If you own an iPhone and are wondering whether you can file a class action lawsuit against Apple, there are many factors to consider. The company has been known for throttling older iPhones and charging developers a $99 annual fee for using its App Store. These and many other factors have led some to file a lawsuit against Apple. The proposed settlement seems fair. Jonathan Selbin, an attorney with the firm Kelley Drye LLP, believes the proposed settlement is fair and the company has not shared information about how to file a claim.
Apple’s fees for the App Store are “the behavior of a monopolist”
A legal case against Apple is being filed by Epic Games Inc., which alleges that Apple’s fees for the App Store are “anti-competitive.” The lawsuit was filed last year, after Apple changed the commission rate for developers from 30 percent to 15 percent for those who make over $1 million in revenue. The suit does not specifically mention this change, but it is worth noting because it is not entirely clear whether this is the case.
The fees for the App Store are the subject of a class-action lawsuit in the UK, where a group led by King’s College London digital-economy lecturer Dr. Rachael Kent is pursuing this case on behalf of millions of UK consumers. The group argues that Apple charges unreasonable entry fees to developers and monopolistically guards its apps.
While the lawsuit is a far cry from the monopolistic nature of the App Store, it highlights the commission rate in the App Store. Eighty-four percent of apps on the App Store are free, meaning developers don’t pay Apple a cent. The 15% rate was introduced last year as part of the App Store Small Business Program. This rate will remain unchanged until the App Store becomes free for everyone.
In addition to Epic Games’ recent lawsuit against Apple, the European Commission also recently charged Apple with a case of monopolistic practices in the music streaming industry. The European Commission has ruled that Apple’s fees for the App Store violate EU competition law. This case is ongoing. A final ruling is expected this fall. If the case is settled, it will likely result in a ban on Apple’s fees for the App Store.
While this lawsuit does not involve any actual anti-competitive practices, the lawsuit does highlight a common issue: the way Apple charges developers. For developers with less than $1 million in annual revenue, the company’s fees were reduced to 15 percent. Developers who make over $1 million in revenue do pay 30% of the fees. And if the lawsuit is successful, it could also set precedents for future fees.
According to Dr. Rachel Kent, a lecturer in the digital economy at King’s College London, Apple overcharges nearly 20 million users in the U.K. by 30%. And this is not only unjust, but also unfair. The company faces a court case over the matter, and the judge could award the users more than 1.5 billion pounds. She is requesting the compensation, which could be worth more than $2 billion.
Apple’s requirement that developers pay a $99 annual fee
The lawsuit, filed in the UK, was prompted by a group led by Dr. Rachael Kent, who alleges that Apple’s fee structure is unfair and inhibits competition. She is seeking $2 billion in damages and claims that Apple is a jealous gatekeeper of apps and services. While it has not commented on the lawsuit’s merits, Apple’s requirement to pay an annual fee has been the basis of other disputes.
The class action lawsuit was filed after Apple began imposing fees on developers who want to release apps on the App Store. The fee applies only to purchases made through the App Store. Developers also have to pay a $99 annual fee to receive access to the iOS app store. The lawsuit seeks to block Apple’s policies and the $99 annual developer fee.
The plaintiffs argue that the 30% commission Apple charges developers is excessive and violates the Sherman Antitrust Act. But Apple counters that the fee is reasonable and the developers should have been able to avoid it. Ultimately, the court found that the company violated the terms of its license agreement with developers by adopting a closed distribution system. The company is facing a pending trial on this issue, which could be resolved by a class-action settlement.
A class action lawsuit can be based on the monopoly location of Apple’s software in cyberspace. This means that Apple cannot set prices for third-party apps, so developers must sell their apps through the App Store. The company also has a monopoly on location in cyberspace. By charging developers an annual fee, Apple ensures that developers only sell apps through the App Store, thereby ensuring that Apple’s price-fixing practices are illegal.
Developers have long been unhappy with the fees Apple charges for app creation. As an example, developers have increased their prices to compensate for Apple’s commission. For example, 1,000 V-bucks costs $9.99 when purchased through the Apple IAP system, but just $7.99 if it’s not. The company’s fee-increasing model has led to two states to consider legislation to prevent in-app purchases altogether.
While class actions are permitted in all areas of the law, the rules are not always clear. The process requires that a plaintiff’s claim be representative of a class of similarly-situated persons. The plaintiff must prove a case in a court of law and satisfy certain procedural requirements. But if it’s successful, it can lead to a massive settlement for the developers.
Apple’s throttling of older iPhones
An agreement has been reached between Apple and the plaintiffs in a class action lawsuit alleging that it slowed down older iPhones without permission. The settlement is worth up to $500 million, with each affected iPhone owner receiving a settlement of $25. The settlement amount is preliminary and could change based on legal fees and the number of eligible iPhones. Reuters reports that the total amount will be between $310 million and $500 million.
The issue began a year after Apple first introduced the throttling. Apple admitted that it slowed down older iPhones in order to compensate for battery degradation, but did not disclose the performance throttling software. The company subsequently instituted a battery replacement program for $29, but did not disclose the performance-throttling software. Additionally, the company has given iPhone owners the option to turn off “throttling” in a future software update. Apple said the performance management system was necessary to keep iPhones running longer.
The UK-based class action claims that Apple intentionally throttled older iPhone models. The lawsuit was filed in the UK by Justin Gutmann, who alleges that Apple was misleading users and hid the power management tool in its software updates. The software update slowed down the handsets’ performance so that older devices wouldn’t shut down suddenly. Gutmann’s lawsuit seeks damages of approximately PS768 million for up to 25 million UK iPhone owners.
The case claims that Apple is guilty of misleading consumers by throttling performance of older iPhone models, which were sold in the UK. It also accuses Apple of artificially inserting pain points by reducing the performance of the phones, and for failing to inform consumers of the new throttling policy. The lawsuit could end up requiring Apple to compensate consumers. For its part, the plaintiffs hope that the settlement will make Apple compensate all affected iPhone owners.
The settlement was a win-win situation for consumers in the US and Italy. Apple has paid out a total of $500 million in compensation, and is now willing to settle more lawsuits over the issue. If Apple settles in the US, it could be a significant win for consumers in this category. If it settles in Italy, it may end up costing the company $113 million.
Although Apple has claimed that a new software update caused the issue, it did not disclose the reason behind it, so owners could not make informed decisions. The problem is not limited to Apple customers; the company has been criticized for not disclosing its decision. However, the UK tribunal is likely to award the affected consumers compensation based on US precedent. The compensation amount might not be as high as the plaintiffs would claim, but Apple will probably accept the ruling regardless.
