Dozens of US states say Apple stifles competition; back 'Fortnite' maker
OAKLAND: Apple Inc is stifling competition through its
mobile app store, attorneys general for 34 US states and the District of
Columbia said on Thursday (Jan 27), as they appealed against a ruling that let
the iPhone maker continue some restrictive practices.
While dozens of state attorneys general have filed recent
antitrust lawsuits against other big tech companies, including Facebook owner
Meta Platforms Inc and Alphabet Inc's Google, none had so far taken aim at
Apple.
Thursday's remarks, led by the state of Utah and joined by
Colorado, Indiana, Texas and others, came in a lawsuit in an appeals court
against app store fees and payment tools between "Fortnite" video
game maker Epic Games and Apple.
"Apple's conduct has harmed and is harming mobile app
developers and millions of citizens," the states said.
"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."
The action comes after a US district judge in Oakland,
California, mostly ruled against Epic last year.
That decision found that commissions of 15 percent to 30 percent
which Apple charges some app makers for use of an in-app payment system the
company forced on them did not violate antitrust law.
Epic challenged the ruling in the 9th US Circuit Court of
Appeals. On Thursday, professors, activist groups and the states weighed in
through court filings that described legal arguments in support.
Apple's reply is expected in March. On Thursday, the company
said it was optimistic that Epic's challenge would fail.
The states said in their filing that the lower court erred
by failing to adequately balance the pros and cons of Apple's rules and also by
deciding that a key antitrust law did not apply to non-negotiable contracts
Apple makes developers sign.
"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.
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