Apple CEO Tim Cook recently said that if developers get their way, the App Store will degenerate into nothing more than a “flea market.” The comment is strongly worded coming from Cook, but it shows how committed Apple is to protecting the App Store and the fee structure that nets the company billions. However, a lawsuit could determine the fate of Apple’s App Store business model in the future.
A lawsuit filed by Epic Games, the publisher of Fortnite, alleges that the App Store creates an uncompetitive marketplace and that Apple’s commission is excessive. Epic argues that Apple’s practice of taking 30-percent of all in-app purchases from developers is unreasonable, and that Apple has not always enforced its App Store rules uniformly. Epic wants to bypass these commissions by using its own payment platform.
It’s unreasonable to litter the App Store with thousands of incompatible payment systems, Cook recently suggested in comments given to the Toronto Star. Cook argued such a change would turn the App Store into a flea market, adding “And you know the confidence level you have at the flea market.” The rub for Apple is that the company would not collect its 30-percent if the flea market situation was to come to pass. At the same time, however, developers say they need the individualized platforms to stay profitable. The comments by Cook are part of an ongoing legal battle with Epic. While Epic may not have the weight of Apple, it’s no shrinking violet. Fortnite, for instance, was the most downloaded iOS game in 2018, and the company has some high-profile supporters as well, with Facebook, Spotify and Match having all come out publicly in support.
App Store Could Look Very Different After Court Case
So what would the App Store look like if Epic and others got their way? For starters the single payment platform that exists today could be supplanted by different platforms in most apps, although it’s likely Apple’s solution would still remain an option. Apple's argument is not only focused on the security threat, but how such a change could also threaten the stability of the apps, making it easier for developers to run afoul of their developer agreements. It’s a similar argument to the one Steve Jobs reportedly made when lobbying to keep third-party apps off of the iPhone entirely. The difference now is that there are billions of dollars in revenue on the line for both Apple and its developers. While it’s a cost that users are already paying for, Epic's proprietary payment platform offered a 20-percent discount for purchases, saying the discount was attributable to not having to pay Apple.
Apple already revoked Epic’s developer status and pulled Fortnite from its store when Epic violated its agreement. However, things haven’t always been so testy between Epic and Apple. In 2015 Epic and Apple shared the stage at Apple’s World Wide Developer’s Conference. The case is expected to go to court in July, but whether this will fully end the point of contention between Apple and developers remains to be seen.
Source: Toronto Star