The ‘After the Bell’ panel discusses the first $100 billion quarter in the company’s history due to strong iPhone 12 demand.
A judge has ordered Apple CEO Tim Cook to face a seven-hour deposition related to the tech giant’s ongoing litigation battle with Fortnite creator Epic Games.
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Court documents reveal that Epic originally wanted to depose Cook for eight hours. Apple had invoked the apex doctrine, a rule that prevents high-level corporate employees from being deposed, but later offered a four-hour deposition for Cook instead as a concession.
But according to Judge Thomas Hixon, Epic and Apple’s dispute is “less than meets the eye” and the apex doctrine only “limits the length of a deposition, rather than barring it altogether.” Hixon said the real question is whether Cook should be deposed for “four hours, eight hours, or some length of time in between,” but noted that the decision would have to be a “practical one” since there is no legal principle to answer the question.
As a result, Hixon came to the conclusion of a seven-hour deposition, citing the timeframe being “the default rule for how long a witness must suffer being deposed.”
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Another factor that Hixon weighed in making his ruling is whether Cook has “unique, non-repetitive knowledge of the facts of the case,” an important focus of the apex doctrine.
“There is really no one like Apple’s CEO who can testify about how Apple views competition in these various markets that are core to its business model,” Hixon wrote. “The antitrust claims presented here implicate the competition the company faces and important aspects of its business model. The CEO’s understanding of these subjects is almost by definition unique and non-repetitive.”
Hixon also said that Epic demonstrated the deposition would be “meaningful,” citing Cook’s previous testimony before Congress on issues relevant to the three cases and the game maker’s ability to “put forth enough factual information to show that a deposition of ordinary length would not be abusive or harassing.”
However, Hixon determined that under the apex doctrine, a deposition of longer than seven hours for Cook is “unjustified.”
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In addition, Hixon denied a request from Apple to subpoena internal documents from Samsung, which the tech giant says supports its claim that App Store policies are similar to other companies’ policies.
Hixon called the request a “quirky deep dive” into Samsung and Epic’s relationship.
“If the market includes dozens or hundreds of app producers, then the ability this particular company has to distribute its apps on other platforms is barely relevant to the antitrust claims at issue, which focus on the effect Apple’s policies have on a market, not just one competitor,” Hixon said.
The judge explained that because of Epic’s size, its arrangement with Samsung “cannot serve as a stand-in for some larger category of market participants.”
“This means that the requested documents are idiosyncratic to Epic itself and unlikely to be important evidence of competition in a market or the effect of Apple’s policies on any sort of market, however, the market may ultimately be defined,” Hixon added.
Other companies subpoenaed by Apple include Sony, Microsoft, Nintendo, and Amazon.
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The dispute started after Epic Games created a direct payment system in the popular video game to offer players a 20% discount, and a way for the company to skirt around a 30% commission fee to the App Store. In response, Apple pulled Fortnite from the App Store and announced plans to suspend Epic from accessing the App Store’s development tools.
Epic later filed a legal complaint against Apple seeking to end its “anti-competitive restrictions on mobile device marketplaces” and accusing the company of “flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.”
Epic argued Apple’s move would cripple its Unreal Engine, used by many game developers to create their own products, and asked the court to block the move and grant the company’s reinstatement on the App Store. While a judge ruled that Apple could not retaliate against the Unreal Engine, the court said it would not reinstate Epic on the App Store.
Apple previously said it would allow “Fortnite” back into the store if Epic removed the direct payment feature, but Epic has refused, saying complying with Apple’s request would “collude with Apple to maintain their monopoly over in-app payments on iOS.”
After officially revoking Epic’s access to Mac and iOS development tools, Apple took the fight a step further with a countersuit seeking “restitution and disgorgement of all earnings, profits, compensation, benefits, and other ill-gotten gains obtained by Epic” as a result of its direct payment system.
The company also asked the court for Epic’s payment system to be disabled altogether as well as damages for harm to its reputation from frustrated “Fortnite” players and a public relations campaign against Apple that includes a parody of the company’s “1984” television commercial and playable character “Tart Tycoon,” who bears some resemblance to Cook.
A trial for Apple and Epic’s case is currently set for May 3, 2021, according to a court filing in October.
