Australian users of the Apple App Store and Google Play Store have instituted simultaneous legal proceedings against the tech companies over an alleged breach of the Australian Consumer Law.
The lawsuits allege that Apple and Google’s substantial degree of market power in Australia has enabled the companies to force developers to use Apple and Google payment systems for apps and in-app purchases. By doing so, Apple and Google have been able to charge as high as 30 per cent commission on downloads, in turn resulting in higher prices for users than if competition was allowed for other payment methods.
Google commented on the lawsuit saying that “Android gives people more choice than any other mobile platform in deciding which apps and app stores they use”. Moreover, “Google Play is the first major platform to move away from one-size-fits-all pricing to meet developers’ different needs and our fees are the lowest among major app stores. Today, just around 3 per cent of developers are subject to a service fee and 99 per cent of those developers qualify for a service fee of 15 per cent or less.” However, the accuracy of this statement is unclear as Epic Games has been in a long battle with both companies over similar breaches of Australian Consumer Law and its video game Fortnite. Apple provided no comment.
The Australian Competition and Consumer Commission (ACCC) has noted similar issues in the App Store and Play Store, particularly in terms of the companies’ market power, unfair contract terms for developers, and payment arrangements concerning self-preferencing. These two new lawsuits may pave the way for just prices and terms for users and developers and further scrutiny is likely to come from the ACCC with the release of its Digital Platforms Inquiry.