Apple just won a long-running appeals case in a bitter feud with Epic Games, that could have ended with Apple being forced to open up its famously closed-off iPhone app ecosystem.
It is bad news if you’ve always wished your iPhone were not tied to the App Store for apps and games, but this is not the end of the story.
Why did Epic Games sue Apple?
This case has been rolling on for almost three years. Epic sued Apple in 2020 because the company removed its popular Fortnite game from the App Store.
Why? Epic Games announced its intention to side-step the 30 per cent cut Apple takes from software and in-app purchase sales, by letting the public make payments outside of Apple’s platforms.
In the case, Epic Games effectively accused Apple of creating a monopoly. The US courts largely disagreed. In September 2021, Apple won out on nine of 10 points in the case. And, in the Ninth Circuit appeals court, that ruling was upheld on April 24.
Apple was not found to be running a monopoly. It only lost on an “anti-steering” point. This is where Apple stops developers telling us about promotions that might be available outside of the App Store. A special deal on a Netflix or Spotify subscription is a good example.
The US court’s ruling is a vote for the status quo. But that is not actually what is set to happen over the next couple of years.
How to install iPhone apps outside the App Store
New EU rules coming into effect in 2024 mean iPhones in Europe will have to be able to install apps other than those distributed by Apple’s App Store. This is part of the Digital Markets Act (DMA), which was passed in 2022 but won’t come into force for Apple’s App Store until March 2024.
If this comes into power as expected, iPhone users will be able to install third-party apps by a process called sideloading. This has always been an option with Android phones.
It will also open up the possibility for third-party app stores. Once again, these are readily available on Android. The most-used of these is the Amazon Appstore. You might think this is solely for the company’s Amazon Fire tablets and other devices, but it can be downloaded on any old Android phone.
Is this good news for iPhone owners? It seems likely this more open approach will only be applied where it is required, in Europe. And that will not include the UK in this case.
It means iPhone users will be able to access certain kinds of apps not available directly through the App Store, such as retro game console emulators. Geeks rejoice. The rest of us? The benefits are less obviously clear.
Is there an iPhone App Store alternative?
The recurring argument of these rules is that they reinforce competition and encourage innovation. However, that is not really what we’ve seen in Android. Third-party app stores like APKPure, Getjar, APKMirror, and Aptiode are only really of interest to nerdy enthusiasts, because of their flaky user experience, limited libraries, and sub-optimal security.
It’s not like gaming on PC, where platforms such as Steam, GOG, Epic Games, Windows Games, and others can effectively compete for the same audience.
Control is not going to be that easy to wrestle from Apple’s hands either. As it produces both the software and hardware, Apple has a high level of power over how its systems operate, and can specify how its APIs are used. These are building blocks that help iPhone apps work.
We’ve already seen this in action. In 2021, South Korea passed a law to make app stores accept payment methods other than the platform holder’s own. However, Apple still charged a 26 per cent commission on these payments, just slightly lower than the 30 per cent it makes from payments made to larger developers when paid using Apple’s own system. Smaller developers end up with 85 per cent of their earnings, rather than 70 per cent.
App Store revenues for 2022 are estimated to have been between $10 billion (£8 bn) and $15 billion (£12 bn), according to figures published by CNBC.
