Apple's App Store Being Sued

The US top court has decided against Apple and is allowing an antitrust lawsuit to move forward. This refers to the class action lawsuit which argues that Apple has too much control over what apps are available for purchase in their App Store, and how much consumers must pay for the products.

The suit also highlights the fact that since you pay Apple directly as a consumer, and not the developers, Apple can charge whatever they deem fit on commission which can go north of 30% in some rare cases. Therefore labelling the company as a monopoly in the app market, as they have absolute control.

Apple has argued that developers might have a case on how much they're being paid, consumers don't, and therefore this case doesn't constitute an antitrust issue. The Supreme Court rejected Apple's efforts to dismiss the suit saying app buyers are buying directly from Apple and are thus not barred from suing the company under antitrust laws.

Justice Brett Kavanaugh said in the ruling: "Leaving consumers at the mercy of monopolistic retailers simple because upstream suppliers could also sue the retailers would directly contradict the longstanding goal of effective private enforcement in antitrust cases."

App Store fees make a large portion of Apple's growing Service Revenues, which also includes revenues from Apple Music, Apple Pay, Apple Care and the iTunes Store. According to Statista, as of January 2019, since inception Apple has paid out more than $120 billion to app developers after taking its cut.

If we take the flat 30% commission, this means Apple has made over $30 billion through the App Store since inception. In the 2018 financial year, App Store commissions may have contributed approximately $10 billion to Apple's Service Revenues, factoring that the company paid $34 billion to developers between Jan 2018 and 2019.

You will find more infographics at Statista