Apple in hot water for ‘stifling competition’

Dozens of US states slam iPhone maker’s restrictive practices

Over 30 US states on Thursday stood by Fortnite video game producer Epic Games as they appealed a ruling in its lawsuit against Apple over restrictive policies on the iPhone maker’s in-app payment system.

Apple’s conduct has harmed and is harming mobile app-developers and millions of citizens,” the plaintiffs said, according to court papers seen by Reuters.

Meanwhile, Apple continues to monopolize app distribution and in-app payment solutions for iPhones, stifle competition, and amass supracompetitive profits within the almost trillion-dollar-a-year smartphone industry,” they claimed.

The appeal, filed by the attorneys general for 34 US states and the District of Columbia, follows a 2020 lawsuit accusing Apple of violating antitrust laws by charging Epic Games (and other developers) commissions of 15% to 30% to use its in-app payment system and restricting external payment methods.

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Apple ordered to let customers pay OUTSIDE App Store in big win for Epic Games, but Fortnite maker may have to cough up huge sum

A US district judge in Oakland, California ruled in favor of Epic Games in September 2021. Apple was ordered to open up the payment system in its App Store app so developers could offer other payment methods and not have to pay Apple extra fees. However, the judge also ruled that Apple is not an antitrust monopolist in mobile gaming transactions, largely leaving the company to do what it pleases with its developers. Epic Games challenged the ruling in the Ninth US Circuit Court of Appeals last week.

In their appeal in support of Epic Games, the attorneys general said the Oakland court failed to adequately assess the case, noting how it appeared to overlook the non-negotiable contracts that Apple requires game developers to sign, which they see as a clear sign of monopolistic policy.

Paradoxically, firms with enough market power to unilaterally impose contracts would be protected from antitrust scrutiny – precisely the firms whose activities give the most cause for antitrust concern,” they said.

This is the first time that US state attorneys general have filed an antitrust lawsuit against Apple. Several similar cases have been filed against other tech giants, including Meta Platforms and Google.

Apple’s reply to the appeals is expected in March, and the company said on Thursday it was optimistic that it would be able to overturn them.

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