Hagens Berman: iOS Developers Sue Apple over App Store Fees in New Class-Action Lawsuit

Attorneys say Apple’s anticompetitive behavior is “profit-killing”
for iOS developers, by design

SAN JOSE, Calif.–(BUSINESS WIRE)–$AAPL #app–iOS developers today hit
Apple with a class-action lawsuit claiming the tech giant 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, according to attorneys at
Hagens Berman.

The lawsuit filed in the U.S. District Court for the Northern District
of California in San Jose regards Apple’s allegedly anticompetitive
practices in mandating only one app store for iOS devices, which sets
the stage for Apple to abuse its market power. For 11 years, Apple has
instated a 30 percent commission rate on all app paid sales conducted
through the App Store and on any in-app purchases made in iOS apps.
Apple also charges high commissions on subscriptions purchased in-app.

If you are an iOS app developer who sold an app or in-app digital
product through Apple’s App Store, you may have rights to reimbursement
for the charges and fees imposed by Apple. Find
out more.

In addition to the 30 percent cut taken from all app sales and in-app
purchases, Apple also 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.

Apple also forces developers selling products through the App Store to
pay an annual Apple Developer fee of $99 to distribute their apps, which
is especially damaging to smaller and new developers. Putting all iOS
apps into one marketplace also means consumers never see most apps,
attorneys say, stifling competition and innovation. According to a legal
filing made by Apple last year, there were at that time more than 2
million apps available on the App Store.

“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.”

“This isn’t the first time we’ve taken Apple to task over
anticompetitive behavior,” 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 won a suit against Apple and various publishing companies
in 2016 that settled for a total of $560 million on behalf of e-book
purchasers forced to pay artificially high prices due to Apple and the
publishing companies’ colluded price-fixing. That suit went to the
Supreme Court, where the Court ruled against Apple.

Today’s lawsuit seeks to force Apple to end its abusive monopoly and
allow competition in the distribution of iOS apps and related products,
to get rid of its pricing mandates, and to reimburse developers for
overcharges made through abuse of its monopoly power.

The class action accuses Apple of violations of federal antitrust law
violations of and California unfair competition law.

“Apple admits that it shuts out all competition from app-distribution to
iOS device consumers, ostensibly to protect its device customers from
bad apps and malware,” the suit says. “But this is overblown pretense.
There is no reason to believe that other reputable vendors, including
Amazon, for example, could not host an app store and provide a
trustworthy app-distribution system if Apple were to open up its system
to other providers.”

“We think app developers should be rewarded fairly for their creations,
not over-taxed by a corporate giant,” Berman said. ”After 11 years of
monopoly conduct and profits, we think it’s high time that a court
examine Apple’s practices on behalf of iOS app developers and take
action as warranted by the law and facts.”

Read
more about the class-action lawsuit against Apple on behalf of iOS
developers.

About
Hagens Berman

Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law
firm with nine offices across the country. The firm’s tenacious drive
for plaintiffs’ rights has earned it numerous national accolades, awards
and titles of “Most Feared Plaintiff’s Firm,” and MVPs and Trailblazers
of class-action law. More about the law firm and its successes can be
found at www.hbsslaw.com.
Follow the firm for updates and news at @ClassActionLaw.

Contacts

Ashley Klann
ashleyk@hbsslaw.com
206-268-9363