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Legal threats: the end for Apple’s closed App Store?

From Epic Games to South Korea and the EU, Apple is fast finding itself embroiled in legal battles

Years ago, Epic Games founder Tim Sweeny questioned the need for app stores to take a 30% revenue cut. Such was his belief, hit game Fortnite didn’t appear on Android’s app store Google Play for many months, instead existing as an app you had to ‘sideload’ on to a device. Security concerns eventually forced Epic Games to relent – and, of course, sideloading was never a possibility on iPhone or iPad.

A sequence of events then unfolded that catapulted Sweeny’s pet issue into the mainstream. Fortnite was sneakily patched to allow the direct purchase of IAP, thereby circumventing app stores – and their cuts. Apple and Google both swiftly removed Fortnite from their stores. Lawsuits were filed, arguments were heard in court, and then, this September, Epic lost. Ish.

The judge found in favor of Apple taking its cut and dismissed other Epic arguments. But she found against Apple regarding anti-steering – the way the company bans app and game creators from pointing people elsewhere (such as to websites) to make or complete purchases. She gave Apple 90 days to comply. Apple appealed and has asked the order to be put on hold while everything plays out – which could take another year.

Not open for business

The problem for Apple is the company now fights similar battles across multiple fronts. South Korean law now demands app stores allow third-party payment methods for IAP. The EU is making threatening noises about forcing Apple to allow users to install apps from beyond the App Store. Unsurprisingly, Apple’s not keen, citing vast security threats.

Craig Federighi, Apple’s senior vice president of software engineering, responded to the EU by saying even people with no intention of sideloading apps could be coerced or tricked into doing so. He added that “one compromised device including a mobile phone can pose a threat to an entire network,” which can “jeopardize government systems, affect enterprise networks, public utilities… the list goes on.”

Yet there seems an inevitability about the broad direction of travel, even if we don’t yet know the fine details of the destination. What happens if and when Apple’s hand is forced? Will it comply with the spirit or the letter of the law? Will it fight until the bitter end or take it on the chin and hope the superior user experience and familiarity of its own systems win out in a freer market?

Arguably, Apple could and should have got ahead of all this. A proactive shift to lower App Store fees (rather than making tweaks when already under heavy criticism) would have stopped this particular spotlight shining on the company. Now there’s a great unknown ahead, but with the likelihood Apple will be forced – albeit grudgingly – to be more flexible.

We can imagine a future where you will be able to install apps from beyond the App Store on your iPhone, albeit after working through walls of alerts and warnings against doing so. And we’ll almost certainly see apps that can – at your request – send you elsewhere for subscriptions and other purchases.

The question is whether you’ll want to do these things. Federighi’s comments might whiff of hyperbole, but he’s not wrong. Installing an app or saving a few bucks on in-game virtual bucks might not have the same appeal in the harsh light of day when you suddenly find yourself outside the known, safe, secure quantity that is the existing App Store.