Apple CEO Tim Cook described the company’s ironclad control over its mobile app store as the best way to serve and protect iPhone users, but he faced tough questions about competition issues from a judge Friday about allegations he oversees an illegal monopoly. The rare courtroom appearance by one of the world’s best-known executives came during the closing phase of a three-week trial revolving around an antitrust case brought by Epic Games, maker of the popular video game Fortnite. Epic is trying to topple the so-called “walled garden” for iPhone and iPad apps that welcomes users and developers while locking out competition. Created by Apple co-founder Steve Jobs a year after the iPhone’s 2007 debut, the App Store has become a key revenue source for Apple, helping power the company to a $57 billion profit in its last fiscal year. The trial focuses on Epic’s contention that Apple has turned its store into a price-gouging vehicle that not only reaps a 15% to 30% commission from in-app transactions, but blocks apps from offering other payment alternatives. That ban extends to showing a link that would open a web page offering commission-free ways to pay for subscriptions, in-game items and the like. Under friendly questioning from a company lawyer, Cook delivered polished remarks that sometimes sounded like a commercial for the iPhone and other Apple products. But the normally unflappable CEO occasionally seemed flustered while being grilled by Epic lawyer Gary Bornstein. His unease was particularly evident when pressed about the level of profits in a store that Jobs initially thought would be lucky to break even. He seemed to stumble slightly again when when Bornstein confronted him about a deal in China that could compromise user privacy, even as the company maintains that protecting its customers’ personal information is a top priority. Cook, though, never wavered during nearly four hours of testimony from his position that Apple’s grip on the app store helps it keep things simple for a loyal customer base that buys iPhones knowing they getting “something that just works.” “They buy into an entire ecosystem when they buy an iPhone,” said Cook, who wore a face shield, but no mask in an Oakland, California, courtroom that has limited access because of the pandemic. It wasn’t at all clear that the federal judge who will decide the case was buying everything Cook said on the stand. Read: Apple brings CEO Tim Cook to court in defense of app store After the lawyers were done with their questioning, U.S. District Judge Yvonne Gonzalez Rogers asked why Apple can’t allow rival stores to offer an in-app transaction option on iPhones, iPads and iPods that might charge lower commissions. That is something Epic is fighting to make it happen, partly because it has a still unprofitable store that imposes a 12% commission. Gonzalez Rogers seemed particularly troubled by a survey indicating 39% of iPhone app developers aren’t happy with the current distribution system. She also wondered about the fairness of a commission system requiring the makers of video games pay the bulk of the commissions, while digital services offered in other industries such as banking don’t pay anything, even though they are using the technology that powers iPhones. “The gaming industry seems to be generating a disproportionate amount of money relative to the (intellectual property) that you are giving them and everybody else? In a sense it’s almost as if they are subsidizing everybody else,” Gonzalez Rogers said. Cook agreed about the subsidy, but insisted there is still a fair balance because video game makers are able to reach a wider audience of consumers who become players while visiting the store looking at other apps. He took issue with the notion that most app makers are unhappy with the store’s current setup. “We turn the place upside down for developers,” Cook said. Gonzalez Rogers also didn’t seem to buy Apple’s explanation for a move it made last year when it lowered its commission on in-app commissions to 15% on the first $1 million in revenue. Although the price cut came after Epic filed its antitrust case in August, Apple said the discount was driven by desire to provide a helping hand during a pandemic-driven recession. “At least what I’ve seen so far, that really wasn’t the result of competition, (but) the pressure you were feeling,” Gonzalez Rogers told Cook. Apple’s app store practices are being examined by regulators and lawmakers in the U.S. and Europe while Epic pursues its case. Gonzalez Rogers is expected to elaborate issues still weighing on her mind Monday when she plans to pose questions to lawyers on both sides while they make their final points before she takes the matter under submission. The judge said she hopes to release her decision before Aug. 13 in a written ruling that could reshape the technology landscape.

Apple CEO Tim Cook will take the witness stand Friday to defend the company’s iPhone app store against charges that it has grown into an illegal monopoly — one far more profitable than his predecessor Steve Jobs envisioned when it opened up 13 years ago. The technology company is counting on Cook’s appearance to put the finishing touches on Apple’s defense against an antitrust case brought by Epic Games, maker of the popular video game Fortnite. Epic is trying to topple the so-called “walled garden” for iPhone and iPad apps that welcomes users and developers while keeping competition out. Created by Jobs a year after the iPhone’s 2007 debut, the App Store has become a key revenue source for Apple, a money-making machine that helped power the company to a $57 billion profit in its last fiscal year. Epic is trying to prove that the store has morphed into a price-gouging vehicle that not only reaps a 15% to 30% commission from in-app transactions, but blocks apps from offering other payment alternatives. That extends to just showing a link that would open a web page offering commission-free ways to pay for subscriptions, in-game items and the like. Read:Apple’s app store goes on trial in threat to ‘walled garden’ Apple fiercely defends the commissions as a fair way for app makers to help pay for innovations and security controls that have benefited both iPhone users and app developers, including Epic. Apple says it has invested more than $100 billion in such features. It also argues that App Store commissions mirror fees charged by major video game consoles — Sony’s PlayStation, Microsoft’s Xbox and Nintendo’s Switch — as well as a similar app store run by Google for more than 3 billion mobile Android devices. That is roughly twice the number of active iPhones, iPads and iPods that rely on Apple’s store for apps. Apple’s ironclad control over the App Store is already under investigation by regulators and lawmakers in Europe and the U.S. Epic lawyers are expected to spend several hours grilling Cook on the stand. The questioning is likely to dissect the strategies Cook has drawn up since taking the CEO job nearly a decade ago, just a few months before Jobs died of cancer in October 2011. The App Store ranks among Apple’s biggest successes during Cook’s reign. Since beginning with just 500 apps in 2008 the store has ballooned to 1.8 million apps, most of which are free. Apple has drawn upon its commissions and exclusive in-app payment system to help more than double the annual revenue of its services division from $24 billion in fiscal 2016 to $54 billion last year. This boom wasn’t something Jobs foresaw. Shortly after the store opened, Jobs publicly said Apple didn’t expect the App Store to be very lucrative. Epic’s lawyers have repeatedly cited those comments as evidence that Apple reshaped the store to fuel its earnings growth once the popularity of mobile apps became clear. Exactly how profitable the App Store is has been a point of contention throughout the three-week trial. An accounting expert hired by Epic estimated that its profit margins range from 70% to 80%, based on a review of confidential Apple documents. But Apple has insisted those numbers aren’t accurate because they don’t reflect expenses spread throughout the company’s operations. Phil Schiller, a longtime Apple executive and former Jobs confidant, conceded earlier this week that the company’s commission system had generated more than $20 billion in revenue through June 2017. Epic lawyer Katherine Forrest had presented him with that estimate, based on numbers that Apple publicly released in mid-2017. Epic’s questioning of Schiller may foreshadow how Epic’s lawyers intend to go after Cook, who is generally unflappable in public and tightly focused on his message when dealing with reporters and lawmakers. Read:Apple’s iPhone privacy clampdown arrives after 7-month delay Epic’s lawyers have repeatedly referred to internal exchanges involving Jobs and other executives to depict Apple as using its investment in security and personal privacy as an excuse for preserving the huge profits that flow from its app store. During Schiller’s testimony, for instance, Epic’s lawyers submitted a 2008 email Jobs sent to Schiller and another executive. In that note, Jobs wondered whether Google was taking aim at the then-nascent ad market that was emerging on the iPhone, which relies on operating software called iOS. “The more energy they devote to iOS the better,” Jobs wrote to Schiller. Forrest then challenged Schiller with two questions. “You wanted Google to be beholden to Apple?” she asked, soon following with, “You were basking in the power to destroy a company’s business?” Schiller answered no to both questions.

Apple said it has reached an agreement with the right-wing social app Parler that could lead to its reinstatement in the company’s app store. Apple kicked out Parler in January over ties to the deadly Jan. 6 siege on the U.S. Capitol. In a letter to two Republican lawmakers in Congress, Apple said it has been in “ substantial conversations ” with Parler over how the company plans to moderate content on its network. Before its removal from the app store, Parler was a hotbed of hate speech, Nazi imagery, calls for violence (including violence against specific people) and conspiracy theories. Apple declined to comment beyond the letter, which didn’t provide details on how Parler plans to moderate such content. In the letter, Apple said Parlor’s proposed changes would lead to approval of the app. Also read: Judge says Amazon won’t have to restore Parler web service Parler said it has implemented “several new safeguards” designed to detect posts that “would not fall within the protections of the First Amendment,” but added that it did not make broad policy changes. “While the App Store version of Parler will prohibit some posts that Parler allows, those posts will still remain visible on the web-based and Android versions of Parler,” the company said in a statement. The First Amendment does not apply to private companies such as Parler — it prohibits the government from making laws that impede free speech. But this has not stopped people from claiming that social media companies violate their free speech rights by moderating content, or from “free speech” apps such as Parler from popping up to fill a perceived void of “censorship-free” discussion sites. As of midday Monday, Parler was not yet available in the app store and Apple did not give a timeline for when it will be reinstated. According to Apple’s letter, Parler proposed changes to its app and how it moderates content. Apple said the updated app incorporating those changes should be available as soon as Parler releases it. Also read: Apple CEO escalates battle with Facebook over online privacy Google also banned Parler from its Google Play store in January, but Parler remains available for Android phones through third-party app stores. Apple’s closed app system means apps are only available through Apple’s own app store. On Monday, Google reiterated its January statement that “Parler is welcome back in the Play store once it submits an app that complies with our policies.” So far, this has not happened. Parler remains banned from Amazon’s Web Services. Amazon said in January that Parler was unable to moderate a rise in violent content before, during and after the insurrection. Parler asked a federal judge in Seattle to force Amazon to reinstate it on the web. That effort failed, and the companies are still fighting in court. Republican political donor Rebekah Mercer has confirmed she helped bankroll Parler and has emerged in recent months as the network’s shadow executive after its founder John Matze was ousted as CEO in February.