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Developers Suing Apple Over ‘Profit-Killing’ App Store Commissions

Developers Suing Apple Over ‘Profit-Killing’ App Store Commissions

Another day, another new Apple-related lawsuit. The Cupertino firm is facing a class-action lawsuit by iOS developers that claim Apple uses its “monopoly” in the App Store to impose anti-competitive and “profit-killing” commissions.

The lawsuit was filed on Tuesday in the U.S. District Court for the Northern District of California in San Jose. The lawsuit argues That Apple’s 30% commission rate on all app sales is anticompetitive and “sets the stage for Apple to abuse its market power.”

The suit says Apple’s minimum $0.99 paid app and in-app purchases requirement, as well as its annual $99 Developer fee are “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.”

The suit accuses Apple of violating both California’s unfair competition law and of violating federal antitrust law.

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