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Apple exec Schiller defends App Store changes in Epic Games case

Apple executive Phil Schiller fielded hours of questions from lawyers and a California federal judge on Wednesday, as the company battles claims that it violated an order to allow more competition in its lucrative App Store.

It was Schiller’s second day of testimony at the court hearing in Oakland, where “Fortnite” maker Epic Games has asked U.S. District Judge Yvonne Gonzalez Rogers to hold Apple in contempt.

The judge convened the hearing to assess Apple’s compliance with her 2021 injunction, which required the Cupertino, California-based company to allow developers more power to steer app users to payment options outside of Apple’s ecosystem.

In most instances, Apple charges developers a 30% commission on users’ purchases inside an app. Following Rogers’ injunction, it began allowing developers to include links to outside payment options, but developers are still required to pay a commission of 27% on such purchases.

Schiller and other executives have said the new policy, which Epic cited as evidence of Apple’s non-compliance, was a legal, legitimate business decision.

“We’re now competing to encourage developers to use our payment system,” Schiller said in court on Wednesday. He said the company had worked hard following the 2021 injunction to develop its new program.

“We have an interest with the court to get this accepted and adopted,” Schiller said.

Epic declined to comment on the hearing, and Apple did not immediately respond to a similar request.

Rogers, over four days of hearings, has expressed skepticism with some of Apple’s arguments. She has questioned how the iPhone maker came up with the new fee and asked what purpose some of its App Store policies serve “other than to stifle competition.”

The judge, who could order additional changes to the App Store, has not said when she will rule. The court will continue hearing testimony on May 31.

Epic first sued Apple in 2020, claiming Apple’s tight controls over its App Store violated antitrust law. Determining Apple’s compliance with Rogers’ injunction is all that remains from the lawsuit, after the U.S. Supreme Court declined to consider the case earlier this year.

The U.S. Justice Department in March accused Apple of monopolizing the smartphone market, stifling competition and innovation. The company has denied the claims and said in a court filing on Tuesday it will ask a judge to dismiss the lawsuit.

The case is Epic Games v. Apple, U.S. District Court, Northern District of California, No. 4:20-cv-05640. Reuters

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