The New York Times.

The Judge herself, who is ruling on the case instead of a jury, asked him why Apple restricted users to only purchasing apps via the App Store. Might opening up the system mean lower prices for consumers? “If you allow people to leak out like that, we would, in essence, give up our total return on our” intellectual property, said Mr. Cook. Judge Rogers was not impressed by that argument, according to The Verge, and pointed out:

The gaming industry seems to be generating a disproportionate amount of money relative to the IP that you are giving them and everybody else. In a sense, it’s almost as if they’re subsidizing everybody else.

In response, Mr. Cooks insisted:

We need a return on our IP. We have 150,000 APIs that we create and maintain, and numerous developer tools, and the customer service piece of dealing with all these transactions.

This essentially is the core of Apple’s argument to justify the 15 or 30 percent cut it takes from developers on App Store and in-app purchases. The company believes it maintains a safe and trusted environment for its users and developers which needs to be paid for.

[Phil Schiller Suggested Reducing Apple’s App Store Cut to 20 Percent a Decade Ago]

Again, we will see if this impressed the judge. She said that she understood “this notion that somehow Apple’s bringing the customers to the users. But after that first time, after that first interaction, the [developers] are keeping the customer with the games. Apple’s just profiting off that, it seems to me.”

Craig Federighi Said What?

Mr. Cook’s staunch defense of his company is hardly a surprise. What was a little more eyebrow-raising was the comments from Mr. Federighi. The software supremo said that “we have a level of malware on the Mac that we don’t find acceptable,” and apps downloaded from the internet contain hidden malware which is “regularly exploited,” Protocol reported. Run that by me again? Apple doesn’t think Mac security is good enough?

However, what Mr. Federighi was actually doing was laying out how important it is for iOS security to be tight. He said the mobile operating system was a “much more attractive market” for would-be cyber-attackers. Epic had been trying to demonstrate that Apple could and should allow downloads that bypass the App Store, as is possible on the Mac.

Epic Games vs Apple Could Have Huge Consequences

As the dust starts to settle on (this part of) the Apple and Epic Games trial, it’s worth remembering quite how significant the consequences of Judge Roger’s ruling could be. Politicians around the world are watching. So are other big tech firms. Apple could have its worldview endorsed, or it might have to fundamentally shift its business model. Developers might be able to find other ways to distribute their products. Or any number of options in between. For now, everyone involved just has to wait for the judgment.

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W. Abdullah Brooks, MD

Charlotte:   A very tidy summary.    From the disassociated scraps that we have heard from the trial, I am not convinced that Apple made the all of the right arguments in their own behalf, and not being a lawyer, I lack the professional situational awareness about whether or not this was even the right occasion and venue for the argument as to why Apple should retain decisive control over their platform.    The 20th Century model, so ably modelled by MS and the OEMs in the PC ecosystem, characterised by the separate manufacturing of the OS, the CPUs, the… Read more »