Apple gets another App Store antitrust win, this time in China
Apple has won a lawsuit accusing it of abusing its dominant power in the app marketplace, with a Chinese court rejecting claims Apple's App Store fees were too high.
iOS App Store
In 2021, Jin Xin sued Apple China, insisting Apple stopped charging its 30% App Store commission. Xin also demanded that Chinese consumers should be allowed to use other payment systems than Apple's own, as well as an apology and approximately $15,500 in compensation.
Three years later, the Shanghai Intellectual Property Court sided with Apple, according to a yet-to-be-published judgment received by the South China Morning Post.
Wednesday's decision by the court said that it had compared Apple's commission fees with other app marketplaces. It didn't find Apple's fees to be "significantly higher" than those operating on Android.
It also determined there was no evidence to suggest that fees led to higher prices for consumers.
In response via WeChat, a legal representative for Xin wrote of intentions to appeal to the China Supreme People's Court. Xin and the lawyers "firmly believe" Apple's fees are an abuse of market dominance, infringing on Chinese consumers' rights to a fair transaction.
Apple's fees increased the operating costs for Chinese firms, said Kinding Law Firm founding partner Wang Qiongfei. It had "damaged the competitiveness of Chia's internet industry."
The war on fees
While the win in China is helpful to Apple, it's not the only App Store lawsuit it's dealing with.
In the UK, a July 2023 lawsuit from over 1,500 developers accused Apple's 30% fee of being too excessive and an abuse of its monopoly position. However, in April, the UK's Competition Appeal Tribunal denied a motion by Apple to dismiss the case.
It is unknown when the case will be heard in court.
Apple has also previously wrangled over the matter with Epic Games in its major trial, with Apple coming out of it mostly on top. However, while the Supreme Court has effectively ended further appeals, the two are still in court battling over anti-steering rule compliance.
Meanwhile in Europe, Apple has had to deal with changes in law, with the Digital Markets Act enabling alternative payment methods and alternative app storefronts. While Apple stands to see fewer App Store transactions, it still intends to earn from iOS app developers through a Core Technology Fee.
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Comments
• Digital stores on consoles and the Steam digital store on Windows charged 30% commission at the time the App Store launched in 2008.
• Brick/mortar stores charged commissions significantly higher than 30%.
• The iPhone had launched a year earlier than the App Store. Apple's market power was very limited when it set the 30% commission.
• Apple never raised the commission when they achieved greater market power.
• Since the App Store only operates on Apple's 1st party operating systems and hardware, Apple cannot be considered a middleman.
Everything we buy has a markup in whole or part, whether that cost is apparent or not — usually the consumer end user isn’t aware of most of it.
Fifteen percent (for commissions or markups) are incredibly common. Items in your average big box store can be marked up by hundreds or thousands of percentage points, and that’s just one vendor.
Developers have nowhere near the overhead that a manufacturer or a seller of physical wares has and so have been able to take that savings and lavish it on employees and shareholders. We all know that particular gravy train is under pressure, and many groups that have had it good are fighting to retain their piece of the pie at the expense of others. It’s lazy, entitled greed. Time to come down to earth.
It's funny how so many in the news media in the USA express concern about the general public losing faith in the court system, when I think a lot of people really don't have that strong a faith in the courts to begin with. And now with politically-charged cases going on in the USA and convictions being handed out, and even larger segment of the population may lose what little faith they originally had.
I don't think we need to have faith in our government to lead a happy and productive life, be that in the USA, Japan, China or anywhere else. China says it is "the people's republic" which of course is a lie, but in the USA says something similar with "we the people." These are nice phrases that really don't help you out much when powerful people embedded in the system come after you.
What we must do is celebrate the good decisions (China's recent decision being one) while at the same time give a huge thumbs-down to the bad decisions (I won't cite examples to avoid controversy). There's no harm in praising a good outcome even when it happens in a communist nation. A victory for good is something worthy of praise. With all the bad in the world today, we need to try to celebrate the good more often.