Apple Sued By Developers Over App Store ‘Monopoly’

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Two developers sue Apple, alleging its App store is an illegal monopoly and levies “profit killing” charges

Apple has been hit with a lawsuit from two app developers, who allege that the App store gives the iPad maker a monopoly on the sale and distribution of iOS apps.

The lawsuit filed in the US District Court for the Northern District of California in San Jose, also alleges that Apple places unfair “profit-killing” charges on developers. Developers have to pay a $99 annual fee, plus give Apple 30 percent of most transactions.

This last point is a sensitive subject for Apple, with EU regulators reportedly set to launch a formal antitrust probe against Apple, following a complaint by Spotify earlier this year.

Apple apps

App lawsuit

In March the Swedish company filed a complaint in which it accused Apple of unfairly using the dominance of its mobile App Store to give the Apple Music service a competitive advantage.

The complaint centres on Apple’s policy of charging digital content providers a 30 percent fee for using its payment system for subscriptions sold in the App Store.

Apple has strongly defended itself against Spotify’s complaints.

But now two app developers (a developer of a baby naming app and a basketball workout app) are also jumping onboard.

Their attorneys at Hagens Berman allege that Apple’s anticompetitive behaviour is “profit-killing” for iOS developers, by design.

They claim Apple has “cornered the iOS app market with its App Store and knowingly used its monopoly to implement ‘profit-killing’ commissions and fees on the very developers who bring Apple’s products to life.”

The lawsuit is seeking class action status so that other US developers who have sold an iOS app via the App store can join it.

The lawsuit also objects to Apple’s rules that sets “an artificial minimum pricing mandate of $.99 for paid apps or in-app products. It also dictates that all App Store paid purchases end in $.99.”

“Between Apple’s 30 percent cut of all App Store sales, the annual fee of $99 and pricing mandates, Apple blatantly abuses its market power to the detriment of developers, who are forced to use the only platform available to them to sell their iOS app,” said Steve Berman, managing partner of Hagens Berman and attorney representing the proposed class of developers. “In a competitive landscape, this simply would not happen.”

Other lawsuits

“This isn’t the first time we’ve taken Apple to task over anticompetitive behaviour,” Berman added. “We have successfully held Apple to the law in the past, and we intend to fight hard for the rights of iOS developers who bring their hard work and creativity to the iOS App Store with the hope of fairly monetizing their creations.”

Hagens Berman reportedly won a lawsuit against Apple and various publishing companies in 2016 that settled for a total of $560m on behalf of e-book purchasers forced to pay artificially high prices due to Apple and the publishing companies’ colluded price-fixing.

That suit apparently went to the Supreme Court, where the Court ruled against Apple.

And that is not the only legal trouble facing Apple.

Last month the US Supreme Court paved the way for a class-action lawsuit by consumers against Apple alleging its App Store violates federal antitrust laws.

The suit, originally filed in 2011, alleges that Apple’s practice of requiring users to buy apps from its own online shop leads to artificially inflated prices, in part due to the 30 percent levy Apple imposes upon developers.

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Author: Tom Jowitt
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