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Apple CEO Tim Cook at the Epic trial in May. Photo by Bloomberg.
The Briefing
Apple Policy

Court Delivers Epic Ruling on Apple's App Store

By  |  Sept. 10, 2021 5:00 PM PDT
Photo: Apple CEO Tim Cook at the Epic trial in May. Photo by Bloomberg.

Today’s court ruling on Epic v. Apple is the kind of decision that seems to have something for everyone, even the news media (a big story on a Friday—yippee!). Apple won on most counts, including one of its counterclaims against Epic. But Epic prevailed on a key count: Judge Yvonne Gonzalez Rogers ruled that Apple’s policy preventing app developers from steering users to alternative payment options is anticompetitive. As wonky as that sounds, the implications for the App Store are similar to what would happen to your home if a busload of termites showed up out front. It might take a while but eventually the house would crumble. 

And this is no modest home. Apple’s operating profit margin on the App Store is more than 70%, the judge found in her ruling (she described the margins as  “extraordinarily high,” just to be clear). Based on estimates cited by a congressional investigation that Apple’s App Store annual revenue last year was around $17 billion, its operating profit would have been around $12 billion, or nearly 20% of Apple’s total. That’s the pile of money now at risk. And yet, judging by the 3.3% drop in Apple shares today, investors aren’t overly concerned.

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