WHAT NEXT FOR THE APP STORE?

Why a US judge has ordered Apple to change its App Store rules and where it goes from here

- DAVID CROOKES

When the App Store launched in July 2008, it was nothing short of revolutionary. It democratized software distribution, drove innovation, changed how people worked and played, and created fresh opportunities. It also proved to be financially attractive.

Developers would receive 70% of the revenue of an app purchase, with Apple taking the rest. But while this 70/30 model was initially applauded given the poor deals developers were previously faced with, it wasn’t long before perceptions changed.

In 2011, Apple’s marketing chief, Phil Schiller, suggested the split may not be sustainable and, soon, more articles and social media posts also began to question whether it was fair. Among the developers keen to see a change was Tim Sweeney, CEO of Epic Games. He argued the 70/30 split — one that effectively became standard in the app industry — was unjustifiable and harmful to developers. In setting up the Epic Games Store in December 2018 as a digital storefront on Windows, his company offered developers 88%.

Epic was also beginning to make a splash with Fortnite — a game that ended up appearing on lots of different platforms, attracting some 650 million registered players. Among those platforms was the App Store — until Apple removed it in August 2020. This happened because Epic had found a way of bypassing Apple’s payment system by allowing users to purchase Fortnite’s in-game currency directly, thereby avoiding the 30% commission and from that point on, the gloves were off.

Epic sued, filing a legal complaint in the US District Court for the Northern District of California, and the case came before Judge Yvonne Gonzalez Rogers who, in May 2021, dismissed claims that Apple was a monopolist but ruled it was being anti-competitive.