Apple faces antitrust complaint on apps

A pedestrian carries a shopping bag as she passes a giant Apple Inc logo outside a new Apple store, still under development, on Princess Street in Edinburgh, UK, Sept 17, 2014. [Photo/VCG]

Apple Inc is facing an antitrust complaint in China after a law firm representing dozens of Chinese app developers filed a case to regulators, alleging that the United States tech giant is misusing its market dominance to mistreat local developers.

The case is the first time that Apple has been accused of monopolistic and anticompetitive behaviors in China, its biggest source of app revenue.

The Beijing-based law firm Dare & Sure, which represents 28 app developers, said it has lodged official complaints with the National Development and Reform Commission and the State Administration for Industry and Commerce, the country's top two regulators, alleging that Apple is abusing its control of the iOS app store to treat Chinese developers unfairly.

"It is banning their apps without reasonable justification and levying a 30 percent cut of in-app purchases, and never seeking a discussion with developers," Dare& Sure said in a statement.

Apple removed nearly 60,000 Chinese apps in June, as part of a broader push to delete apps that did not meet its app store guidelines, according to data analysis platform ASO 100.

The US company is also accused of taking a different approach on complaints from China than it does on those from the United States, as well as preventing in-app purchases via a third-party payment tool.

Apple said on Thursday that it has complied with local laws and regulations, and that it published guidelines that apply equally to all developers in every country in which it operates. The company also said it would continue to expand the local developer relations team in China and was working hard to offer developers better services.

The NDRC and SAIC did not immediately respond to requests for comment.

Apple is stepping up efforts to boost revenue from services, after a continuing decline in its smartphone sales in the country. China gained the top spot for iOS App Store sales in 2016 and the country's iOS revenue hit more than $2 billion in the fourth quarter of last year.

He Jing, an antitrust lawyer at Beijing-based Anjie Law Firm, said Apple's dominant role in its own iOS operating system has attracted lots of criticism for action such as removing apps from the App Store.

"But multiple players are running their own versions of app stores. The key is whether Apple will be considered to have a dominant market position in the relevant market. Apple will definitely deny that, such as claiming the relevant market should at least refer to all smartphone application stores, in which it would not have a dominant market position."

Li Yi, chief researcher at the internet research center of the Shanghai Academy of Social Sciences, said app store revenue is of increasing importance to Apple. The dispute is very likely to be settled after private discussions, Li said.