Apple is getting sued by developers who say the App Store is a monopoly
A pair of developers say that Apple has for years maintained a monopoly over the sale and distribution of iOS apps, and they’re suing the tech giant in a US federal court in an attempt to break its “improper monopolization of this market.” The lawsuit seeks class action status, so it could potentially represent anyone who’s ever sold an iOS app in the US.
There’s no question that Apple has almost complete and total control over the distribution of iOS apps. With few exceptions, all apps have to go through the App Store, and they all have to comply with Apple’s rules in order to get onto Apple’s hardware platforms. The question is whether Apple maintaining this control constitutes an illegal monopoly.
The plaintiffs — the developers of a baby naming app and a basketball workout app — say that Apple “stifles innovation,” depresses purchases of and within iOS apps, and limits overall development by enforcing such strict rules. They take issue with Apple’s requirement that developers pay a $99 annual fee, give Apple a “profit-killing” 30 percent cut of most transactions, and mandate that prices end in .99.
But mostly, they take issue with the fact that the one and only place to distribute iOS apps is through Apple’s App Store. If Apple rejects an app, they have nowhere else to go. If their app isn’t being discovered in the App Store, there’s no other store they can hope to get promotion in. If Apple didn’t enforce this limitation, the lawsuit says, “this would boost output in and sale distribution transactions” because more buyers would find and buy apps.
The only way to remedy this, the lawsuit says, is to allow other app stores. Doing so would improve the market for developers, and it would push Apple to innovate on its own store in order to stay ahead.
Apple, along with other tech giants, have increasingly faced complaints about the amount of power they now wield. Apple has stayed out of the discussion somewhat more than others, but Senator Elizabeth Warren (D-MA) has called for the company’s break up, and a Supreme Court ruling from just last month allowed individual consumers to sue Apple over similar App Store monopoly complaints.
One way or another, Apple is going to have to deal with these concerns in the near future, and that may well be through a protracted court battle. Already, Apple put out a website trying to push the message that it’s pro-competition by simply allowing third-party apps in the store that compete with its own. We’ve reached out to Apple for comment.