Apple’s services business, which includes the App Store, has grown at a rapid pace and now hovers around $20 billion per quarter, news agency Reuters reported. The developers are seeking $1 billion in damages and the lawsuit is submitted to the Competition Appeal Tribunal.
Apple charges commissions of 15% to 30% from some app makers for use of an in-app payment system. The system has been criticised by apps developers and antitrust regulators in multiple markets and regions.
“Apple’s charges to app developers are excessive, and only possible due to its monopoly on the distribution of apps onto iPhones and iPads,” said Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia who filed the case on behalf of 1,566 app developers.
Apple has argued that 85% of developers on the App Store do not pay any commission. It also said that the charges help developers in the Europe region to access markets and customers in 175 countries around the world through the platform.
“The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers,” Ennis added.
Apple to allow competitors apps iPhones
In March this year, it was reported that Apple is gearing up to let alternative app stores on to its iPhones and iPads in line with the European Union’s new Digital Markets Act (DMA). The Act, which will come into force in 2024, will force OEMs to allow users to install third-party apps on their devices.
This means that Apple won’t be able to charge its up to 30% commission on all payments. The rule also applies to Google which also charges up to 30% commission on using its in-app payment system on Google Play Store.
Fines on Google
Antitrust regulators in multiple markets have also fined Google in similar cases. In India, the Competition Commission of India (CCI) imposed a Rs 936 crore fine on Google in October. The regulator said that the company must allow the use of third-party billing.
Google later introduced the User Choice Billing (UCB) system under which app developers are required to pay 11%-26% commission to the company. However, some startups have moved against the company for alleged non-compliance with an antitrust directive.
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