Apple (AAPL) secured a partial win on Thursday after a U.S. appeals court agreed to reverse parts of an earlier order that would have forced major changes to its highly profitable App Store. However, the court also upheld a broader injunction from the Epic Games (PC:EPCGM) antitrust case.
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For context, the legal battle between Apple and Epic Games began in August 2020, when Epic attempted to bypass Apple’s 30% App Store commission for in-app purchases of Fortnite. Apple responded by removing Fortnite from the App Store, prompting Epic to sue, alleging anti-competitive practices. The case went to trial in 2021 and has continued through appeals.
While Apple largely won, a 2021 court order required it to let developers include links to alternative payment options. Apple partially complied but introduced a 27% commission on purchases made outside the App Store within seven days of using a link. Epic argued this violated the previous court order and asked the court to hold Apple in contempt, while Apple denied breaking any rules.
Mixed Outcome for Apple
Apple went to an appeals court to change a previous court order that forced it to make changes to the App Store. The court agreed to modify some parts of the order, saying they were too broad. Notably, the judges agreed to overturn the part of the order that prevented Apple from charging commissions on payments made outside the App Store.
However, most of the original ruling still stands, including the main restrictions and penalties from the earlier court decision in the lawsuit filed by Fortnite maker Epic Games. In short, Apple got a partial win, but not everything it wanted.
Epic Games CEO Tim Sweeney praised the latest ruling, saying it prevents Apple from imposing huge extra fees on developers and will help both developers and consumers. He added that, after years of Apple blocking changes, this decision will finally bring major improvements.
Apple’s Risk Analysis
According to TipRanks’ Risk Analysis Tool, Apple’s Legal & Regulatory Risks account for 18.5% of the overall risks, above the sector average of 17.3%.
Unlike Apple, Google (GOOGL) lost its court case with Epic Games, being found guilty of anticompetitive behavior. During the legal battle, Epic removed its hit game Fortnite from both the Apple App Store and Google Play Store. Fortnite returned to iOS in the spring and has now made its way back to Android devices.
Is AAPL Stock a Buy?
On TipRanks, AAPL stock has a consensus Moderate Buy rating among 33 Wall Street analysts. That rating is based on 21 Buys, 10 Holds, and two Sells assigned in the last three months. The average AAPL price target of $298.60 implies a 7.4% upside from current levels.
