RESEARCH TRIANGLE PARK – Tim Cook, the CEO of tech giant Apple, is set to take the stand as the Epic Games-Apple antitrust trial enters its third week.
And the stakes are high for both firms.
“Epic led with their CEO [Tim] Sweeney. Apple saved Cook for the end,” says Raleigh tech attorney Jim Verdonik who has written extensively about the issues surrounding the legal showdown. But Verdonik finds Apple’s decision about Cook somewhat surprising.
“One might think that Apple wouldn’t put Cook on the stand if they felt like their case was a sure winner without him,” Verdonik explains.
Epic sued Apple after its Fortnite game was booted from Apple’s app store due to a dispute over Apple’s 30% fee on sales. Epic also sued Google for similar reasons. And Epic has challenged Apple legally from Australia to the EU.
Another reason: The questions Cook will get and the chance of any differences between his testimony and previous Apple execs’ information as well as court documents.
“Epic and the judge will get to cross examine the big Enchilada,” Verdonik says, referring to Cook. The judge hearing the suit is U.S. District Judge Yvonne Gonzalez Rogers who earlier challenged Sweeney in his testimony.
Cross examination will include comparing what Mr. Cook says on the stand to Apple’s many public statements and private statements in internal emails.
“Apple will look bad if there are discrepancies,” Verdonik notes.
In previewing Cook’s appearance, The Wall Street Journal noted that Apple faces risks even if it wins the trial.
“Mr. Cook, a guarded chief executive who is used to carefully orchestrated public appearances, is set to testify in a trial that, regardless of the verdict, could prove to be one of the most consequential for the iPhone maker as it faces accusations it denies of abusing its market power,” the WSJ reported.
So far, Apple appears to be doing well in the case.
Michael Liedtke, an Associated Press Technology Writer, wrote last week: “Apple seems to be prevailing in an antitrust trial with Cary, N.C.-based Epic Games, examining whether its mobile app store illegally skims profits from smaller companies.”
However, Liedtke added: “But the tech giant’s apparent edge has been carved out amid nagging questions about the financial vise it holds people in when they buy digital services on iPhones, iPads and iPods.”
After reviewing the AP report, Verdonik says “I generally agree with the analysis.”
As the trial moves toward closing, Verdonik points out that “Epic has always had an uphill battle based on existing antitrust law.”
He explains: “The primary issue is whether Apple will try to settle with EPIC on the steering issue for in app purchases. That would benefit EPIC more than other games makers, because EPIC sells so many in app items.
“What Apple is afraid of is that games maker might lower the initial purchase price of their games and divert more revenue to in app purchases. There are ways to limit the ability to divert revenue. Apple gets its percentage if in app purchases exceed a stated percentage of the game purchase price.”
Apple also faces challenges outside of the Epic trial.
“Apple is under attack on multiple fronts, including the European Union, Attorneys General of many states, the US Justice Department., Congressional investigations.,” Verdonik explains.
“Making peace with the games makers may benefit Apple in its wars on other fronts. The biggest threat to Apple is that antitrust and other laws will be changed if people think Apple and other Big Tech companies are acting unfairly.”