The lawsuits include estimates that 55 per cent of the 20.6 million smartphones in Australia are iPhones and 45 per cent of people use phones with the Android operating system.
This resulted in substantially reduced competition, the lawsuits allege, in the distribution of apps and how purchases are made for them and within them.
‘Higher prices for users’
“This conduct resulted in higher prices for users who purchased apps and in-app digital content through the Australian” App Store and Google Play Store, said Phi Finney McDonald, the Melbourne-based class action law firm representing consumers in the class actions.
Both legal actions have been compiled by Phi Finney McDonald and are being funded by litigation funder Vannin Capital. The class actions cover eligible iPhone, iPad and Android tablet and smartphone users who purchased apps in the App Store or Google Play between November 6, 2017 and June 20, 2022.
A Google spokesman said: “Android gives people more choice than any other mobile platform in deciding which apps and app stores they use – most Android phones come preloaded with more than one app store. We compete vigorously and fairly for developers and consumers.
“Google Play is the first major platform to move away from one-size-fits-all pricing to meet developers’ different needs and our fees are the lowest among major app stores. Today, just around 3 per cent of developers are subject to a service fee and 99 per cent of those developers qualify for a service fee of 15 per cent or less.”
Apple did not comment. Phi Finney McDonald were contacted for comment.
The move builds on a bitter dispute between Apple, Google and the creator of Epic Games’ popular Fortnite, which has been fought in US and Australian courts. The trial date has been pushed back to 2024.
Epic Games sued Apple in the Federal Court of Australia in 2020 after Apple blocked its games from appearing in the App Store as part of a long-running dispute over payments.
In August last year, Apple settled a class action in the US, allowing developers of apps to implement their own payment systems outside of the App Store and to communicate directly with customers about the alternative methods of payments. The lawsuit, brought by around 67,000 developers, included a $US100 million settlement.
The Australian competition regulator has identified issues in Apple’s App Store and the Google Play Store including the companies’ market power, the terms for app developers, payment arrangements and concerns with alleged self-preferencing.
“The duopoly in the market for mobile OS and the significant barriers to entry and expansion provide each of Google and Apple significant market power in the supply of mobile operating systems in Australia,” the Australian Competition and Consumer Commission wrote in its study of the app marketplace as part of its digital platform services inquiry series.
