Apple Inc. is under fire from the developers of basketball-workout and baby-naming apps as antitrust fever sweeps Silicon Valley.
Amid the revelation this week that Apple is among four titans of the Valley facing possible U.S. antitrust probes, the developers sued the company on Tuesday claiming its App Store suppresses competition.
They allege that Apple improperly forces them to sell through the App Store, takes a 30% cut of sales and “dictates minimum and greater price points, which prevent developers from offering paid products at less than $.99 or at price points ending in anything other than $.99.” They say it’s hard to make decent money under these constraints and in a store crowded with so many offerings — more than 2 million apps — that “no one sees them.”
“From the outset, Apple attained monopoly power in the U.S. market for iOS app and in-app product distribution services by slamming the door shut on any and all potential competitors,” according to the complaint, filed in federal court in San Jose, California.
Apple didn’t immediately respond to emails seeking comment on the suit.
The U.S. Supreme Court ruled last month that consumers can sue Apple over claims that it uses its market dominance to artificially inflate prices in the store, opening the door for lawyers pressing the case to seek hundreds of millions of dollars on behalf of consumers. The high court’s 5-4 ruling also foreshadowed the prospect of developers suing Apple over alleged monopolistic practices.
The two plaintiffs in Tuesday’s case are seeking to represent a nationwide class of developers whose products are sold through the App Store. They’re seeking an order barring Apple from anticompetitive practices and violations of California’s Unfair Competition Law, plus unspecified damages, which may be tripled under antitrust law.
Their complaint comes on the heels of Apple’s annual bash to celebrate its wares, where the company presented several new tools to help developers build software more easily, customize their mobile apps to run on the Mac and make better augmented-reality software.
Elizabeth Warren, the Democratic senator from Massachusetts and presidential candidate who has become a leading voice for Silicon Valley trust-busting, said in March that Apple shouldn’t be allowed to run an app store while also controlling the platform. At Monday’s conference, the company said it would open a new App Store for the Apple Watch.
The plaintiffs are represented by Seattle-based law firm Hagens Berman, which won a suit against Apple and various publishing companies in 2016 that was settled for a total of $560 million on behalf of e-book purchasers allegedly forced to pay artificially high prices.