Chinese app developers lodge Apple antitrust complaint

Apple is currently facing accusations of anti-competitive behaviour in China, one of its largest iPhone markets, adding to the tech giant’s regulatory problems in the US and Europe.

Apple is currently facing accusations of anti-competitive behaviour in China, one of its largest iPhone markets, adding to the tech giant’s regulatory problems in the US and Europe.

The case filed with Chinese regulators alleges that Apple is abusing its control of the iOS App Store to mistreat Chinese app developers by removing their apps without good reason and levying a high charge for in-app purchases.

“[Apple founder] Steve Jobs represented the American dream. But Apple’s unequal treatment of China’s young developers stops them from realising their China dream,” said Lin Wei, a lawyer at Dare & Sure, a Beijing-based law firm that brought the case on Tuesday 8 August 2017 on behalf of 28 developers.

China made a larger profit for Apple’s App Store last year than in any other country, according to Chinese-owned market research firm International Data Corporation (IDC). Apple has an advantage in China’s mobile app development market, with the Google Play store for Android smartphones being blocked.

Despite this, Mr Lin, as well as other experts, says that it appears the company’s App Store has no legal registration in China, which would mean it does not have the licences legally required for providing internet content.

“Apple’s App Store should have a legal entity in China according to China’s regulations. But somehow it doesn’t,” said Qi Huan, head of the China Institute of International Antitrust and Investment, a think-tank.

Apple said it complied with “local laws and regulations” and that it had a process for developers to appeal against being removed and to get back into the App Store. It added: “We continue to expand our local developer relations team in China.”

The company recently made concessions to the Chinese government by setting up its first data centre in the country. In July, it deleted from its App Store several major VPN apps that help users bypass government surveillance and censorship.

Revenues in Greater China fell 10 per cent over the year ending on July 1, as domestic competitors leapfrogged Apple in smartphone sales.

Nevertheless, the complaint brought by Dare & Sure alleges that Apple has treated Chinese Apple app developers unfairly compared to their American counterparts and acts in favour of those who are also Apple’s business partners.

“When companies that are important to Apple allege that certain apps infringe their rights and should be taken down, Apple will do so with very little evidence or even no evidence,” wrote Dare & Sure in the complaint.

Apple started a worldwide crackdown on what it sees as illegitimate apps earlier this year and removed 58,000 Chinese apps in one swoop in June, according to tech research firm ASO 100.

According to Dare & Sure, Chinese app developers say they did not receive sufficient explanation for the smartphone app deletions and were left waiting months before getting their apps reinstated.

“Waiting times are long and the results of app audits can differ for no reason between companies with similar apps — or even for one company applying at different times,” said Beijing-based app developer Dai Yue. Ms Dai said that she agreed with the principle behind the app purge, which was to clean up copycat and poor-quality apps.

Chinese mobile app developers have also complained about Apple’s policy for in-app purchases. Apple takes a 30 per cent cut of all IAPs, a policy that has also been contested by European companies.

But in China’s mobile-reliant marketplace, where mobile payments are used for everything from a takeaway meal to a train ticket, what is defined as an IAP is highly contentious.

The company annoyed Chinese users earlier this year by starting to count tips to digital content creators, such as web personalities who do live streaming, as IAPs and thus eligible for the 30 per cent fee.

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