Apple Epic Trial

App Store chief argues the virtues of Apple's walled garden

Matt Fischer took the stand in the fourth day of testimony in Epic v. Apple.

App Store chief argues the virtues of Apple's walled garden

Matt Fischer is the current App Store vice president and reports directly to longtime executive Phil Schiller.

Photo: David Paul Morris/Getty Images

Apple isn't expected to start building its official defense in the antitrust fight with Epic Games until the week after next, but one of its key executives at the heart of the dispute began laying the groundwork in court on Thursday.


Matt Fischer, the current App Store vice president who reports directly to longtime executive Phil Schiller, took the stand in Oakland as an Epic witness to answer questions about the App Store business model, as well as its role in the broader iOS operating system. Fischer is arguably the most high-profile Apple employee on the witness list outside Schiller and other members of Apple's executive leadership, and his testimony provides part of the foundation for the company's justification of its App Store commission.

So far, Apple counsel has revealed its strategies through opening arguments and at times aggressive cross-examination of Epic witnesses, including CEO Tim Sweeney and a number of third-party game industry executives. That's involved comparing iOS and the App Store to the console game ecosystems of Microsoft, Sony and Nintendo, and suggesting that game makers are just fine reaching iOS customers through cloud streaming and mobile web browsers if they don't like Apple's policies.

But Fischer provided the company's first robust rationalization for many of the App Store's more controversial policies. He called the store "incredibly unique" in the benefits it provides to consumers and developers and steadfastly defended it against claims that Apple overlooks fraud. That, in turn, justifies the commission Apple collects and the restrictions it imposes.

"We work really hard to make the App Store a marketplace that's attractive to both customers as well as to developers," Fischer testified. "I might be biased, but I certainly l think that what we do is incredibly unique, and I certainly have not seen any marketplace that distributes apps or games do what we're doing in terms of providing marketing and editorial support like this to developers."

The key takeaway from day four is that the future of this trial could very well hinge on how Judge Yvonne Gonzalez Rogers perceives the true purpose of the App Store. Is it a level playing field designed to protect user privacy and security and take only its fair share? Or is it an increasingly byzantine pillar of Apple's walled garden, one preoccupied with chasing profit and marred by inconsistently applied and ever-changing rules? Fischer, and Apple by extension, would very much like it to be seen as the former. Epic, of course, the latter.

Central to this characterization will be how Apple justifies keeping out competing game-streaming and subscription apps, like Microsoft's Xbox Game Pass and Google Stadia. That was the focus of a rather grueling cross-examination of Epic witness and Xbox Vice President Lori Wright on Wednesday. Another factor will be whether Fischer and others at Apple can successfully downplay or dismiss concerns of special treatment, like the deals Apple has cut with Amazon in the past to reduce its commissions for streaming video apps.

Fischer did his part in that regard, when he was asked outright by Apple lawyer Jay Srinivasan whether any developer receives special treatment. "The App Store review guidelines apply equally to all developers," Fischer replied. He also commented on the notion that Apple privileges its own apps over those of competitors, saying, "We have promoted apps that are competitive to Apple apps since before I joined the App Store team in 2010, and we continue to not only distribute but to feature and promote apps that are competitive to Apple apps in the store. We do this all the time."

Epic lawyer Katherine Forrest spent much of her time questioning Fischer by trying to poke holes in Apple's security justification, which the company has used to deny alternative payment processing systems that could, as Epic's did, bypass the App Store's fees. Forrest listed more than a dozen companies that use their own payment processing systems, companies like PayPal-owned Braintree and Amazon, that are allowed to do so because they process transactions of non-digital goods, of which Apple does not take a 30% cut.

Fischer said he could not recall any study Apple conducted on the security or privacy of any third-party payment system relative to Apple's. Later, during cross-examination, Fischer asserted he is in fact not responsible for security, privacy, fraud or app review.

Fischer confirmed to Epic that Apple has in the past given certain developers exclusive access to APIs and other privileges, after use of the term "whitelisted" was shown in emails related to Hulu's use of a not-yet-released API for canceling and refunding consumer subscriptions. During cross examination, Fischer disputed the term whitelisting, going so far as to call it "offensive," and later claimed access to such features was part of an ongoing testing process conducted through its TestFlight program.

"In this particular case, it was something we were testing with a few companies to see how this feature would perform, with the intention that, if it performed well, we would roll it out to all developers," Fischer argued.

Fischer, as the first Apple employee to be cross-examined by Apple counsel, used his time in front of Srinivasan to promote the App Store as a fair marketplace that goes above and beyond what other app stores do to support developers. Fischer described his early relationship with Epic, during the years the developer made the Infinity Blade trilogy of iOS games, and later when Fischer worked with Epic to promote a holiday Fortnite skin in the winter of 2018. He said Apple gave Epic valuable onstage time during its developer conferences to promote the games.

"Did Epic pay Apple for any of that support?" Fischer was asked. "No, they did not," he said. Fischer also said Apple was willing to change its rules at Epic's request, including when it began allowing in-app gifting for Fortnite, a feature Fischer said it enabled for all developers. "When we make a change, we want to make a change that applies equally to all developers," Fischer said.

The App Store chief also shed light on how Apple came to the conclusion it would not charge certain app makers a 30% fee if they produced a physical good or service, compared to a digital one like Epic and other game developers.

"The decision was made that for an app that sells physical goods and services, it didn't make sense for Apple to earn a commission as part of that, because we ultimately didn't know if that good or service would be delivered to the end user," he said, using the example of an Uber ride or an Amazon package ordered through an iPhone. Apple does not take a cut of those purchases and allows those developers to use their own payment systems.

Epic has taken issue with this distinction, saying it unfairly penalizes competing software distributors while exempting companies that make use of much of the same Apple technology and platform benefits. But Fischer cast the decision as another reason Apple keeps tight control over its ecosystem, because it's concerned primarily with whether users are receiving what they paid for when they buy something that is primarily experienced on the iPhone itself, such as an in-game purchase in Fortnite.

"[Apple in-app payment] in its simplest form is a way to sell digital content within an app. But actually it's a lot more complicated than that," Fischer argued, saying it "enables the safe and frictionless delivery of digital goods from a developer to a user."

That argument — that the App Store's control over digital purchases is for the good of the platform and not a profit ploy — will likely be one Apple and its lawyers fall back on as the trial moves forward.

Fintech

Kraken CEO defends his ‘back to dictatorship’ crackdown

Jesse Powell says the crypto exchange’s cultural revolution was necessary.

"Some people feel they should be able to be whatever they want to be in the workplace. But there's a line," Powell told Protocol.

Photo: David Paul Morris/Bloomberg via Getty Images

Kraken CEO Jesse Powell found himself under fire last month for provocative remarks he made that kicked off a contentious workplace battle and shined a light on the crypto exchange’s distinctive corporate culture.

A New York Times report based on leaked Slack messages and employee interviews accused Powell of making insensitive comments on gender and race, sparking heated conversations within Kraken. Powell responded forcefully, laying out new ground rules and principles in an attempt to define the way he wanted the company to operate — sharply at odds in some aspects with the tech industry’s standard practices.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Every day, millions of us press the “order” button on our favorite coffee store's mobile application: Our chosen brew will be on the counter when we arrive. It’s a personalized, seamless experience that we have all come to expect. What we don’t know is what’s happening behind the scenes. The mobile application is sourcing data from a database that stores information about each customer and what their favorite coffee drinks are. It is also leveraging event-streaming data in real time to ensure the ingredients for your personal coffee are in supply at your local store.

Applications like this power our daily lives, and if they can’t access massive amounts of data stored in a database as well as stream data “in motion” instantaneously, you — and millions of customers — won’t have these in-the-moment experiences.

Keep Reading Show less
Jennifer Goforth Gregory
Jennifer Goforth Gregory has worked in the B2B technology industry for over 20 years. As a freelance writer she writes for top technology brands, including IBM, HPE, Adobe, AT&T, Verizon, Epson, Oracle, Intel and Square. She specializes in a wide range of technology, such as AI, IoT, cloud, cybersecurity, and CX. Jennifer also wrote a bestselling book The Freelance Content Marketing Writer to help other writers launch a high earning freelance business.
Enterprise

GitHub’s CEO wants to go passwordless by 2025

Thomas Dohmke sat down with Protocol to talk about what the open-source code hosting site is doing to address security vulnerabilities, including an aim to go passwordless by 2025.

GitHub CEO Thomas Dohmke spoke to Protocol about its plan to go passwordless.

Photo: Vaughn Ridley/Sportsfile for Collision via Getty Images

GitHub CEO Thomas Dohmke wants to get rid of passwords.

Open-source software has been plagued with cybersecurity issues for years, and GitHub and other companies in the space have been taking steps to bolster security. Dohmke knows, however, that to get to the root of the industrywide problem will take more than just corporate action: It will ultimately require a sea change and cultural shift in how developers work.

Keep Reading Show less
Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at mma@protocol.com.

Enterprise

Why foundation models in AI need to be released responsibly

Foundation models like GPT-3 and DALL-E are changing AI forever. We urgently need to develop community norms that guarantee research access and help guide the future of AI responsibly.

Releasing new foundation models doesn’t have to be an all or nothing proposition.

Illustration: sorbetto/DigitalVision Vectors

Percy Liang is director of the Center for Research on Foundation Models, a faculty affiliate at the Stanford Institute for Human-Centered AI and an associate professor of Computer Science at Stanford University.

Humans are not very good at forecasting the future, especially when it comes to technology.

Keep Reading Show less
Percy Liang
Percy Liang is Director of the Center for Research on Foundation Models, a Faculty Affiliate at the Stanford Institute for Human-Centered AI, and an Associate Professor of Computer Science at Stanford University.
Climate

The West’s drought could bring about a data center reckoning

When it comes to water use, data centers are the tech industry’s secret water hogs — and they could soon come under increased scrutiny.

Lake Mead, North America's largest artificial reservoir, has dropped to about 1,052 feet above sea level, the lowest it's been since being filled in 1937.

Photo: Mario Tama/Getty Images

The West is parched, and getting more so by the day. Lake Mead — the country’s largest reservoir — is nearing “dead pool” levels, meaning it may soon be too low to flow downstream. The entirety of the Four Corners plus California is mired in megadrought.

Amid this desiccation, hundreds of the country’s data centers use vast amounts of water to hum along. Dozens cluster around major metro centers, including those with mandatory or voluntary water restrictions in place to curtail residential and agricultural use.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Latest Stories
Bulletins