The Aftermath of Apple v. Epic: Three Paths for the App Store and Fortnite's Return

Summary

Apple has lost a significant legal battle with Epic Games concerning the App Store's commission fees and restrictions on external payment options. In response, Epic CEO Tim Sweeney announced that Fortnite will return to the U.S. App Store next week, coinciding with Apple’s quarterly earnings report. This timing adds pressure on Apple as it faces potential consequences from the court decision.

Possible Paths Forward for Apple:

1. Comply: Apple could fully comply by removing or modifying its 27% fee and allowing app links to external payment options without added friction. While this would avoid further legal penalties, it could weaken Apple’s control over its App Store model.

2. Negotiate: Apple might seek a middle ground by negotiating a new implementation framework with Epic and the court. This would aim to satisfy the injunction while protecting Apple’s business interests. However, if Fortnite is already submitted for App Store approval, this strategy could lead to further legal issues.

3. Appeal: Given Apple’s history of exhausting all legal avenues, an appeal to the Ninth Circuit Court of Appeals seems likely. This would involve arguing that the 27% commission on digital goods purchased via in-app links either complies with the injunction or is being misinterpreted. Apple could also request a stay to pause enforcement while the appeal is pending.

Analysis:

• Appeal: Most probable, but not guaranteed to succeed and could lead to more legal battles.
• Negotiate: A long shot but might be pursued to protect key business interests.
• Comply: Possible but unlikely unless Apple can frame changes as compatible with the injunction.