Apple Claimed To Be Unaware Of Its App Store's Profit Margins

This week, a new and unexpected development in the Epic Games vs. Apple case brought a complete about-face. Thanks to this, Fortnite will return to Apple’s App Store next week in the US, according to the CEO of Epic Games. A new report revealed a bizarre situation during the trial. Apple apparently claimed to be unaware of the profit margins of its own App Store.

In 2021, a court order stated that Apple must allow developers to integrate shortcuts to their websites into their apps. This way, users could opt for alternative ways to make in-app purchases. Apple was not allowed to impose fees on transactions from outside the App Store. Years later, Apple has not implemented the change. Thus, the recent ruling determines that Apple willfully violated the court order. The situation could even lead to a contempt charge against Apple, representing another potential big problem for the brand.

Apple told judges it had no information on the App Store’s profit margins

Another consequence of the latest ruling is that app developers can integrate alternative payment methods from their websites without Apple taking a cut. During the trial, Apple was inquired about the App Store’s profit margins. However, as reported by Mark Gurman, the Cupertino giant claimed to be unaware of this information. Indeed, Apple said it doesn’t know how much money its own app store generates.

Apple’s claim is quite absurd and hard to believe. The App Store is one of the main sources of income in the company’s mobile and tablet ecosystem. It even sounds absurd to think they don’t keep track of transactions in the App Store. Gurman himself also said that it’s unlikely for a company as “detail-oriented” and “financially savvy” to not know this information.

Be that as it may, Apple’s defense was not sharp this time. Perhaps this was, in part, what led to the new ruling against the brand. Apple, of course, disagrees and will appeal the decision. However, in the meantime, developers are free to update their apps to facilitate alternative payment methods without Apple taking anything. This could result in a financial blow to the company. After all, getting a 30% cut of every in-app purchase within the App Store must translate into a healthy amount of millions/billions. This is especially true for a brand with such a gigantic user base.

iOS’ closed nature complicates things

It’s noteworthy that Google also takes a fee for in-app purchases in the Play Store. However, Android is a much more open OS, being easy to sideload apps. This even includes installing alternative app stores. Epic Games took advantage of Android’s nature and launched its own app store for smartphones. The mobile Epic Games Store is easily downloadable from the firm’s website. Prior to that, Apple faced pressure in Europe to permit the installation of alternative app stores.

The US market and other regions were lagging behind in terms of actions against Apple for anti-competitive practices. Now, things seem to be leveling out in two of the company’s largest markets.

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