App developers to benefit from Apple and Epic Games lawsuit ruling - The Average Joe

    App developers to benefit from Apple and Epic Games lawsuit ruling

    Victor Lei — Head of Research

    September 14, 2021

    Epic games

    September 14, 2021

    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).

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