Apple Hit with Developers’ Class Action Over Alleged App Store Monopoly [UPDATE]
by Erin Shaak
Last Updated on January 18, 2022
Cameron et al v. Apple Inc.
Filed: June 4, 2019 ◆§ 5:19-cv-03074
Two iOS app developers have hit Apple with a proposed class action alleging the tech giant violated federal antitrust law by squelching any competition for its App Store.
Case Updates
January 18, 2022 – Apple iOS App Developer Class Action Settlement Website Is Live
The official settlement website for the proposed class action detailed on this page is live and can be found here:
https://smallappdeveloperassistance.com/
To submit a claim, head to this page and either enter your unique claim ID and confirmation code, or select the option on the right and enter your information as instructed.
The deadline to submit a valid claim is May 20, 2022. If you take no action, you will receive no payment through the settlement and give up your right to sue Apple over claims related to the case. Payments to eligible claimants range from $250 to $30,000.
The deal covers U.S. Apple iOS app developers whose product, including subscriptions, was sold for a non-zero price in the App Store between 2015 and 2021 and earned proceeds equal to or less than $1,000,000 in every calendar year from 2015 to 2021 in which the claimant held a developer account. To estimate the payment you might receive from the settlement, head to this page and enter your application developer account team ID.
The answers to frequently asked questions about the case and settlement can be found here. Apple denies all wrongdoing and the settlement does not amount to an admission of any wrongdoing by Apple, the settlement site states.
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November 19, 2021 – Settlement Receives Preliminary Approval
The judge overseeing the case detailed on this page has preliminarily approved the settlement detailed below.
According to a November 16 order, the deal will cover U.S. developers of any Apple iOS app or in-app product sold for a “non-zero” price on the Apple App Store between June 4, 2015 and August 24, 2021 that earned proceeds of $1 million or less each year.
Developers who fit these criteria, i.e., class members, will be eligible to submit a claim for a share of the settlement fund either by mail or online at www.smallappdeveloperassistance.com. At the time this update was published, the site was not yet live; however, it is still accessible and visitors can sign up to be notified via email when the site officially launches.
The deadline to submit a claim for payment is May 20, 2022. The amount of each payment will be calculated based on how much the claimant earned through the App Store during the relevant time frame, with the lowest tier yielding a minimum payment of $250 and the highest a payment of $30,000.
Notices of the settlement will begin to be sent to class members via mail and email in mid-January 2022.
A final approval hearing has been scheduled for June 7, 2022, and payments will not be made until the settlement receives final approval and any objections are resolved.
August 30, 2021 – Apple Settles Devs’ Antitrust Class Action for $100 Million, App Store Policy Changes
After more than two years of litigation, Apple has said it will pay $100 million and implement several significant App Store policy changes in favor of developers to end the proposed antitrust class action detailed on this page.
According to a 37-page motion for preliminary settlement approval submitted by the plaintiffs on August 26, the proposed settlement, which requires a judge’s approval before proceeding, would cover roughly 67,000 iOS developers earning more than $0 but less than $1 million annually from transactions in the App Store, a group the filing says comprises more than 99 percent of all domestic developers.
“These small developers are the backbone of the iOS app economy, developing apps of all types that improve the functionality and performance of iOS devices,” settlement documents state. “And they all stand to recover substantial benefits under the Settlement, both from direct monetary payments and structural relief that, going forward, will make iOS app development a more productive enterprise.”
The motion says that the proposed deal will provide minimum payments of $250 to individuals covered by the settlement. Higher payments from the $100 million settlement fund, court documents state, will be based on “historic proceeds,” with the highest minimum payment tier providing $30,000.
In addition to monetary compensation, the proposed settlement includes a “proper” acknowledgement that the case detailed on this page was a driving force behind Apple’s 2021 launch of its Small Business Program, through which small developers qualify for a lower 15-percent commission rate. The proposed deal stipulates that Apple will maintain the Small Business Program’s 15-percent commission rate for at least another three years.
Moreover, Apple has agreed to commit to revising its “anti-steering” guidelines so as to permit app developers to communicate directly with customers concerning payment options that do not involve paying Apple directly. In addition, Apple will also institute and maintain a range of “structural reforms” that will enable developers to better create, distribute and monetize their apps.
“These structural reforms are valuable,” the settlement motion states. “Developer Plaintiffs conservatively estimate that the Small Business Program element of the Settlement alone adds at least $35.44 million in value.”
In a press release, Apple said the deal was reached after “productive dialogue” with developers. The terms of the proposed settlement, Apple said, stand to “help make the App Store an even better business opportunity to developers, while maintaining the safe and trusted marketplace users love.”
The proposed deal is slated to be considered for preliminary approval, a crucial step in the class action settlement process, on October 12, 2021. Notices informing affected individuals of the settlement are expected to be sent via e-mail and mail within 45 days of preliminary approval.
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Not long after the Supreme Court greenlit a lawsuit against Apple over its allegedly monopolistic App Store, two iOS app developers have hit the tech giant with a similar suit in which they allege the tech heavyweight has violated federal antitrust law by squelching any competition for a platform on which developers may sell their apps.
According to the case, the only way developers can make their apps available to iPhone users is through the App Store. “They have no choice in the matter,” the complaint reads, “but not because Apple built an app store that beat all comers fair and square.” Instead, the case attests, Apple has unlawfully maintained a monopoly over the market for iOS apps and in-app product purchases, thinly justifying its position by purporting to be “uniquely qualified to ensure the safety and device-compatibility of apps.”
Apple’s market power, the lawsuit continues, allows it to charge developers a supra-competitive 30 percent commission on the sale of their apps and in-app products, as well as a $99 annual fee to list their products in the App Store—which the suit points out is the only place iPhone users are able to buy them.
To further bolster its profits, Apple, the case goes on, dictates the price points at which developers may sell their apps, allowing nothing less than $.99 and only price points ending with $.99, the suit says. “This maximizes Apple’s profit by ensuring that it collects roughly $.30 on every paid sale,” the complaint states, adding that Apple’s ruling out of prices ending in $.49, for example, generally forces developers to up their prices and generate more profits for the tech company.
The lawsuit goes on to argue that the sheer size of the App Store, with more than two million available apps, inevitably causes “huge numbers” of apps to never be seen by iPhone users. One of the plaintiffs, for example, claims his baby naming app can only be found after scrolling through “pages and pages” of search results for “baby naming,” well after the point a “typical, reasonable consumer” would have stopped scrolling.
Citing statements made in the recent Supreme Court case, the lawsuit notes that Apple itself has admitted that app developers have standing to sue over antitrust claims. Apple reportedly argued before the high court that the software developers, and not the consumers on whose behalf the case had been filed, “are the ones who have antitrust standing” because they were the “direct purchasers and ‘consumers’ of the allegedly monopolized distribution services.”
The lawsuit looks to cover a proposed class of all developers of any iOS app or in-app product that was sold for a non-zero price in the App Store.
The full complaint can be read below.
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