Apple is facing a new class-action lawsuit from iOS developers who claim that the company uses its monopoly in the App Store to impose "profit-killing" commissions.
Filed on Tuesday in the U.S. District Court for the Northern District of California in San Jose, the lawsuit argues that the tech giant's practice of instating a 30 percent commission rate on all app sales is anticompetitive and "sets the stage for Apple to abuse its market power."
The suit also takes aim at Apple's minimum $0.99 price requirement for paid apps in the App Store and in-app purchases, as well as the annual $99 Apple Developer fee, calling these policies "especially damaging to smaller and new developers."
"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."
"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."
"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."
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, who said they were 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.
The latest class action accuses Apple of violating federal antitrust law and California's unfair competition law.