Morgan Stanley: App Store antitrust lawsuit to impact Apple stock price for years

“The fallout from the U.S. Supreme Court’s decision to allow an antitrust lawsuit against Apple over an alleged monopoly on iOS apps via the App Store won’t immediately affect the company, suggests Morgan Stanley, but the legal threat could affect the stock value for years,” Malcolm Owen reports for AppleInsider. “For the near term, there will be ‘”no fundamental change to how Apple operates the App Store, nor is there any impact to Apple’s profit and loss,’ writes Morgan Stanley in a note to investors seen by AppleInsider.”

“Referencing how Apple management and other storefronts, including Google for the Google Play Store, have ‘vigorously argued that their App Store business model has solid justification,’ the analysts point out the 30% fee Apple applies to most one-time App Store transactions is on a par with traditional retail and commercial IT distribution markets, which operate at a margin of 20% to 30%,” Owen reports.

“Analysts see a ‘range of potential outcomes’ for the situation, but stresses that a final outcome won’t be expected for years. A best-case scenario is for any antitrust lawsuits to be quashed in the court, maintaining the status quo and validating Apple’s arguments. On a ‘bad but not the worst case’ scenario, Apple loses lawsuits and pays monetary damages equivalent to the different between the price paid by consumers and the price determined by the courts to have been payable in a competitive market,” Owen reports. “The last worst-case scenario would ‘entail Apple modifying the App Store business model, either by lowering the 30% take rate they charge or opening up the iOS platform to include other, competing App stores.'”

Read more in the full article here.

MacDailyNews Take: Of course, it will hang over Apple for years while the naysayers and shorts will add it to their arsenals to use at will, but it’s also being overblown. Even in Morgan Stanley’s worst-case scenario, it doesn’t affect Apple’s earning all that much, especially as more and more services come online, lowering the percentage that the App Store contributes to Apple’s overall services revenue. It also doesn’t take into account new products like Apple Glasses, Apple Car, etc.

Apple’s Supreme Court loss could change the way you buy apps – May 14, 2019
U.S. Supreme Court opens door for App Store lawsuit that Apple will likely win – May 14, 2019
Analyst: Apple investors ‘overreacting’ to U.S.-China trade war and Supreme Court App Store ruling – May 14, 2019
U.S. Supreme Court Justice Kavanaugh’s Apple App Store decision has ‘shaken up’ antitrust law – May 13, 2019
U.S. Supreme Court allows antitrust suit against Apple over App Store; AAPL slides 5% – May 13, 2019
Supreme Court rules against Apple in App Store antitrust case – May 13, 2019
Antitrust, the App Store, and Apple – November 27, 2018
Trump administration backs Apple in U.S. Supreme Court over App Store antitrust suit – November 26, 2018
Apple defends App Store fees in U.S. Supreme Court – November 26, 2018
Apple defends App Store fees as U.S. Supreme Court weighs consumer suit – November 23, 2018
Apple wants U.S. Supreme Court to undo previous decision regarding an antitrust suit – October 31, 2018
U.S. Supreme Court will decide if Apple’s App Store is an anti-competitive monopoly – June 19, 2018
U.S. Supreme Court to consider Apple appeal in antitrust suit over App Store prices – June 18, 2018
US DOJ sides with Apple over App Store antitrust allegations in Supreme Court brief – May 10, 2018
9th U.S. Circuit Court of Appeals revives antitrust lawsuit against Apple – January 13, 2017
Apple App Store antitrust complaint dismissed on procedural grounds by U.S. judge – August 16, 2013


  1. The threat of the worst-case isn’t to App Store revenues, but to iOS device sales if Apple loses its privacy and security advantage due to a proliferation of malware that Apple must allow users to sideload.

      1. That’s true, no one would be preventing users from shopping exclusively from Apple.
        Meanwhile… how come we don’t get dysentery by shopping at Walmart instead of Whole Foods. Should our cars fail to take us there?

    1. You might have had a point if Apple didn’t already support user app freedom on the Mac platform. Are you claiming now that the Mac is a haven for malware?

      1. Sean certainly has a point. He’s comparing iOS to Android.

        MacOS is a separate discussion. MacOS is certainly susceptible to malware, particularly as a result of user stupidity and error. Now let’s compare MacOS to other Desktop OS’es….

        1. No no no, the iOS store compared to the Mac store is the real point. Cook has spent over a decade trying to force as many people to ditch the Mac and buy multiple IOS devices because … wait for it … Apple’s “wide moat” advantage makes piles more money on app sales since users cannot get those apps elsewhere. Cook has basically let the Mac rot because Cook thinks it’s not profitable enough. Without being the one and only gateway for apps, Cook cannot score easy skimming of revenue from developers. Worse, he has concluded the Mac isn’t worth putting serious hardware effort with annual releases.

          If iOS was more secure than a Mac then you fanboys might have a point that the increased app cost to iOS users (not to mention in-app pricing tricks and subscriptionware games) would be justified. Unfortunately, that is not the case. Mac users can install apps directly from software developers without destroying the Mac platform’s integrity. The same should be allowed on iOS. If I want Apple’s security guarantees (imagined by the peanut gallery here), then I would happily pay Apple for that service.

          The only reason iOS app distribution is not like the Mac is Apple’s GREED.

  2. It would appear the REAL issue is Apple doesn’t allow Apps to be installed unless they come through the App Store. As on the Mac, Apple may need to open the iOS platform to App installation at the user’s discretion, rather than Apple’s exclusive curation.

    Apple believes in competition. Right now, the only perceived value the iOS App Store offers the end-user is availability. There are too many folks out there who came from Windows and Android — and they don’t value Apple’s curation as do “the Rest of us.” Given the option, these will opt for anything that tickles them without regard to quality, value, security, etc.— because they bought iPhone, not Apple. They aren’t really “the premium customers” Apple targets. As the result, these folks will blindly assume the risks that Apple currently owns. And maybe Apple will be forced to let them. The downside is the loss of a significant traffic and resulting revenue from the App Store — unless Apple can innovate a way to compete; a way to add value to purchases in the App Store, unavailable elsewhere.

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