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An epic dent in Apple’s App Store business model

Assif Shameen
Assif Shameen9/16/2021 8:8 PM GMT+08  • 9 min read
An epic dent in Apple’s App Store business model
The outcome of the Apple-Epic Games case could lead to an overhaul in the way app stores operate
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With the launch of the new iPhone 13 this past week, consumer electronics giant Apple may have updated its formidable line-up of 5G smartphones with faster processors and state-of-the-art cameras with low-light functionality, but the biggest update yet to its products is likely to be in its iOS App Store.

Just days before the unveiling of the iPhone maker’s latest gadgets, the long-drawn courtroom showdown between Apple and video game Fortnite reached an epic ending on Sept 10. Though the knockout winner was Apple, which won on nine of the 10 counts, Fortnite’s creator, Epic Games, won the last one on points. The case is being appealed, and unless the two sides reach an out-of-court settlement, more courtroom drama is expected as subsequent appeals could take years.

In her 185-page ruling, Federal Judge Yvonne Gonzalez Rogers declared that Apple was not a monopoly either as a distributor of smartphone apps or within its in-app payment (IAP) solutions. She ruled that smartphone users have viable alternatives to games consumed through Apple’s iOS apps, switching costs are low, barriers to entry are not high, iPhone maker’s IAP requirements are legal, and nearly all of its App Store policies are valid. Apple’s requirement for developers to use the App Store to distribute iOS games and apps makes the iOS more competitive against Android and gives consumers choices in the marketplace, the judge noted.

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