Apple Fellow Phil Schiller testified in court on Monday that he initially opposed the 27% commission Apple now charges on purchases made outside the App Store, citing compliance risks and potential developer backlash (via AP News).
Schiller, who oversees the App Store, said he had concerns that the fee would create an “antagonistic relationship” between Apple and developers, and worried about Apple becoming “some kind of collection agency” that might need to audit developers who didn’t pay.
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The current hearings are scheduled to continue until Wednesday, and are focused on determining whether Apple has violated the original court order. Judge Gonzalez Rogers has expressed frustration with Apple witnesses’ hazy recollections about how they developed rules for the alternative payment system.
According to court documents, Apple extensively analyzed how the “less seamless experience” of external purchases would affect transaction completion rates, which helped the company work out when developers would likely return to using Apple’s in-app purchase system.
Long-time Apple executive Phil Schiller admitted in court that the 27 percent fee Apple imposed likely violated a court order in Epic v. Apple. In effect, he simply confirmed what everyone already knows about Apple’s bad faith compliance with antitrust rulings around the globe: It is doing as little as possible to meet the letter of the law to forestall actual compliance for as long as possible.
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Schiller said he opposed the fee initially, and that multiple Apple executives, including CEO Tim Cook, were involved in the process of determining the fee structure for web-based fees. He also admitted that the fee structure it came up with was “antagonistic,” though he did sign off on it.
The Judge was already unimpressed by Apple’s behavior before this week. “All this does is maintain the non-competitive environment that exists,” she told Schiller last year. Since then, the only thing that’s changed is that Apple hasn’t complied with the court order for a longer period of time. What’s left is for Judge Gonzalez-Rogers to hold Apple in contempt of the court and order it to make more meaningful changes that address her original ruling. From four years ago.
Schiller has been a particularly bad witness for Apple, as he’s claimed to forget almost anything related to Epic Games each time he’s testified. But Epic’s lawyers are using evidence to “refresh” his memory during this week’s hearings.
And it wasn’t explicitly said, but the testimony had the vibe that Phil didn’t want to do any of this – not even charging the commission – but was overruled by the “revenue committee” (CEO Tim Cook and then-CFO Luca Maestri).
He wasn’t sure it would even be legal, and this lines up with the previous reporting that Schiller wanted to cap the App Store profits at $1 billion per year, in the interest of ecosystem health. Obviously, the buck stops at Tim Cook.
Exhibit 225 shows that Apple CEO Tim Cook PERSONALLY directed the App Store team to add misleading security warnings to undermine developers and users transacting directly. This is one of the critical points in the Contempt of Court proceeding.
Perhaps he will testify, too, and tell the court that Apple has to deal with the same fees and warnings as developers.
Now we’re in court reading Apple’s internal emails on making the third-party payment scare screens as scary and intimidating as possible. “It raises questions and hesitancy, ha ha!”, one writes of the latest scare screen.
Now this witness, a UX designer, is on the stand being examined by a friendly Apple lawyer, redefining the English word “scare” as some sort of benign benevolent gesture. 🙄
Previously:
