U.S. Appeals Court Sides With App Store, App Store Curation Is Key, Apple's Anti-Steering Loss Isn’t Major (Daily Update)

Hello everyone. Today's update will be dedicating to discussing the latest chapter of the Epic Games vs. Apple legal battle in the U.S. The U.S. Court of Appeals for the Ninth Circuit upheld all of the district court’s rulings that Epic had appealed. We go over Neil’s thoughts on the ruling, why App Store curation is playing such a big role with the App Store’s defense, and why Apple’s anti-steering provision loss isn’t a major blow to the company. Let's jump right in.

U.S. Appeals Court Sides With App Store

Back in September 2021, the U.S. District Court for the Northern District of California (the district court) issued its 185-page ruling in Epic Games vs. Apple. The district court's ruling was an unequivocal beating for Epic Games. We won’t go over all of the details of the case in this update. You can do so by reading the September 13th, 2021 daily update. Instead, there were four primary takeaways from that ruling:

  • iOS App Distribution. The district court ruled Apple can’t have a monopoly over iOS app distribution because that’s no different than saying a company has a monopoly over a service that only it can provide.

  • In-App Purchases. The district court found that IAP is not a separate product. Instead, it’s part of the iOS experience. That was a crucial determination as it played a role in the court declaring Apple’s requirement to have iOS developers use IAP (and Apple payment) as legal.

  • Switching Costs. The district court did not buy Epic’s arguments about the App Store increasing switching costs and customer lock-in. The court said Epic did not provide anything to show consumers actually faced switching costs moving from iOS to other gaming platforms.

  • App Store Curation. The district court upheld Apple’s App Store curation model involving human review.

On Monday, the U.S. Court of Appeals for the Ninth Circuit

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Apple Lends $250M to Globalstar, Why Doesn’t Apple Get Into Satellites?, EU Narrows Apple Probe (Daily Update)

Hello everyone. Today’s update kicks off with Neil’s thoughts on Apple lending $250M to Globalstar. The discussion then expands to talk about Apple getting into the satellite business itself. We conclude with a closer look at the EU narrowing its Apple probe to focus on anti-steering.

Let’s jump right into today’s update.

Apple Lends $250M to Globalstar

Over at SpaceNews, here’s Jason Rainbow:

“Globalstar said Feb. 28 that Apple is lending the company $252 million to help cover upfront costs for replenishing its low Earth orbit (LEO) constellation.

Apple is providing the funds as a prepayment for using the network to upgrade satellite services launched last year for its latest iPhone, which can connect with one of Globalstar’s existing 24 satellites in LEO for emergency services outside cellular coverage.

Globalstar picked MDA and Rocket Lab in February 2022 to supply an initial 17 satellites for launch by the end of 2025 in a contract worth $327 million. The contract includes an option for up to nine additional satellites at $11.4 million each.

The satellite operator intends to fund any upfront costs not covered by Apple’s prepayment with its own cash.

Apple has already agreed to reimburse Globalstar for 95% of the constellation; however, it previously required the satellite operator first to raise third-party financing to fund the manufacturing contract.

Removing the need to raise this financing amid challenging macroeconomic conditions clears a significant degree of uncertainty for Globalstar’s constellation plans.”

With interest rates continuing to rise and prospects of securing third-party financing getting dim, Globalstar was in trouble. Apple decided to jump in and loan Globalstar the required cash to keep moving forward (to construct and deploy satellites for Apple). The use of “decided” may be charitable as Apple probably didn’t have much choice other than to step in and bail Globalstar out. Without the loan, Globalstar may not have been able to launch the satellites that Apple needs.

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