Apple, Inc.’s iPhones, iPod Touches, and iPads have a limitation that its computers don’t: They cannot obtain aftermarket apps from any source except Apple. Apple’s monopoly of this market affects consumers, says the complaint for this antitrust class action, because Apple charges a high 30% fee for apps (including in-app purchases). “Consequently,” the complaint alleges, “iOS Device consumers nationwide have paid hundreds of millions of dollars more for iOS apps than they would have paid in a competitive market.”
The class for this action is all persons in the US who bought an iOS application or application license from Apple, or who made an in-app purchase, including a subscription purchase, through an app, for use on an iOS device, between December 29, 2007 and the present.
The original iPhone came out in June 2007; the iPod Touch came out that same year. In April 2010, it brought out the iPad. Consumers who bought these devices were able to do a lot with them, through the aftermarket for iOS applications.
But Apple, it claims, has had an anticompetitive scheme to monopolize this market. The applications, the complaint says, includes “purchases made within applications, such as payment for additional application features, full versions of games, and subscriptions for renewable access to content and memberships (e.g., Hulu and Spotify)…”
The complaint alleges that Apple has now “cornered 100% of the worldwide distribution market for iOS applications.” The monopoly allows Apple to charge what the complaint calls “a supracompetitive 30% fee” for every app or in-app purchase they have bought.
Apple computers do not have this same restriction. The complaint alleges that their operating systems “allow consumers to buy software from whatever source they like and to pay the software manufacturer or distributor directly without having to pay an additional fee to Apple.” The complaint thus claims that Apple has no legitimate reason to treat its iPhone, iPod, or iPad customers any differently or to demand a 30% mark-up on the software that they use.
Although in some instances Apple has reduced its commission to 15%, it still exercises extensive control. For example, the complaint alleges, it also controls the prices app developers can charge.
At the moment, the complaint alleges, Apple offers more than 2.22 million apps in the App Store and the average annual in-app spending per active iPhone in the US is now $100.
A 2013 antitrust case against Apple found that the company had engaged in fixing prices for e-books. The complaint quotes the court as saying, “The record at trial demonstrated a blatant and aggressive disregard at Apple for the requirements of the law…”
The complaint alleges that “Apple’s illegal iOS apps monopoly should be enjoined and dismantled” and customers reimbursed for the overcharges they have paid due to the monopoly.
Article Type: LawsuitTopic: Antitrust
Most Recent Case Event
Apple Monopoly of App Market for iPhones, iPods, and iPads Complaint
November 12, 2021
Apple, Inc.’s iPhones, iPod Touches, and iPads have a limitation that its computers don’t: They cannot obtain aftermarket apps from any source except Apple. Apple’s monopoly of this market affects consumers, says the complaint for this antitrust class action, because Apple charges a high 30% fee for apps (including in-app purchases). “Consequently,” the complaint alleges, “iOS Device consumers nationwide have paid hundreds of millions of dollars more for iOS apps than they would have paid in a competitive market.”
Apple Monopoly of App Market for iPhones, iPods, and iPads ComplaintCase Event History
Apple Monopoly of App Market for iPhones, iPods, and iPads Complaint
November 12, 2021
Apple, Inc.’s iPhones, iPod Touches, and iPads have a limitation that its computers don’t: They cannot obtain aftermarket apps from any source except Apple. Apple’s monopoly of this market affects consumers, says the complaint for this antitrust class action, because Apple charges a high 30% fee for apps (including in-app purchases). “Consequently,” the complaint alleges, “iOS Device consumers nationwide have paid hundreds of millions of dollars more for iOS apps than they would have paid in a competitive market.”
Apple Monopoly of App Market for iPhones, iPods, and iPads Complaint