Chinese Developers File Antitrust Complaint Against Apple

A group of Chinese app developers has filed a complaint against Apple, alleging that the company had violated antitrust regulations in its App Store. And the complaint is only the latest sign of Apple’s increasing trouble in the country.

The complaint, which was filed with Chinese regulators, accuses Apple of anticompetitive and monopolistic behavior. The group of developers allege that Apple charges excessive fees for in-app purchases, doesn’t give explanations or details for arbitrary app removal, and doesn’t respond to queries in Chinese — putting local developers are a disadvantage — according to The Wall Street Journal.

The case was filed by Beijing-based law firm Dare & Sure, and sent to two separate Chinese regulatory entities: the National Development and Reform Commission and the State Administration for Industry & Commerce. “Steve Jobs represented the American dream. But Apple’s unequal treatment of China’s young developers stops them from realizing their China dream,” Dare & Sure’s Lin Wei said in a statement.

Apple began cracking down on illegitimate apps earlier this year, which resulted in the removal of over 58,000 Chinese apps. According to the developer’s complaint, Chinese app makers never received sufficient explanations for their apps being removed — and were often left waiting months before they were able to get their legitimate apps back onto the marketplace. Additionally, the developers allege that Apple takes too high of a cut for in-app purchases — around 30 percent. In China, in-app purchases on mobile platforms like Weibo are widely used for everyday transactions — from buying public transit tickets to ordering food.

China is an extremely important market for Apple, and specifically, its App Store. Apple made more money in China via its digital marketplace than any other country, according to research firm IDC. Apple’s iOS also has an edge over Android — its largest competitor — as Google Play is blocked within China.

An even bigger issue, Lin contends, is that Apple’s App Store doesn’t appear to have legal registration in China, making it technically illegal for the company to provide internet content within the country, according to The Financial Times. Apple, for its part, says that it does comply with all “local laws and regulations.” Despite that, analysts and tech executives are predicting that “Apple’s troubles [in China] have just started.” Specifically, as the company shifts from being, primarily, a hardware manufacturer to more of a content provider. The Chinese government notoriously restricts the flow of information and content, which could bring Apple’s Services business into further conflict with local regulatory bodies.

The Cupertino-based tech giant has already compromised on several issues in China. Last month, Apple removed all major VPN apps in the country in accordance with new Chinese regulations that required the anonymity platforms to be explicitly approved and licensed by the government. The company also recently opened its first data center in China, allowing it to store user information locally.

[Source”cnbc”]

Chinese developers target Apple with antitrust suit

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Apple is facing complaints of anti-competitive behavior in China, according to The Financial Times.

The case, filed by a Chinese law firm on behalf of 28 local developers, alleges Apple violated antitrust regulations by abusing its control of the iOS App Store by charging excessive fees for in-app purchases and removing apps from its local store without detailed explanation.

In a statement, Apple noted that its App Store guidelines apply equally to all developers across all countries, and in the chance an app is removed from the App Store, developers have the opportunity to request a review to reinstate the app in a timely manner.

The complaint comes as Apple continues its efforts to maintain strong ties with China’s government, which has heavily restricted the ability of western technology companies to compete.

  • A few weeks ago, Apple announced the removal of several virtual private network (VPN) services from its App Store in China. This move came as the Chinese government had been pressuring the firm to ban all VPNs — which allow users to bypass China’s heavily regulated internet — that aren’t approved by state regulators.
  • Earlier this month, the company announced plans to begin storing its Chinese users’ data on servers run by a Chinese government-controlled company. This could arguably give the government access to users’ personal information. Meanwhile, CEO Tim Cook has taken a hard line against sharing user data with the US government.

Apple is looking to China as a key growth market, but has struggled in the region in recent quarters. With the Google Play store for Android smartphones being blocked in China since 2010, the Chinese app market plays to Apple’s advantage; China accounts for Apple’s largest source of iOS app revenue, according to App Annie. The country is also the firm’s largest market outside the US, accounting for over one-fifth of Apple’s total revenue in the 2016 fiscal year. However, revenue derived from China has fallen for six consecutive quarters, to $8 billion in fiscal Q3 (that ended June 30) 2017, down 10% from fiscal Q3 2016.

Laurie Beaver, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on app monetization that:

  • Provides key factors driving the expected growth of global app revenue
  • Evaluates the top app monetization strategies
  • Looks at emerging trends to help developers navigate the app ecosystem
  • Explains the challenges that developers face to compete in the app market
  • And much more
  • [Source”cnbc”]