Earlier today, U.S. District Judge Yvonne Gonzalez Rogers gave her judgment on the Epic Games vs. Apple case. While the verdict finds Epic Games in violation of its contract, it also calls Apple’s anti-steering policy “anti-competitive” and orders the tech giant to allow developers to link alternative payment options outside the App Store.
According to Bloomberg’s Mark Gurman, with this ruling, Apple has dodged a big bullet at the cost of losing a few billion dollars.
Apple to maintain its control over the App Store’s in-app purchases payment structure at the price of $1 to $4 billion dollars
In this case, the stakes were very high for Apple. It was not just fighting to charge a commission for in-app purchases but more importantly, it was fighting against the admission of third-party app stores on iOS devices. The tech giant had argued that if third-party app stores were allowed on iOS that would jeopardize the safety and security of users by giving miscreants unchecked access to their personal devices, iPhones.
“We are still analyzing the decision, which is 180 pages long,” Apple’s Adams added, “but the headline is that Apple’s app store business model has been validated.”
As per the report, the $2.5 trillion company might lose $1 to $4 billion annually which will not break Apple’s bank. The report states:
So how much does Apple stand to lose? That all comes down to how many developers try to bypass its payment system. Loup Venture’s Gene Munster, a longtime Apple watcher, put the range at $1 billion to $4 billion, depending on how many developers take advantage of the new policy.
It is also mentioned that the judge only granted permission to add links to websites which some developers might not have. And to save themselves the cost of web development and management, developers might continue to use the same App Store in-app purchases model.
But even if the ruling ends up costing Apple a few billion dollars a year, that’s still a small fraction of its total revenue. In fiscal 2021 alone, the company is estimated to bring in more than $360 billion, meaning the change won’t make or break its overall financial performance. And many developers may choose to stick to Apple’s payment system so they don’t have to build their own web payment platform.
During the trial, Snapchat’s CEO Evan Speigel said that they are happy with paying 30% commission fee to Apple because Snapchat would not have existed without the software and hardware advancements that the company has offered over the years. Maybe others feel the same way.