Apple will win this case, but there are several ways the App Store’s walled garden could give more ground before the appeals are done.
From “Apple Epic Trial Check-In” posted Wednesday to Loup Ventures subscribers:
A potential compromise As it stands today, Apple prohibits developers from informing app users that they can subscribe or make purchases outside the App Store to avoid Apple’s 30% cut, and thus pay lower prices. For example, a Fortnite user could buy V-Bucks (virtual currency) from their web browser or Xbox console and then use them while playing Fortnite on iOS.
Judge Rogers has raised the possible compromise that Apple undo this policy, which would allow developers to explicitly advertise within apps that consumers can subscribe and make purchases outside of the App Store. We believe this compromise would be a reasonable outcome of the trial.
Putting it together If Apple is victorious, the App Store status quo will carry on. That said, we believe the company will likely proactively moderate their take rates over time to remain in the good graces of government regulators. Apple has already halved its take rate to 15% for small developers earning less than $1m in annual App Store revenues, and we believe this decision foreshadows more favorable pricing for all developers down the road.
The bottom line is that regardless of how Judge Rogers rules, the trial’s resolution will provide near-term clarity and certainty for Apple and its investors, which is always a good thing. That said, one negative for Apple is that the trial is shedding more light on the company’s dominant position as it relates to iOS app distribution and payments. This will likely only increase congressional and regulatory scrutiny towards Apple.
My take: Apple will win on appeal and slow-roll the regulators as long as it takes.