Apple's App Store Outage Raises Concerns Amidst Legal Battles

Apple investigates App Store and other service outages amid legal challenges and a 12% share decline.

By Jack Wilson

4/3, 19:48 EDT
Apple Inc.

Key Takeaway

  • Apple's App Store and other services experienced an outage, impacting users globally and highlighting the platform's significance to Apple's revenue.
  • The outage occurs as Apple shares decline 12% for the year, amidst a challenging period marked by a DOJ lawsuit over market dominance.
  • The DOJ lawsuit threatens major changes to Apple's business model, with potential trials extending into 2025 and appeals possibly until 2027.

App Store Outage

Apple confirmed on Wednesday that it is investigating an outage affecting its App Store on both iOS and MacOS devices. The issue, which began at 6:31 p.m. ET, prevented users from accessing the App Store, as evidenced by error messages shared on social media. This is not the first instance of downtime for the App Store, with similar issues reported in 2022. Alongside the App Store, other Apple services including Apple TV+, Apple Music, and Apple Podcasts also experienced technical difficulties, according to Apple's system status page.

Financial Impact and Legal Challenges

The App Store is a significant revenue source for Apple, contributing to 19% of its earnings from the Services category. Apple typically retains a commission from app and in-app purchases, while developers keep the remainder of the revenue generated. This outage comes amid a challenging period for Apple, with its shares down 12% for the year, contrasting with a 9% gain in the S&P 500 index. Additionally, Apple faces legal scrutiny from the U.S. Justice Department, which sued the company last month. The lawsuit accuses Apple of leveraging the iPhone's market dominance to suppress competition, potentially threatening its business model and leading to years of legal battles.

DOJ Lawsuit Implications

The Department of Justice's lawsuit against Apple could have far-reaching implications for the company's operations and its "walled garden" approach to its ecosystem. If the DOJ prevails, it may seek significant changes to Apple's business practices, including "structural remedies" or a potential breakup. Conversely, a victory for Apple could reinforce its market position and fend off future regulatory challenges. However, the legal process is expected to be lengthy, with trials possibly scheduled for 2025 and appeals extending into 2027. This legal battle may distract Apple's executives, require extensive document production, and lead to unfavorable public exposure.