A handful of developers in Australia have joined a class action alleging abuse of app store power from tech heavyweights Google and Apple.
The class action is being brought by Maurice Blackburn Lawyers and Phi Finney McDonald. Described as an “abuse-of-power class action”, the law firms say Australian app designers and founders are taking on Apple and Google alleging the companies abused their market power to charge 30 per cent commissions on in-app spending while blocking competitors from offering better value payment systems.
Apple takes a 30 per cent cut (15 per cent if you qualify for its small business program) of in-app spending – Google recently dropped its cut from 30 per cent to 15 per cent, too, providing the developer’s earnings don’t push $1 million.
The respective Apple App Store and Google Play Store practices have caught the attention of regulators and policymakers globally, with Australia a little bit concerned, too.
Apple and Google have long been accused of having a stranglehold on in-app purchases, which was really brought to light when the pair in 2020 removed Fortnite from their respective app stores after Epic Games allowed players to purchase in-game currency directly from the mobile apps on iOS and Android.
Apple and Google are already facing a consumer class action alleging the companies abused their market dominance to inflate prices by forcing developers to use their platforms, inflating the cost of in-app purchases. Per a statement from Maurice Blackburn Lawyers, it’s now open to app developers to join.
The class action alleges that Google and Apple breached Australian Consumer Law and forced up prices by not allowing competitors to offer alternate, better value payment systems.
It also alleges that Apple makes 55 per cent of smart phones sold in Australia, with the rest running on Google’s Android system. Last month, the Federal Court of Australia allowed the class action to be expanded to include local app designers/founders who may have suffered loss or damage due the conduct of Apple and Google.
“This case is about an egregious misuse of market power by each of Apple and Google which should result in significant compensation being paid to App Developers and Consumers” said Maurice Blackburn class action principal Kimi Nishimura.
“Google and Apple are quite rightly facing increased scrutiny from regulators. And now this landmark case gives consumers and app developers the opportunity to stand up to these global tech giants and seek compensation,” added Phi Finney McDonald principal Joel Phibbs.
In August 2021, Apple settled a class action in the United States and allowed app developers to use alternative payment systems.
App Developers who are interested in receiving further information about the class action are encouraged to contact Phi Finney McDonald on 03 9134 7100 or email enquiries@phifinneymcdonald.com. You can read more about the claim against Apple here and Google here.