About the case:
Authorities in Europe and the US have recently examined various antitrust lawsuits involving Apple and Google and fined them billions of dollars. Furthermore, both companies have made use of their dominant positions to maintain a monopoly in the app stores available for iOS and Android devices.
According to the allegation, the App Store and Play Store’s 30% cut of in-app and app store purchases are anti-competitive and inflates prices for consumers. Additionally, it alleges that if the two tech giants didn’t place technical and contractual limitations on other app stores, they wouldn’t be able to charge the fees.
The action was filed in the midst of increasing federal pressure on Google, which is already facing three federal antitrust lawsuits, one of which is still pending and accuses the company of indulging in monopolistic activities in the online advertising business.
Recent court decisions:
September 2021
Epic Games filed a lawsuit against Apple for preventing it from using its own payment system instead of in-app payments made through the App Store, where Apple receives a 30% cut.
The American Jurisdiction determined that Apple must allow app developers to direct app users to third-party payment platforms. Nevertheless, it came to the conclusion that the company did not meet the legal requirements to be considered a monopoly and, as a result, did not have to permit competition for app stores for iOS apps. Apple and Epic Games filed appeals on various facets of the decision.
Recent update: The original decision in the Epic Games vs Apple case was recently appealed by both Apple and Epic Games since neither company was satisfied with the outcome. Apple underwent App Store adjustments that are currently on pause while Epic continues to file its appeal.
In January ’22, Apple sent the appeals court its most recent submission. In the brief, Apple claims that Epic Games lost the case not because of legal error but because of its “unprecedented” and “unfounded” accusations of anticompetitive conduct. However, many are not in support of this argument, especially after the 2022 court Decision where Apple settled with App developers due to its anticompetitive practices.
December 2021
On 24 August 2021, Apple Inc. was given an order subject to a penalty by the Dutch Authority (ACM) for abusing its dominating position. Apple allegedly imposes unfair App Store conditions on dating app providers, claims the ACM.
The Rotterdam District Court ruled that Apple must comply with the Dutch Authority for the Consumers and Markets (ACM) decision, according to which Apple must adjust its unreasonable conditions, such as its 30% commission.
Point to be noted, The ACM’s decision to choose an order subject to a penalty over a fine is extraordinary. Presumably, the ACM thinks that a penalty-based order would provide a quicker and more permanent solution to this market issue. The main goal of an order is to stop Apple’s violations. However, it may be claimed that Apple is avoiding punishment for this infringement of the competition laws quite “easily”.
In its battle with Apple, the ACM has won (for the time being). However, many things are still uncertain based on the currently available information. The final verdict will provide more insights, although it won’t be released for a while due to the ongoing legal actions. In the meantime, the ACM will feel vindicated in its first decision against a major tech company, and it may mark a turning point in its rather lousy track record in abuse of dominance cases.
June 2022
Apple has started paying out a $100 million cash reserve created as part of a class-action settlement to its App Store developers.
According to the terms of the agreement, Apple will create a $100 million “fund” that developers can use based on their historical App Store earnings. Between 4 June 2015 and 26 April 2021, developers that made $1 million or less using the U.S. storefront for their apps can claim between $250 and $30,000. Those engaged in more of the App Store ecosystem will receive higher payments.
Along with the fund, the settlement brought about several improvements to the App Store’s policies, including new pricing tiers, developer and customer communication modifications, and a commitment from the tech giant to uphold its 15% reduced App Store commission for at least three years.
June 2022
U.S. Android app creators will be eligible to claim money from a new $90 million fund Google will establish as part of a larger settlement with app makers over the tech giant’s app store policies.
The proposed settlement addresses long-standing claims made by the app developers that Google (GOOGL) forces them to comply with onerous and anticompetitive restrictions in order to put their apps on the Google play store.
“A vast majority of U.S. developers who earned revenue through Google Play will be eligible to receive money from this fund if they choose,” The agreement, which is available to app developers who made $2 million or less annually from the Google Play Store between 2016 and 2021, was announced by Google in a blog post.
November 2022
The Digital Markets Act (the “DMA”) came into effect on November 1, 2022. The DMA has introduced new rules for certain platform services that act as “gatekeepers” in the digital industry. Additionally, the DMA seeks to guarantee the openness of important digital services and prevent such platforms from imposing unfair conditions on consumers and businesses.
It was proposed by the Commission in December 2020 and agreed by the European Parliament and the Council in record time in March 2022.
The most recent EU regulation is excellent news to LitFin – Litigation Financiers‘ bundled action against Apple and Google, who for years have obtained a brutal 30% cut out of app developers.
To get more information related to the case, send us an email at Merino@litfin.cz