Judge asks if non-Apple app stores would mean less fraud and privacy problems

A federal judge asked Friday whether there would be less fraud, security and privacy issues and delays in getting apps approved for updates if Apple allowed app stores other than its own.

"One problem with limiting competition is that you don't get innovation," U.S. District Judge Yvonne Gonzalez Rogers said. "So one of the concerns, at least my sense with this lawsuit, is that if you're not allowing parties to compete on these topics, then things won't improve."

The remark came on the fifth day of a widereaching antitrust trial over Apple taking a 30% cut of all transactions that take place on its apps and prohibiting third party app stores. Fortnite creator Epic Games says Apple abuses its power as the gatekeeper of the App Store by barring certain types of apps that it views as competition and as a way to circumvent its payment processing system. Epic Games v. Apple Inc., 20-cv-05640 (N.D. Cal., filed Aug. 13, 2020).

During questioning by Epic's counsel, Trystan Kosmynka, Apple's senior director of app review and marketing, was grilled on the integrity of the app review process.

To get apps onto the App Store or deliver updates to users, developers must submit them for approval to ensure they comply with Apple's guidelines. A common complaint has been over the time it takes for Apple to review the apps.

In a 2018 email Kosmynka received discussing the anticipated release of Fortnite onto the operating system for iPhones, an Epic executive indicated that the delay is a "bottleneck for the Fortnite ecosystem" since users have to run the most updated version of the game to play with users across multiple consoles.

An Apple executive responded in the email discussion that "the reality is, sometimes we are that bottleneck" and that there's "nothing we can really do to change that."

While Apple tells developers it will approve 50% of apps in 24 hours and 90% within 48 hours, Kosmynka said that it "varies widely depending on the app." Asked by Rogers if the company delivers on its promise, he replied "absolutely" and that it reviews 96% of apps in one business day.

"Some take hours, some up to a minute," he said. "Many of our app submissions are updates."

Epic attorney Lauren Moskowitz, a partner at Cravath Swaine & Moore LLP, introduced evidence on multiple incidents in which she said apps were improperly permitted into the App Store.

In an email replying to the discovery of an app that scammed users into purchasing subscriptions, Kosmynka wrote, "We need to think about how to stop this from happening" and prevent the apps from "making hundreds of thousands of dollars from these scams."

In another email, Kosmynka was directed to investigate apps that improperly tracked and sold users' location data.

Kosmynka defended the app review process when asked by Apple attorney Veronica S. Moye, a partner at Gibson Dunn Crutcher LLP.

There are "ways the system can be gamed," he said, but without that system, it would be a free-for-all in which users are more likely to download malicious apps. He said the "process is critical to a safe and trusted place to get apps."

In a line of questioning on whether Apple stifled potential improvements to its app review process by barring third party app stores, Rogers asked if there are "companies out there doing things better or differently than Apple."

"I couldn't comment on better," Kosmynka replied. He said he looks at Android's approach to evaluate Apple's policies.

Steve Allison, vice president of the Epic Games Store, also testified on the economics of Epic's marketplace for games. Epic takes a 12% commission from developers who sell games on its store compared to the 30% cut that Apple takes, he said.

Apple attorney Karen L. Dunn, a partner at Paul Weiss Rifkind Wharton & Garrison, asked if Allison knew that the split was "way outside the industry standard."

"I would not," he responded.

Dunn noted that Allison, in a deposition, answered the same question with "yes."

"Fine," Allison said.

Matthew Weissinger, Epic vice president of marketing, will continue to testify on Monday.