Australian lawyers are seeking app developers to join a class action against Google and Apple over what they claim is an abuse of market power by charging 30% commissions on in-app spending while preventing competitive payment alternatives.
The class action reflects similar legal action launched in 2020 by Epic Games, the company behind Fortnite, against the two tech titans. The case against Apple is set down for trial in March 2024. An attempt by Google to seek a stay on proceedings was rejected by the Federal Court last year.
Authorities around the world have been taking a close look at Apple and Google over their app store charges. Apple settled a class action in the US in 2021 and allowed app developers to use alternative payment systems.
Local competition regulator the ACCC has also been tackling the issue as part of its digital platforms services inquiry, and in 2021 the US introduced legislation to tackle anticompetitive behaviour in mobile app marketplaces.
The current class action, being run jointly by Maurice Blackburn Lawyers and Phi Finney McDonald, alleges that Google and Apple breached Australian Consumer Law and forced up prices by not allowing competitors to offer alternate, better value payment systems.
Phi Finney McDonald Principal Joel Phibbs said the app store suppliers “are quite rightly facing increased scrutiny” from regulators.
“”And now this landmark case gives consumers and app developers the opportunity to stand up to these global tech giants and seek compensation,” he said.
The class action takes aim at Google alleging the company has “a substantial degree of power in the markets for the purchase of Android apps from the Australian Google Play Store” and both limited access to alternative payment methods and charged commissions on app sales and in-app purchases well above the levels in a competitive market.
The proceeding seeks compensation for eligible users from Google for the excess price charged to those users.
Last month, the Federal Court allowed the class action to be expanded to include local app designers/founders who may have suffered loss or damage due the conduct of Apple and Google.
Maurice is also participating in the Epic action where the issues are the same, and then running a separate trial where they are not, seeking damages on behalf of both app developers and customers.
Maurice Blackburn Class Action Principal Kimi Nishimura said Apple dominates the Australian market, accounting for 55% of smart phone sales, with the rest running on Google’s Android system.
“This case is about 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,” she said
Customers are already covered by the class action, but app developers interested in it should contact Phi Finney McDonald on 03 9134 7100 or email enquiries@phifinneymcdonald.com for details.
