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Apple made over $100 million in commissions from Fortnite, company executive reveals at trial

Michael Schmid, Apple's head of game business development for the App Store, received more than $100 million in commissions from Epic Games' Fortnite during the two years the online game was listed on the App Store.

(Picture: Reuters) (Picture: Reuters)

Apple made more than $100 million in commissions from Epic Games' Fortnite during the two years the online game was featured on the App Store, an Apple executive testified on Wednesday. Apple had previously revealed that Epic earned $700 million from the iOS version of Fortnite but said nothing about its own commissions. Michael Schmid, Apple's head of game business development for the App Store, took the stand during the third week of an antitrust trial in federal court in Oakland, California.

Schmid also testified that the App Store, which maintains an editorial team that highlights certain apps, had featured Fortnite and spent about $1 million in marketing the game over the previous 11 months before Apple's relationship soured with Fortnite. At a hearing before the US Senate last month, Apple Chief Compliance Officer Kyle Andeer, a former government antitrust lawyer, testified that Apple did not produce a publicly available profit and loss statement for the App Store.

During the antitrust trial, Epic's attorneys secured a document from the files of Apple Chief Executive Tim Cook that they argued tracked operating profits from the App Store. The document remains under seal.
Schmid said Apple's App Store team only began tracking commissions from Fortnite after it had been featured by the App Store editorial team.

Last year, Apple kicked out Fortnite from the App Store for violating its App Store Policy which demands a 30 per cent cut in commissions. Fortnite had created its own payment system which bypassed the AppStore rule. After getting kicked out from the App Store, Fortnite maker Epic Games sued Apple alleging that the iPhone maker had abused its power over developers by forcing them to use Apple in-app payment technology. Epic Games, a $29 billion company alleges Apple of running its App Store as a monopoly. Epic estimates Apple's profit from the App Store's fees is roughly 80 per cent.

Apple has defended its App Store policies noting that it is to ensure that the apps are of high quality. "Epic wants us to be Android, but we don't want to be. And our consumers don't want that either. They want the choice," Apple lawyer Karen Dunn was quoted as saying by CNBC. App Store boasts over 1.8 million apps. Apple does not allow iPhone users to side load apps like in the case of Android.