Apple Hit With New Suit From App Developers
Lawyers at Hagens Berman Sobol Shapiro filed suit in U.S. District Court for the Northern District of California on behalf of developers who claim Apple's app store is "exclusive and anti-competitive by design" in ways that violate the federal antitrust laws.
June 04, 2019 at 02:38 PM
4 minute read
The original version of this story was published on The Recorder
On the heels of an antitrust loss for Apple Inc. at the U.S. Supreme Court, a growing swirl of regulatory scrutiny around the world for big technology companies, and a newly announced Congressional probe looking into big tech's market dominance, Apple was hit again on the antitrust front Tuesday with a private lawsuit.
Lawyers at Hagens Berman Sobol Shapiro filed suit in U.S. District Court for the Northern District of California on behalf of developers who claim Apple's app store is “exclusive and anti-competitive by design” in ways that violate the federal antitrust laws and California's Unfair Competition Act.
“On the thinnest of pretenses—that somehow it is uniquely qualified to ensure the safety and device-compatibility of apps—Apple has never permitted anyone else to distribute apps and related digital products to the many millions of U.S. owners of its mobile devices,” the Hagens Berman lawyers wrote.
The complaint claims that Apple's grip on its app store allows it to charge an anti-competitive 30% commission on all app and in-app purchases. The suit also claims Apple's policy of having all prices end in $.99 limits developers ability to maximize sales and that restrictions forcing owners of iPhones, iPads and iPod Touches to purchase apps strictly through its own sanctioned App Store limit the number of apps that actually surface to consumers.
Plaintiffs also claims that $99 annual fee charged to developers far exceeds Apple's curation, security and payment processing costs. The suit seeks to certify a class of all U.S. developers of any Apple iOS application or in-app product sold via Apple's iOS App Store to seek restitution and an injunction barring the company's allegedly anti-competitive practices.
Apple representatives didn't immediately respond to a message seeking comment.
The company last month lost out on a bid to knock out an antitrust lawsuit filed on behalf of consumers when the U.S. Supreme Court found that plaintiffs who purchase apps via Apple's App Store were direct purchasers under the court's Illinois Brick Co. v. Illinois decision. Plaintiffs in the developer suit filed Tuesday cited Apple's argument in the consumer case—that consumers were indirect purchasers—to bolster their own case that they had been directly damaged by Apple's 30% surcharge.
“There is simply no doubt in Apple's view that developers, as opposed to app and in-app product consumers, are the proper plaintiffs in a suit regarding its iOS distribution-service fees,” the Hagens Berman lawyers wrote. The complaint points out that where the consumer suit seeks damages based on the difference between the price paid for an app and the theoretical competitive price, the app developers are seeking the lost profits they would have earned in a competitive market.
Hagens Berman name partner Steve Berman was in court Tuesday and unavailable for comment according to a firm spokesperson. In a press release announcing the suit's filing, he said “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.” The firm previously represented consumers in a $400 million settlement with Apple over claims the company conspired with publishers to fix the prices of e-books at the beginning of the decade.
Read the complaint:
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Read more:
House Judiciary Committee Launches Antitrust Probe Into Big Tech's Market Dominance
Split Supreme Court Greenlights Antitrust Lawsuit Over Apple's App Store Prices
Google to Appeal $5 Billion Antitrust Fine, Voices Fear for Android Open Source System
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