Now it's adding podcasts, Forrest says. Schiller says that is iTunes not App Store.
Schiller says he receives regular reports on how much Apple is earning in search ads through the App Store. They are looking at one (which is sealed).
You are aware IAP requires developers to choose a price from a price tier, Forrest says. Schiller agrees. The prices must end in .99.
Schiller agrees that he testified yesterday that developers could not offer in-app payments before IAP was launched.
Forrest plays a clip of Scott Forstall, who says that there was an ability to sell in-app before Apple launched IAP. Schiller says he doesn't agree with Forstall's testimony
Do you recall before Apple launched its subscription in 2011, there were apps that offered subscriptions, Forrest asks. Schiller says there were some non-recurring subscriptions on IAP. They may have been called subscriptions but they weren't.
"There were no reoccuring subscriptions before we launched that feature," he says. Before 2011, could a developer offer a subscription, Forrest says. Schiller says he doesn't recall any developer being able to offer before IAP.
If they could offer subscriptions before 2011, when you put it in you increased the cost to developers by putting in a commission of 30 percent, Forrest says. Schiller says he's not sure what she is referring to.
Looking now at a 2010 email from Phillip Shoemaker that refers to "periodical subscriptions." Forrest says that indicates that subscriptions might have existed before 2011. Schiller says it might indicate they weren't following Apple's rules that all payments had to go through it
Now a Feb 2011 email from Schiller to Eddy Cue. This is before the announcement of the subscription service, Forrest says.
WSJ, Hulu, Rhapsody etc will need to offer subscriptions within our apps and remove links to outside of the app. Doesn't that suggest to you that there were others offering subscriptions before? Forrest says. Schiller says they were offering subs on their websites
If they had an app and had a subscription elsewhere, you were now going to charge them, Forrest says. No, Schiller says.
There were subscriptions that existed in the world before February 2011 and after Apple began to charge them 30 percent, Forrest says. No, Schiller says.
Forrest is asking about how they determined the 30 percent. Apple did not consider costs, she says. Correct, Schiller says. Don't most businesses when setting price consider the costs? she says. Not when you have one P&L, Schiller says.
When Apple set the commission, it did not analyze the cost of development for APIs, she says. Correct, Schiller says.
When Apple cut subscriptions for second years, it selected 15 percent because that was half, she says. That was part of it.
You don't have to consider costs when you are a monopoly charging monopoly profits, she says. I don't agree with that, Schiller says.
You're not aware of any analysis within Apple that Epic's payment system had any security vulnerability, Forrest says. Schiller says he's not aware of any.
Schiller says he's not aware of any study within Apple of any alternative payment systems for either digital goods or physical goods.
Apple has rejected apps for being stores within stores, Schiller says but he doesn't know how many.
Forrest asks if Schiller is familiar with WeChat. He says yes. WeChat was rejected for being a "store within a store," Schiller acknowledges.
We have many stores within stores, just not for games, Schiller says. We have many cartoon bookstores and comic bookstores, he says. All those stores have an array of content you can buy within the app, but not other apps, Forrest says.
Can a store actually be in the app store if itself contains other apps, Forrest says. No, we do not allow stores within stores for apps, Schiller says.
Moving on to the human App Review process. Schiller says there is an attempt to catch copycats of major apps before they go into the App Store.
Schiller says he only ever played Fortnite in Battle Royale. He never played as Peely.
And now we are taking our lunch break. Back at 1:15/4:15.
Back. Schiller confirms that TikTok, Instagram and Reddit are apps available on the App Store.
Forrest is showing Schiller an email from Jan. 30, 2008 to Scott Forstall. This is before IAP has been launched and there is an indication there are developers distributing games and game levels, Forrest says.
Schiller says he doesn't know if it's true but the email says the customer can purchase something on the website and get an activation key to put into the app.
There was some use case for it, Schiller says, it was not available on the iPhone. Was there a technical prohibition, Forrest says. It was in the guidelines, Schiller says, that all purchases need to happen through the App Store and can't have additional features or functionality
That's why the email refers to a "leak in the system," Forrest says. No, Schiller says.
Moving onto Apple's Enterprise program.
The enterprise program allows third-party downloads onto the iPhone without going through the App Store, Forrest says. Schiller agrees. Forrest asks if there have been any security issues from those downloads. Schiller says he's not aware of any.
Schiller confirms he has not made a phone call on a gaming console or used it for a banking app.
Going back to that discussion unlocking keys for games, Forrest notes that the guidelines weren't published until 2010. Schiller says they had documents for developers and they didn't include an option for them to use payments outside Apple.
Forrest asks about Schiller's testimony yesterday that it doesn't compete for the ads it sells within the App Store. The algorithm preferences Apple’s products, Forrest says. I do not agree, Schiller says.
Forrest is walking Schiller through some searches for books, music and news. Apple's products show up first in each search. Apple preferences its own apps, Forrest says. No, he says. The algorithm looks at 42 variables to give the user what its trying to find.
Forrest is done. Apple's Richard Doren will be up in a minute for re-direct.
Ah, going back to that Jan. 30, 2008 email. Schiller acknowledges the App Store did not yet exist and initially Apple didn't want to allow in-app purchases.
They wouldn't add in-app purchases until the next year, 2009, he says.
On the enterprise program, Schiller says Apple works with large companies, vets them and gives them a special security key to allow them to download to devices. They have to sign an agreement they will only download to employees and not "consumers in the wild."
Schiller says he is aware of abuses of the enterprise program. Apple has found places where employees of a company have, unbeknownst to employer, given keys to rogue sites that will pirate software. It has led to malware attacks. Apple is been "tightening" the program as a result
Schiller says he loves getting complaints because it helps make the App Store better. (He is discussing a developer complaint that was forwarded to him by Tim Cook)
The developer was working on a keyboard extension that could turn the keyboard into a calculator, Schiller says. It technically violated the guidelines, but Apple thought it was a good idea and worked with him.
Do you know if the Coalition for App Fairness members testified at the Senate hearings? Doren asks. Schiller says yes: Spotify, Tile and Match are all members and did.
Spotify and Match have been strong advocates in the EU against Apple, he says. Has Epic complained in the EU about Apple? Doren asks. Schiller says he believes they have.
Schiller says the Russian law requires smartphone makers preinstall or offer for default a list of apps designated by the government promoting Russian apps. He says it doesn't have anything with app review

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More from @leah_nylen

20 May
Day 14 of #epicvapple. I feel a bit like a marathon runner entering the last few miles. The end is in sight, just have to get there.
Today's reporters are @mslopatto and @Siliconlaw. We're getting a few more expert witnesses from Apple today: UCLA's Dominique Hanssens; James Malackowski, CEO of Ocean Tomo; and Aviel Rubin from Johns Hopkins
YGR says she felt "too much stress" to watch the Warriors-Lakers game last night.
Read 42 tweets
19 May
Welcome to Day 13 of #epicvapple. @joshua_sisco and @BobbyAllyn are doing double duty and are back in court again today.
Apple’s Michael Schmid, who works with game developers, will be back up on the stand this AM. After he’s done, Craig Federighi, senior vice president of software engineering at Apple, will testify followed by Dominique Hanssens, Apple’s marketing/survey expert
YGR says she works every weekend during trial because she has "hundreds of other cases" and those do not end at the end of the trial day.
Read 221 tweets
18 May
Doren returns to the sexual terms. There are categories of things we don't want on our store like pornography, Schiller says. When you have categories of apps, like dating apps, developers will try to find where the line is. "It's not an easy task," he says.
It would be inappropriate for Apple to reject dating apps because of the people who use them, Schiller said.
Nudity is allowed for medical apps, but pornography is not permitted, Schiller says. "It's been a very difficult topic," he says of porn. Apple sets rules like the display of genitalia to help the app reviewers, Schiller says.
Read 58 tweets
18 May
And now, back to our regularly scheduled #epicvapple coverage. Apple's Phil Schiller will be back up on the stand this morning. Expect him to have a tougher reception today as Epic's Katherine Forrest gets her chance at questioning.
Today and tomorrow, we have @joshua_sisco and @BobbyAllyn as the in-court reporters.
If Schiller finishes today (he might or might not depending on the cross examination), Apple's Michael Schmid, head of game business development for the App Store, is up next.
Read 160 tweets
18 May
And lastly, my fave topic of all: SEPs. Last night, @JusticeATR filed a letter with the 5th Circuit.
Some background: the Trump admin DOJ AAG Makan Delrahim had strong views on the intersection of antitrust and IP, views that contradicted those held by the Obama DOJ.
Under Delrahim, DOJ weighed in on a number of private #antitrust cases with "Statements of Interest" expressing views on antitrust-IP. One such case involved Continental Automotive, which had sued Avancii a patent company that owns SEPs needed for connected car tech
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18 May
In pharma #antitrust, @oversightdems released a staff report this AM on Abbvie and Humira…
@OversightDems Among the findings, Abbvie knew Humira, a blockbuster arthritis drug, would face biosimilar competition in 2017, so it took steps to delay that until 2023. The company's internal documents estimate that cost the U.S. health care system $19B
Abbvie has sought or obtained 250 patents related to Humira, the report found. The company has invested a lot of its R&D into a Humira “enhancements” program to protect against biosimilar competition.
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