Apple’s nearly as unstoppable as a young Shang — fending off lawsuit after lawsuit. A year-long battle between Apple and Epic Games is reaching a climax with a judge ruling impacting Apple and companies relying on Apple’s app store.
Welcome to the circus
Apple and app developers have a long-standing love-hate relationship. While Apple funnels customers to developers through the app store, they also take a massive 30% fee off developers for most in-app purchases.
One app developer, Epic Games, creator of Fortnite, stood up to Apple — leading to lawsuits against each other:
- Apple sued Epic Games for bypassing Apple’s 30% fee — by sending users to Epic’s own payment system — a practice banned by Apple.
- Epic Games sued Apple back for allegedly using its operating system to prevent competition.
After a year-long court battle, on Friday, the judge gave her ruling favoring Apple — Epic having failed to prove that Apple’s app store is in violation of antitrust law. But Epic did receive a small win — sending a shockwave throughout the industry.
Big win for app developers
The judge handed out an injunction preventing Apple from forcing apps to use its in-app payment.
- Before: Users had to make app purchases through Apple’s payment system — giving Apple a controversial 30%.
- After: Instead of paying through the App Store, developers can now send users to an external payment page.
The move had major implications — developers now have an option to bypass Apple’s 30% fee. Which means, more profits for apps like:
- Dating: Bumble and Match Group
- Gaming: Zynga and Roblox
- App developers: Unity Software, AppLovin
Investors: Out for regulatory blood
This is only one of many fights coming for Apple and other big tech giants. Biden’s administration is out for blood, with more potential lawsuits coming:
- Biden appointed big tech critic Lina Khan to the chair of the Federal Trade Commission.
- Both Republican and Democratic lawmakers introduced new antitrust bills.
Google is the target of several lawsuits from state attorneys but its stock price tells a different story — up 65% this year. Facebook is also up 40% despite its many lawsuits.
So far, these lawsuits have had little impact on big tech stocks but as we’ve learned from history, no company is immune to regulations (Microsoft).
