Thread by @doratki

I'm back in Oakland for day 7 of Epic v Apple. I'm the designated pool reporter today, which will likely slow the pace of my live tweets. Attys for both sides are in the courtroom waiting for the judge. ITMT, here's my recap of yesterday's testimony:

law360.com/articles/13830…

The judge is back on the bench. She asked Apple's counsel when Apple CEO Tim Cook plans to take the stand cuz press is asking.

Apple's attorney replied "let us do some math and get back to you. It'll be the last day of our case, we believe."

Epic's antitrust expert Evans is back on the stand, testifying on direct that Apple holds a monopoly over the iOS in-app payment solutions for digital content and it has harmed consumers by raising prices for developers, who pass on some portion of their fees to consumers.

As Evans was talking about Apple controlling digital content app payment, the judge stopped him and said, "well, not all digital content apps." Only digital content apps for Apple's own products, she says.

Evans replied "Correct."

On cross now, Apple's counsel asks if Evans has been retained in the Google Play antitrust litigation. He says he hasn't done substantive work on the litigation, but "I guess we've been retained." Atty also points out Evans has never testified in antitrust litigation before.

Apple's counsel asked Evans if 'in-app transactions' were considered in his market definitions. He was confused about the atty's use of the term 'transactions,' since payment services could be a transaction. The judge pressed him on the point too, but she stopped herself.

Apple attorney's line of questioning characterizes in-store app payments as a single transaction. Evans is trying to make the distinction between Apple's payment processing service with developers and the app service a customer buys. (Examination is slow/painful)

Apple's counsel asked if Evans thinks all apps are substitutable. Evans replies "no," just like a restaurant payment card transaction wouldn't be substitutable for a clothing store transaction. "There’s no assumption that they’re substitutes," he said.

Apple's attorney tried to cast doubt on Evans's prior testimony that the Apple app store market is relatively inelastic due to Apple's alleged market power. He also seems to be trying to confuse Evans (and the rest of us) about the markets at issue and competitors.

Apple's attorney is hunched leaning over a podium as he asks Evans questions. The atty is relatively soft spoken, but at times seems to be getting frustrated by Evans' long-winded, academic responses to his qs.

Evans also keeps asking to pause his examination so he can have a drink of water, which involves removing his face shield. The judge allows for it, but the task eats into Apple's time (each side has 45 hrs to present its case) and I'm sure the attys are aware of that.

Evans agrees that Apple's 30% app commissions were "benign" in the "antitrust sense" when it launched the App Store.

Apple's counsel: You agree Apple wasn’t a monopoly in 2009 when it adopted 30% commission?

Evans: That’s correct.

Apple's counsel gets Evans to acknowledge that developers must use Apple’s IP to develop in the 'ecosystem.' This is hinting at Apple's defense argument that it has no duty to license its intellectual property to Epic, if Epic won't pay its fees or accept its terms.

Apple's counsel also gets Evans to agree with "the principle that the owner of intellectual property should not be required to create competition within its own IP." And he acknowledges that Apple is a 'v valuable brand' that has a 'high-quality' app ecosystem.

Apple's counsel wants to seal the courtroom for q's about profitability. The judge is going to hold off on that and finish cross/hear redirect before kicking reporters out to talk $$.

On redirect, the judge jumps in and says Evans is describing a distribution channel between developers and app users in which Apple has set up a "toll booth." But the judge points out that Apple "owns" the channel and it's proprietary. (This doesn't bode well for Epic.)

Judge "When we look at all these various channels, the objection is that on 1 of these many channels is the toll booth, which doesn’t exist on all of them, but exists on some of them. You’re saying either we want it to be free or we want to build our own channel on your platform"

Evans replies the "problem" is that Apple's anti-steering provisions make it difficult for users to know there are alternatives, and those alternatives like PCs and game consoles aren't "really realistic" substitutions in light of the accessibility/portability of smartphones.

The courtroom is sealed for profitability q's, but after this Evans should be done testifying. Next up will be Stanford economics prof Susan Athey, but it's unclear if a lunch break will happen before she's sworn in. Standby...

While we wait, s/o to my big dog Bennie, who is home alone today on his 3rd birthday probably destroying my house.

And we're back, but the judge says we're going to take a 40 minute lunch break until 1:15 p.m. PST.

Lunch is over, and Epic's expert Stanford economics professor Susan Athey is on the stand. She says high switching costs lock consumers into using Apple iOS and Apple blocks consumers and developers from using "middleware," which could reduce those costs.

Athey has been discussing high switching costs and the trouble consumers face in trying to move app subscriptions off iOS. Apple's counsel objected to Athey's testimony on consumer habits, arguing its outside the scope of her testimony and not in her written depo.

The judge sustained the objection and strikes the consumer-related testimony "except to the extent that it’s in the report."

Epic's counsel points to a 2013 email from Apple exec Eddy Cue to Tim Cook that says: “Getting customers using our stores (iTunes, App and iBookstore) is one of the best things we can do to get people hooked to the ecosystem..."

"The more people use our stores the more likely they are to buy additional Apple products and upgrade to the latest versions. Who’s going to buy a Samsung phone if they have apps, movies, etc already purchased? They now need to spend hundreds more to get to where they are today.”

Athey says Cue's email "articulates the precise logic I was discussing, and it articulates the choices were important both quantitatively and qualitatively" to Apple in trying to lock in users.

On cross now, Apple's counsel is grilling Athey on her past work for Microsoft. Athey says she disclosed her prior work for Microsoft on her CV and if anything was "overly generous" and that's why she hasn't reviewed Apple's confidential docs.

Apple's atty shows a presentation Athey prepared for Microsoft in October titled "Apple App Store Restrictions and REDACTED an Economic Perspective." Epic's atty objects, arguing the name of Athey's 'client' hadn't been disclosed. The judge said 'well, the cat's out of the bag.'

Apple's atty: You're imagining a world in which Apple can license its world to 3rd parties. What’s the plan? They should just sue everyone who comes on to the platform for patent infringement?

Athey: I’m fairly certain I didn’t say Apple [should] sue everyone on the platform

10 minutes until trial wraps for the day and this examination feels like hiking through a foot of mud.

Trial wrapped for the day without any revolutionary testimony (hallelujah). I'm off pool reporting duty and won't be back in court until Thursday. @SebasAHerrera is the pool reporter tomorrow sitting alongside someone from the NYT. Ciao ✌️