Apple Seeks Sensitive Financial Data on Xbox Sales in Epic Trial
The first week of the Epic v. Apple trial had its ups and downs, but one of the highlights was testimony from Microsoft’s Lori Wright. As a witness for Epic, Wright talked about the difference between specific purpose (Xbox) and general-purpose (Windows) hardware, as well as Microsoft’s adventures trying to get xCloud in the App Store. Now, Apple is calling her testimony into question unless additional documents are entered into evidence, but Microsoft may balk at releasing sensitive data to a long-time competitor.
Apple is asking the court for an “adverse credibility finding” that would brand Wright’s testimony as untrustworthy. Apple’s gripe centers around the lack of certain documents referenced by Wright. According to Apple, the testimony included discussions of Xbox hardware costs and profits. Specifically, she repeated something we’ve all heard for years, that Microsoft sells the consoles at cost in order to subsidize the sale of games. Apple thinks Microsoft should have to provide an Xbox profit and loss statement to back that up.
This isn’t the first time Apple has attempted to use document availability to get its way. In April, Apple argued that Wright’s testimony should not be admissible due to the incomplete documents provided. This is not only a problem for Microsoft, though. The remote nature of the proceedings has led the parties to use a public-facing Box folder to store exhibits, but items have been clawed back on a daily basis when lawyers have deemed them too sensitive for release. Many of the documents also have significant redactions.
Microsoft wants Epic to prevail in the case, which could help it get more of its services on the iPhone going forward, and Wright’s testimony was seen as very positive for Epic. However, the court might rule that Microsoft has to turn over documents that substantiate what Write said about hardware revenues. Microsoft doesn’t compete directly with Apple on game consoles, but it probably doesn’t want to provide its long-time rival with sensitive information about Xbox profitability.
At issue in the case is whether the App Store’s walled garden approach stifles competition. Ever since the launch of the App Store, Apple has blocked third-party app installations while also charging a 30 percent fee for all sales. Epic tried to circumvent that fee with Fortnite, which it knew would get the game pulled. It had the lawsuit ready to go as soon as Apple took the bait. We don’t yet know if the gambit is going to pay off, but Microsoft isn’t the only bystander rooting for Epic. Companies like Spotify and Basecamp have also come out in favor of changes to the App Store.
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