Apple wins legal battle in China over app store fees


People stand outside a recently-opened Apple Store in Shanghai on March 26, 2024. Apple is defending its App Store fees on multiple fronts, including a lawsuit at home in the US and challenges in Europe, South Korea and Japan. The resolution to the China complaint relieves one potential pressure point for further change to the highly lucrative business. — AFP

A Chinese court dismissed a case filed by a local consumer against Apple Inc’s commission fees for purchases via its App Store, granting the US company some reprieve as it faces growing scrutiny around the world over its practices.

Apple has not abused its status despite dominating the App Store, the Shanghai Intellectual Property Court said in an unpublished Wednesday verdict seen by Bloomberg News. The court heard the case filed by an individual named Jin Xin earlier Wednesday, after a 2021 decision by China’s Supreme Court gave the green light to the case against Apple and other similar complaints.

Apple is defending its App Store fees on multiple fronts, including a lawsuit at home in the US and challenges in Europe, South Korea and Japan. The resolution to the China complaint relieves one potential pressure point for further change to the highly lucrative business. The company has consistently said its fees are justified by the security and peace of mind it provides users, while giving developers a global showcase for their apps.

The case was part of Apple’s multiplying woes in China as it faces a stiff challenge from Huawei Technologies Co in the premium smartphone market. Rising nationalist sentiment in the country and trade tensions with Washington threaten to undermine one of Apple’s key markets. Beijing extended a ban on foreign devices in official workspaces last year. Demand for iPhones in China plummeted in the first two months of this year, and only recovered in the past two months partly thanks to discounts and deals.

Jin, the plaintiff, had accused Apple of abusing its market dominance, both with its 30% commission on in-app purchases and by accepting only its proprietary Apple Pay as a payment method. Similar complaints have been levied in other jurisdictions.

The Shanghai court and Apple did not immediately respond to requests seeking comments.

A US federal judge chastised a top Apple executive earlier this month for maintaining the non-competitive environment in its App Store after she’d previously ruled that the iPhone maker must allow links to alternative online payment options for app developers.

In January, Apple announced historic revamps in response to the European Union’s new Digital Markets Act. The changes allow customers to download software from outside the App Store for the first time, as well as to use alternative payment systems. – Bloomberg

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