Apple's App Store profits seems disproportionate: US judge
A US judge while questioning Apple CEO Tim Cook over the firm's App Store policies at a hearing said the profits Apple reaps from game developers "appear to be disproportionate".
Cook testified for more than two hours in Oakland, California, as the closing witness in Apple‘s defense against Epic’s charges that the iPhone maker’s App Store controls and commissions have created a monopoly that Apple illegally abuses.
At the end of testimony, Judge Yvonne Gonzalez Rogers questioned Cook, pressing him to concede that game developers generate most App Store revenue and help subsidize other apps on the store that pay no commission.
Gonzalez said the profits Apple reaps from game developers “appear to be disproportionate.” I understand this notion that somehow Apple is bringing the customer to the dance,” she said. “But after that first time, after that first interaction, the developers are keeping customers with the game. Apple is just profiting from that, it seems me.”
Cook disagreed. “The free apps bring a lot to the table. Only the people who are really profiting in a major way are paying 30” percent commissions, he said.
Epic has tried to show that Apple’s iPhone is a lucrative platform that locks in users, pointing to an internal Apple document that Epic alleges showed the App Store had 78% operating margins. Cook said the document did not reflect the full costs of running the App Store.
The testimony constitutes Cook’s most extensive public remarks on the App Store, which anchors Apple’s $53.8 billion services business.
Gonzalez Rogers also cited a survey that found 39% of software developers were unhappy with Apple’s app distribution services.
“It doesn’t seem to me that you feel pressure or competition to actually change the manner in which you act with developers,” Gonzalez Rogers said.
Cook replied that “we turn the place upside down” to respond to developer complaints, but later conceded that he does not receive regular reports on how developers feel about working with Apple.
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