Some Epic v. Apple Post-Decision Followup ⇥ stratechery.com

How was your weekend? Mine was pretty quiet. I made a peach crumble that I daresay turned out real nice, even though my baking skills are terrible — which is why I make crumbles instead of pies.

Epic Games’ lawyers, on the other hand, were hard at work. The company paid its court-ordered six million dollar penalty — which CEO Tim Sweeney announced with a low-resolution Apple Pay logo for some reason — and filed its expected appeal.

Sarah Perez, TechCrunch:

The appellate court will revisit how Judge Gonzalez Rogers defined the market where Epic Games had argued Apple was acting as a monopolist. Contrary to both parties’ wishes, Gonzalez Rogers defined it as the market for “digital mobile gaming transactions” specifically. Though an appeal may or may not see the court shifting its opinion in Epic Games’ favor, a new ruling could potentially help to clarify the vague language used in the injunction to describe how Apple must now accommodate developers who want to point their customers to other payment mechanisms.

After some catch-up reading today, I think my takeaway on Friday stands. This ruling was well-written and well-articulated; but, while the intention of the injunction was implied, its implications for Apple and developers are still unclear.

I generally agree with Marco Arment’s imagined result:

As a developer, I’d love to see more changes to Apple’s control over iOS. But it’s hard to make larger changes without potentially harming much of what makes iOS great for both users and developers.

Judge Gonzalez Rogers got it right: we needed a minor course correction to address the most egregiously anticompetitive behavior, but most of the way Apple runs iOS is best left to Apple.

I still think there are more things that regulators ought to be looking into when it comes to the expansive offerings of companies like Apple, Google, and Microsoft. But I think Arment makes a good case for the almost status quo.

(Update: I keep thinking about the likelihood of the sideloading doomsday scenarios that Arment writes about. This next part of the parenthetical will only make sense if you read his post: I could see Facebook creating its own app marketplace for iOS, but I am unclear why developers would need to submit their apps to multiple marketplaces, so long as Apple gets to keep its first-party App Store. An adjacent anxiety is the piecemeal way application marketplaces are being regulated. If Apple would like to retain some level of control over the way the iOS app model works around the world, I hope it sees what regulators are looking into and is able to work with them to assuage their concerns, because a Facebook app marketplace is a worrisome prospect indeed.)

I also appreciated Ben Thompson’s take summarizing some of the court’s definitions and legal justifications; here, quoting Judge Gonzalez Rogers’ decision:

If Apple could no longer require developers to use IAP for digital transactions, Apple’s competitive advantage on security issues, in the broad sense, would be undermined and ultimately could decrease consumer choice in terms of smartphone devices and hardware…to a lesser extent, the use of different payment solutions for each app may reduce the quality of the experience for some consumers by denying users the centralized option of managing a single account through IAP. This would harm both consumers and developers by weakening the quality of the App Store to those that value this centralized system.

That was a lot of legalese, but this is the takeaway: IAP is distinct intellectual property from developer tools broadly; it is the entire set of app management tools, not just a payment processor; and Apple has legitimate competitive justification to require IAP be used for in-app purchases.

Interesting days ahead for the App Store. This modest corrective action is, I think, a good step toward a store that improves users’ experiences while opening up new possibilities. I still hope Apple takes greater advantage to simultaneously release regulatory pressure and the hostility felt by developers.