Apple Receives App Store Gut Punch in U.S., The Absurdity of It All, An App Store Dilemma
Hello everyone. Last Friday’s update was focused on Apple’s 2Q25 earnings. We will continue my earnings review later this week.
My full notes from last week's App Store anti-steering court ruling came out to about a week’s worth of updates. The 80-page ruling can be found here. Instead of spending four updates on the topic, my notes will be consolidated into two updates. For today, we are going to tackle a few major points that have been on my mind the past few days. Tomorrow’s update will discuss the points in greater detail. This is a crazy development that is up there as one of the more unusual turn of events that Apple has faced.
Let’s jump in.
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U.S. Appeals Court Sides With App Store, App Store Curation Is Key, Apple's Anti-Steering Loss Isn’t Major (Daily Update)
Hello everyone. Today's update will be dedicating to discussing the latest chapter of the Epic Games vs. Apple legal battle in the U.S. The U.S. Court of Appeals for the Ninth Circuit upheld all of the district court’s rulings that Epic had appealed. We go over Neil’s thoughts on the ruling, why App Store curation is playing such a big role with the App Store’s defense, and why Apple’s anti-steering provision loss isn’t a major blow to the company. Let's jump right in.
U.S. Appeals Court Sides With App Store
Back in September 2021, the U.S. District Court for the Northern District of California (the district court) issued its 185-page ruling in Epic Games vs. Apple. The district court's ruling was an unequivocal beating for Epic Games. We won’t go over all of the details of the case in this update. You can do so by reading the September 13th, 2021 daily update. Instead, there were four primary takeaways from that ruling:
iOS App Distribution. The district court ruled Apple can’t have a monopoly over iOS app distribution because that’s no different than saying a company has a monopoly over a service that only it can provide.
In-App Purchases. The district court found that IAP is not a separate product. Instead, it’s part of the iOS experience. That was a crucial determination as it played a role in the court declaring Apple’s requirement to have iOS developers use IAP (and Apple payment) as legal.
Switching Costs. The district court did not buy Epic’s arguments about the App Store increasing switching costs and customer lock-in. The court said Epic did not provide anything to show consumers actually faced switching costs moving from iOS to other gaming platforms.
App Store Curation. The district court upheld Apple’s App Store curation model involving human review.
On Monday, the U.S. Court of Appeals for the Ninth Circuit
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