Epic vs. Apple App Store trial ruling: What developers, big tech, and analysts think

Posted:
in General Discussion edited September 10
The judge presiding over the Epic Games v. Apple case issued a ruling on Monday that is largely a win for Apple -- minus some App Store concessions about in-app payment mandates. Here's what other companies, analysts, and groups think about the decision.

Credit: Apple
Credit: Apple


U.S. District Court Judge Yvonne Gonzalez Rogers on Friday ruled that Apple was not a monopolist. However, Judge Gonzalez Rogers banned Apple's practice of prohibiting App Store developers from steering users to outside websites for alternative payment options.

Apple declared the decision a "resounding victory," while Epic Games was unhappy with the ruling and reportedly plans to appeal. Here's what other companies, groups, and analysts had to say.

Katherine Adams, Apple's general counsel

"The Court correctly rejected Epic's 'artificial' view of the competitive environment in which Apple operates and determined that 'developers like Epic Games have benefited from Apple's development and cultivation of the iOS ecosystem, including its devices and underlying software,'" Adams said in the statement. "Underlying the App Store business is a framework, including App Review, curation and protection of the security and privacy of our users. The Court has ruled that this framework is lawful and Apple was justified in terminating Epic's status as a developer on the App Store."

Tim Sweeney, Epic Games CEO

"Today's ruling isn't a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers," Tim Sweeney wrote on Twitter. "Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers."

"Thanks to everyone who put so much time and effort into the battle over fair competition on digital platforms, and thanks especially to the court for managing a very complex case on a speedy timeline. We will fight on," Sweeney added.

Spotify

Spotify, which has conducted its own battles against Apple's App Store policy, was happier with the decision than Epic Games. The company and its executives have criticized Apple's 30% commission and other policies in the past.
We are pleased with Judge Yvonne Gonzalez Rogers' finding that Apple engaged in anti-competitive conduct and has permanently prohibited their anti-steering provisions. This and other developments around the world show that there is strong need and momentum for legislation to address these and many other unfair practices, which are designed to hurt competition and consumers. This task has never been more urgent.

App Association

The App Association is an advocacy group, representing smaller developers.
Today's decision illustrates Apple is not a monopolist and keeps in place the services and benefits our members rely on to compete on a global scale. Importantly, the order does not require Apple to allow sideloading of potentially fraudulent or harmful software. While the changes around communications with customers may benefit some developers, they still pose a risk that a few rich companies avoid contributing equally to the App Store's services. The App Association will continue to advocate for policies that benefit our members and not just line the pockets of billion-dollar brands.

iOS app developers

Various iOS app developers and other App Store-adjacent people in the industry had mixed feelings about the ruling.

Apple just lost a huge part of the Epic vs Apple case, breaking open the App Store to alternate payment systems -- Apple will almost certainly appeal the ruling, but with the pressure mounting globally over this very issue, I think the writing is on the wall

-- Steve Troughton-Smith (@stroughtonsmith)


Today's ruling on Epic v. Apple is good for everyone involved. We probably won't use it for @halidecamera, but I applaud it.

It does boggle my mind that Apple is conceding through lawsuits instead of changing App Store policy proactively to avoid anti-trust scrutiny. https://t.co/yHE5hlx9jT

-- Sebastiaan de With (@sdw) September 10, 2021


Yep. It seems to me that in order to get users to dump IAP and switch to their own payment system, developers will have to offer a discounted price no less than Apple's price -30%. Will be interesting to see which ones try it.

-- Adam Kovacevich (@adamkovac)


The Apple/Epic decision will likely make the app store more of a default commerce hub.

The same reason you can't buy a kindle book in the iOS app has been holding back thousands of apps from offering other goods and purchases.

-- Matt Zieger (@mattzieger)

Loup Ventures

Loup Ventures' Doug Clinton and Gene Munster discussed the ruling on Friday, suggesting that it will likely remain a hot topic of discussion for at least the next year. Clinton and Munster believe that the ruling itself, and its ban on anti-steering provisions, will be a fractional financial headwind for Apple.

"The two silver linings for Apple investors: 12-18 months after the changes have been implemented, growth rates will return to normal. Second, Apple's long-term potential is not impacted by the decision," said Munster.

Harsh Kumar, analyst at Piper Sandler

While we are still digesting the announcement, we believe the strength of Apple's ecosystem across both hardware and software/services creates a sticky platform for developers. Users will ultimately balance between ease of use and price regarding in-app purchases, and we feel the Apple ecosystem still has a major role to play in that process. Overall, we do not believe today's announcement has a major impact on the company's upcoming launch event on September 14. In addition, we do not believe it has a material impact on the broader business at this point in time. We reiterate our Overweight rating.
Piper Sandler maintains its $175 12-month Apple price target.

Samik Chatterjee, analyst at JP Morgan

"Our first impression on the ruling in the Epic v. Apple lawsuit is that the changes required by the Court to anti-steering policies, while incremental to changes already done by Apple in recent weeks, still does not lead to any material change in our outlook for Apple's Services/App Store revenue and earnings," Samik Chatterjee writes.

The analyst goes on to say that the ruling marks "only the first leg of a multi-step and multi-year process," with more final tweaks to App Store policies potentially looking "more moderate than the judgment itself as this time."

JP Morgan maintains its $180 12-month Apple price target.

Daniel Ives, analyst at Wedbush

"Ultimately, it is likely that game publishers and developers will see a material increase in gross margin as the amount paid for in-app purchases shrinks to lower levels," said Ives of the decision.
We anticipate that certain of these entities will pivot to the use of third-party payment systems that take a lower cut than Apple. Some of these parties may develop payment systems of their own, with Unity in a position to integrate enhanced payment functionality and its own payment system in its proprietary game development engine. We believe that initially there will be some friction among consumers to veer away from the convenience and trust that the Apple solution provides, but over time, as well established developers and payment operators prove the utility of their own solutions, there will be mix shift to the detriment of Apple and the benefit of the companies discussed above.

Wedbush maintains its $185 12-month Apple price target.

Read on AppleInsider

Comments

  • Reply 1 of 20
    stukestuke Posts: 110member
    So, everyone, look for apps that offer an alternative in-app payment system and watch to see that it is discounted by 30% from what Apple's terms would have dictated through the developer lumping it on top.  See how many actually give you a discount.  Those that do will NEVER give it all away so now you can weigh your trust in Apple (at 30%) vs. any one particular developer, big or small, at something less than 30%, but likely never 0% adder.

    Oh, and keep in mind, Apple does not have to allow you to play in their iOS store...don't forget that key fact!
    retrogustolineywatto_cobra
  • Reply 2 of 20
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    watto_cobra
  • Reply 3 of 20
    crowleycrowley Posts: 8,890member
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    IreneW
  • Reply 4 of 20
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    Maybe I'm misunderstanding your question, but ads within the app?
  • Reply 5 of 20
    macxpress said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    Maybe I'm misunderstanding your question, but ads within the app?

    This whole thing is about in app purchases outside of the App Store please pay attention.
    watto_cobra
  • Reply 6 of 20
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.

    If you're trying to be funny you're failing miserably.
    watto_cobra
  • Reply 7 of 20
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    You charge for every app download that uses an alternative method as noted by someone else here. App didn’t have to Open the App Store with native access to 150k APIs. They could have left it as webapps like the original iphone. Nothing is free. 
    killroydanoxwatto_cobra
  • Reply 8 of 20
    danoxdanox Posts: 636member
    The small to mid sized developers get crushed, and Apple won’t be doing any side loading so everything will a charge like living in Florida or Texas.
    watto_cobra
  • Reply 9 of 20
    Can Apple still set any requirements for the in-app purchase message? For example, can Apple insist that it just be a text message and not a clickable link?
    watto_cobra
  • Reply 10 of 20
    mcdavemcdave Posts: 1,783member
    Better sign up now guys, looks like the developer costs are about to increase drastically $10K per head per year should probably cover it.

    If apps now include 3rd party payment systems requiring users to enter our financial details, App Store approval should demand user protection and insist on correct implementation of the Authentication Services framework for strong password management. And as the foundation of the argument is anti-competitive the Apps should be forced to include Apple’s existing 1st party payment service (otherwise the ruling has simply moved power from one mandatory service to another)
    watto_cobra
  • Reply 11 of 20
    Apple already set itself ready for the future, the big streaming platforms ones a big contributor already do most of their transactions outside the AppStore. So what did Apple do, it created ATV+, AM, FITNESS+, Apple Arcade and cloud storage, it will take time but these services and the 10’s of thousands of small developers will keep the services revenues growing. They just need some hits in the respectively services and of they are … they have the money and tenacity.
    watto_cobra
  • Reply 12 of 20
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    Easy, you charge every app that uses a third pay payment system outside of the AppStore a monthly per user fee for use of Apple’s API’s along with an additional monthly developer fee to cover business related expenditures such as R&D, use of intellectual  property, etc.  

    This price has to be paid up front or no listing of your Free App that charges iOS user outside of the App Store for anything period.

    As an Apple shareholder, I say no more freeloading by Netflix and others on iOS devices. Pay me and my fellow shareholders upfront for our iOS investment! 


    edited September 11 lineywatto_cobra
  • Reply 13 of 20
    crowleycrowley Posts: 8,890member
    genovelle said:
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    You charge for every app download that uses an alternative method as noted by someone else here. 
    Discriminatory.  No way that'll pass for any length of time without a new series of lawsuits.
  • Reply 14 of 20
    crowleycrowley Posts: 8,890member
    killroy said:
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    If you're trying to be funny you're failing miserably.
    Not trying to be funny at all.  When the App Store was first introduced it was stated and widely commented upon that it would be run with an aim to break even, as an ecosystem for the iPhone.  That original purpose has drifted and it is now a profit centre in itself.  I'm saying that it doesn't need to be a profit centre, Apple makes lots of money on devices and they could be a lot more developer friendly and competitive by only aiming to break even.  That increases the appeal of devices, which they can make more money selling.

    I believe it was Phil Schiller that expressed similar sentiments in a recently revealed email.

    I'm not saying that the App Store couldn't use any tweaking to account for free to play freeloading; a per app hosting fee may well be in order.  But profiteering off in-app purchases that Apple do not incur any overhead for just seems petty and greedy.
    muthuk_vanalingam
  • Reply 15 of 20
    danoxdanox Posts: 636member
    crowley said:
    genovelle said:
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    You charge for every app download that uses an alternative method as noted by someone else here. 
    Discriminatory.  No way that'll pass for any length of time without a new series of lawsuits.

    Lawsuits will happen anyway pay up or use Android…..
    watto_cobra
  • Reply 16 of 20
    crowleycrowley Posts: 8,890member
    danox said:
    crowley said:
    genovelle said:
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    You charge for every app download that uses an alternative method as noted by someone else here. 
    Discriminatory.  No way that'll pass for any length of time without a new series of lawsuits.

    Lawsuits will happen anyway pay up or use Android…..
    What?  That neither makes any sense, nor provides any stable platform of reason to determine what Apple should do.  

    If they're going to incur lawsuits anyway then they may as well go full evil empire and start genetic experiments on conjoined puppies.
  • Reply 17 of 20
    danoxdanox Posts: 636member
    crowley said:
    danox said:
    crowley said:
    genovelle said:
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    You charge for every app download that uses an alternative method as noted by someone else here. 
    Discriminatory.  No way that'll pass for any length of time without a new series of lawsuits.

    Lawsuits will happen anyway pay up or use Android…..
    What?  That neither makes any sense, nor provides any stable platform of reason to determine what Apple should do.  

    If they're going to incur lawsuits anyway then they may as well go full evil empire and start genetic experiments on conjoined puppies.

    No you make no sense Apple will sued for something no matter what the outcome is with Epic. Epic like Intel will find out what happens when poke at Apple, Apple hasn’t really been interested in games or game engines not really…., Epic and Stream like Intel (CPU’s) may start to find out what real disruption is.
    watto_cobra
  • Reply 18 of 20
    crowleycrowley Posts: 8,890member
    danox said:
    crowley said:
    danox said:
    crowley said:
    genovelle said:
    crowley said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    You sell the device that it's played on.
    You charge for every app download that uses an alternative method as noted by someone else here. 
    Discriminatory.  No way that'll pass for any length of time without a new series of lawsuits.

    Lawsuits will happen anyway pay up or use Android…..
    What?  That neither makes any sense, nor provides any stable platform of reason to determine what Apple should do.  

    If they're going to incur lawsuits anyway then they may as well go full evil empire and start genetic experiments on conjoined puppies.

    No you make no sense Apple will sued for something no matter what the outcome is with Epic. Epic like Intel will find out what happens when poke at Apple, Apple hasn’t really been interested in games or game engines not really…., Epic and Stream like Intel (CPU’s) may start to find out what real disruption is.
    What have game engines got to do with anything?  Idle threats aren't going to solve any issues.

    Look, I get your point, Epic are probably going to purse Apple from every available angle for the foreseeable future, and it will be very tedious for everyone.  But all the more reason to not give them any obvious angles by using discriminatory tactics.
  • Reply 19 of 20
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    It's clearly not a profit-making setup.
    edited September 13 watto_cobra
  • Reply 20 of 20
    liney said:
    killroy said:
    Other than server fees, how do you make money off of free to play when the app uses another payment system for in app purchase.
    It's clearly not a profit-making setup.
    Like working for a gig economy company or being a sharecropper, Apple will charge for their ecosystem the stooges who think otherwise are delusional.
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