State attorney-generals representing Utah, Colorado, Indiana, Texas and others, have filed antitrust lawsuits against big tech firms such as Facebook-owner Meta and and Google, but this is the first time they have sued Apple.
The states said: "Apple's conduct has harmed and is harming mobile app developers and millions of citizens. Meanwhile, Apple continues to monopolise app distribution and in-app payment solutions for iPhones, stifle competition, and amass supracompetitive profits within the almost trillion-dollar-a-year smartphone industry."
The action follows a ruling by a U.S. district judge in Oakland, California in favour of Apple last year.
The decision found that commissions of 15% to 30% which Apple imposes on app makers for use of their in-app payment system did not violate antitrust law.
Epic challenged the ruling in the 9th U.S. Circuit Court of Appeals and Apple’s response is expected in March.
The states argued in their filing that the lower court erred on two counts. Firstly, by deciding that key antitrust law did not apply to non-negotiable contracts that Apple makes app developers sign. Secondly, by failing to adequately consider the pros and cons of Apple’s rules.
“Paradoxically, firms with enough market power to unilaterally impose contracts would be protected from antitrust scrutiny - precisely the firms whose activities give them most cause for antitrust concern,” they said.
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