Apple Reportedly Buying Ads for High-Value Apps To Compensate for Epic Ruling
Apple and Epic Games duked it out in court recently, and Apple came away with an almost total victory. But Apple isn’t accustomed to not getting its way, and it’s not taking that minor loss laying down. With Apple forced to let developers direct customers to non-Apple payment options, the iPhone maker has resorted to buying ads for high-value apps that send potential customers to its App Store, so it can keep getting its cut of subscriptions, reports Forbes.
Epic’s lawsuit against Apple was officially about Fortnite, but Epic sought to make it a referendum on the entire App Store model. According to Epic, allowing Apple to rule over iOS software with an iron fist is a violation of antitrust regulations. The court disagreed, handing Apple a major win… except when it comes to payments. The judge ruled that Apple can’t prevent developers from encouraging their users to buy products and subscriptions from non-App Store platforms. That deprives Apple of its revenue cut, which can be as high as 30 percent.
As the date of the change approaches, some popular developers are complaining that Apple has started advertising their apps. That might sound like a good problem to have, but Apple has an ulterior motive. By buying up ads for apps like HBO Max, Tinder, and Masterclass, it can make sure it continues to get the App Store cut. Apple has reportedly been doing this for about two years, but it’s ramping up as the required changes go into effect.
Apple has publicly expressed its displeasure at being forced to make even this small change. It has attempted to get the ordered suspended, but a judge last week ordered the company to comply by December 9th. Apple, meanwhile, contends that this will be the first time it has allowed developers to direct users to an outside link, and it needs time to decide how to proceed. However, it seems Apple really just wants time to figure out how it’s going to compensate for the lost revenue. Apple, for its part, claims that it has been running App Store ads for years, and it doesn’t see any problem with it.
There’s nothing to stop Apple from advertising the apps in the App Store, and it might help some developers in the long term. However, it reduces the number of customers who could end up buying things directly from the developer now that such things are possible, and it makes ads more expensive if the developer wants to compete. Epic’s lawyers would probably point to this as further evidence that Apple behaves in an anti-competitive fashion. Regardless, the courts have been unwilling to reign in Apple’s excesses thus far.
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