How Apple Lost Its Grip on the App Store

In 2021, a federal court ordered Apple to ease its control over the App Store. Nearly four years later, the same judge concluded that Apple had intentionally failed to comply, attempting to obscure its noncompliance. In a scathing opinion, Judge Yvonne Gonzalez Rogers stated that she would not offer Apple a second opportunity to rectify its actions, instead mandating specific changes to the App Store and diminishing Apple’s control after years of minimal adjustments.

The ruling reveals a calculated effort by Apple to evaluate compliance with the court’s original mandate while consistently opting for anticompetitive alternatives.

In its legal tussle with Epic Games, Apple was victorious in the majority of the case. However, it exited the trial with a court order that mandated developers could incorporate links and buttons within their apps, directing users to purchase options outside the App Store—referred to as the “anti-steering injunction.” This ruling was vague enough to allow Apple to continue collecting a fee on web sales.

Following the injunction, Apple sought to explore changes that would effectively “mitigate the ruling,” as evidenced by internal meeting notes.

One major decision revolved around whether Apple should charge any commission. The company evaluated various avenues: no cut while imposing link restrictions, billing developers based on app downloads or alternative metrics, or establishing a new commission for web sales with sales audits.

Progress on these discussions was intermittent as Apple appealed the original ruling. Once compliance was unavoidable, the company gravitated towards its preferred solution: reducing commission rates while maintaining an audit process.

According to the judge, Apple recognized that this option was the least favorable for developers. The company anticipated that eliminating all fees would be enticing for developers, albeit with stringent restrictions regarding web linking. “Apple believed that most larger developers, along with numerous medium and smaller developers, would provide link-out purchase options,” Gonzalez Rogers wrote, noting that the company projected a loss of hundreds of millions to billions in revenue from such a policy.