Aussie developers join class action against Google, Apple

Brandon How

Australian app developers have joined a class action lawsuit against Big Tech giants Google and Apple alleging abuse of power in their respective app stores.

The class actions, being jointly run by Phi Finney McDonald and Maurice Blackburn Lawyers, will be expanded to include Australian app developers following a decision by the Federal Court of Australia last month.

The proceedings, initially launched on behalf of consumers in June 2022, allege Google and Apple “breached Australian Consumer Law and forced up prices by not allowing competitors to offer alternate, better value payment systems”.

The cases are running concurrently with Fortnite developer Epic Games’ lawsuits against the tech giants — in November 2020 and March 2021, respectively — for alleged anti-competitive behaviour regarding in-app payment requirements using their online stores. The Epic cases are only due to return to court in March 2024.

A spokesperson for Maurice Blackburn said that it would “be joining Epic action to argue our case where the issues are the same (there are many similar points of claim) and then running a separate trial where the issues are distinct”.

The next joint case management conference for the Epic cases and the class actions against Google and Apple will be held on April 6.

Initially launched by Phi Finney McDonald with funding from United Kingdom-based Vannin Capital in June 2022, the class actions against Apple and Google argue the tech giants used their “substantial degree of power in the markets for the purchase of apps” to impose anti-competitive restrictions and charged unfairly high commission rates.

In particular, developers were charged a 30 per cent commission on the purchase of their apps, or 15 per cent for developers with less than US$1 million in annual revenue, on both the Apple App Store and the Google Play store.

Maurice Blackburn Class Action principal Kimi Nishimuara said the class action alleges 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”.

Phi Finney McDonald principal Joel Phibbs said “Google and Apple are quite rightly facing increased scrutiny from regulators”, with the latests case “giving consumers and app developers the opportunity to stand up to these global tech giants and seek compensation”.

The law firm would not disclose how many developers are currently a part of the class action. It is also encouraging interested parties to get in contact.

According to the class action, 55 per cent of smartphones sold in Australia are running on an Apple system, with the rest running on Google’s Android system.

In August 2021, Apple settled a US class action from 67,000 developers for $100 million on allowing for payment systems other than the app store to be used on apps running on iOS devices. Of the developers, 95 per cent received pay-outs of between $250 to $2,000, with 51 per cent receiving just $250.

In September 2021, a District Court for the Northern District of California case brought by Epic Games against Apple ruled that it did not engage in antitrust behaviour on nine of ten counts. However, its anti-steering policy which prevents apps from directing or users to payment systems outside of Apple’s in-app purchase system was deemed anti-competitive.

A similar case against Google, also initiated by Epic Games in the same US district court will go to trial in November 2023.

Chair of the Australian Consumer and Competition Commission, Gina Cass Gottlieb, has previously said that action against big tech companies for anti-competitive behaviour is too slow and has called for greater regulation. The ACCC began work on its seventh digital platforms inquiry interim report last month.

Stronger regulation to lessen the market power of ‘gatekeeper’ platforms was introduced in the European Union through the Digital Markets Act and the Digital Services Act Act last July.

This included a ban on self-preferencing a service provider’s own products on their platforms, a ban of processing users’ personal data for targeted advertising without explicit consent, and a requirement that platforms allow third-party services to inter-operate with their own services

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