Gonzalez Rogers often sounded frustrated and sceptical as she periodically chimed in during four hours of testimony from Matthew Fischer, the Apple executive in charge of the iPhone app store.
The tone of the judge’s questions indicated she is concerned Apple’s efforts to comply with her order have been primarily designed to protect the company’s profits instead of making it easier for iPhone users to switch to other in-app payment options, as she intended.
Gonzalez Rogers was particularly pointed as she grilled Fischer about whether Apple had deliberately made it more cumbersome and confusing for consumers to make digital purchases through alternative services.
“Other than to stifle competition, I can see no other answer,” the judge said as she tried to dissect the rationale for Apple’s design of alternative payment option system for iPhone apps.
Fischer maintained Apple is complying with the judge’s order while still trying to shield iPhone users from bad actors on the internet and enabling the Cupertino, California, company to reap a return on its investments in the app store and other mobile software.
Toward that end, Apple has introduced a new commission structure ranging from 12 per cent to 27 per cent on digital transactions initiated from within an app and completed on an alternative payment option.
After Gonzalez Rogers said it sounded like Apple was still collecting a “windfall,” Fischer said the company expected its effective commission rate on digital transactions processed by alternative payment options to be about 18 per cent.
“We are running a business,” Fischer said.
Apple spent more than two years trying to overturn the order that Gonzalez Rogers issued as part of a broader antitrust battle that the company won.
The injunction requiring Apple to allow links to alternative app payments took effect in January after US Supreme Court refused to review the case.
But Fischer disclosed Wednesday that Apple so far has only received and approved applications to display links to alternative payment systems from 38 apps so far — a fraction of the roughly 2 million iPhone apps available in the US.
Fischer couldn’t specify how many of those apps engage in digital transactions when asked by Gonzalez Rogers, who ordered Apple to provide the number as the proceedings progress this month.
Video game Epic Games cites the muted interest in applying for in-app links to alternative payment options as evidence that Apple was still rigging the system in its favour.
Epic, maker of the popular Fortnite video game, is trying to force Apple to make more sweeping changes to accommodate alternative payment options after it unsuccessfully tried to persuade Gonzalez Rogers that the iPhone app store had turned into a price-gouging monopoly during a 2021 trial.
The effort is being supported by Facebook and Instagram owner Meta Platforms, Elon Musk’s X short-messaging service, music streaming service Spotify and long-time Apple rival Microsoft.
Apple’s current alternative payment formula “is guaranteed to continue extracting excessive commissions from developers” while also blocking them from steering consumers to other places where they could buy the same digital services for lower prices, Epic asserted in documents leading up to Wednesday’s hearing.
In its own pre-hearing briefs, Apple accused Epic of trying to get Gonzalez Rogers to micromanage its business in ways designed to boost the video game maker’s profits.
“Epic has repeatedly made clear that what it wants is access to and use of Apple’s tools and technologies without having to pay for them,” Apple argued.
The court hearings are scheduled to resume Friday when another top Apple executive, Phil Schiller, is expected to testify.
Gonzalez Rogers hopes to wrap up the hearings by May 17, but told lawyers Wednesday it might take longer than that.
-By Michael Liedtke of AP in Oakland, California.
