Apple developers’ lawsuit, filed back in 2019, was settled after the Cupertino company agreed to pay $100 million in damages and the court approved the deal, but the judge in the case asked lawyers to justify their $27 million cut.
The antitrust case was brought by a number of small iOS developers on the same basis as a separate case brought by Epic Games: Apple has a monopoly on the sale of iOS applications, as a result of which they are forced to give the iPhone maker a 30 percent discount. …
Background
The largest antitrust complaint filed against Apple in several countries concerned the company’s complete control over the iOS app market.
Apple claims that it does not have a dominant position in this market, as it considers either “smartphones” or “apps” to be the relevant market. Because the company has a minority share of the smartphone market in most of the countries it operates in, it believes it cannot be considered dominant.
Competition regulators tend to think that the relevant market is “iOS apps” and here Apple has a 100% monopoly on their sale and distribution. Beyond extreme cases, there is no way for a developer to bring an iOS app to market without selling it through the App Store.
Companies like Epic Games have argued that they should be allowed to sell in-app purchases without Apple taking a cut of their revenue. The argument here is that Apple is hurting developers by taking a cut of their revenue, and consumers by forcing developers to take more to make up for Apple’s share. Apple, in response, says it’s perfectly normal for the company to get some of the sales it facilitates.
Apple developer lawsuit
While all the attention was drawn to the Epic Games lawsuit, a smaller class action lawsuit on behalf of a number of smaller developers also went through the courts.
The lawsuit, filed in the U.S. District Court for the Northern District of California in San Jose, alleges Apple’s alleged anti-competitive practice of requiring only one app store for iOS devices, which creates conditions for Apple to abuse its bargaining power. […]
Today’s lawsuit seeks to force Apple to end its abusive monopoly and allow competition in the distribution of iOS apps and related products, get rid of its pricing requirements, and reimburse developers for inflated prices made as a result of abusing its monopoly power.
Two things have happened since the Apple developer filed the lawsuit:
A high-profile lawsuit by Epic Games ended in a compromise solution. Apple cut its share for 98% of developers from 30% to 15%.
This made it easier to settle a separate small developer lawsuit.
Apple’s $100 million settlement
In response, Apple offered to create a small fund to help developers. This proposal was accepted subject to approval by the court.
The Small Developer Relief Fund, created as part of the settlement, will benefit over 99% of U.S. iOS developers whose app and in-app digital product sales revenue across all linked accounts was less than $1 million in the calendar year between June 4th. , 2015 – April 26, 2021 These developers may qualify for fund amounts ranging from $250 to $30,000 depending on their historical involvement in the App Store ecosystem.
Developers were given until May 20 this year to apply for inclusion in the payment.
Judge casts doubt on $27 million legal bill
Law360 reports that the court approved the settlement but questioned the $27 million cut by the lawyer. In particular, she wants to see the impact on developer payouts.
On Tuesday, a California federal judge said she would approve Apple’s $100 million deal to settle app developers’ class-based antitrust claims, but told the Classy Attorney she wants more information on the “math” behind their $27 million attorney fee request. and about how much their fee will decrease. claims from developers of small applications.
During a hearing in Oakland, California, U.S. District Judge Yvonne Gonzalez Rogers asked class advisor Steve W. Berman of Hagens Berman Sobol Shapiro LLP to provide a mathematical breakdown of how much each class member would receive if she awarded the class advisor $25 million in royalties. . instead of the $27 million they requested in the irrevocable settlement.
The judge noted that for some developers, who she pointed out “really are the people who bear the brunt of this,” the difference between $1,000 and $2,000 can be significant.
“That’s why I want to see the numbers,” she said.
Sight
In class action lawsuits, it is not unusual for payments to be in the tens of millions of dollars, but there are so many plaintiffs that the actual amount received by the majority is only a few dollars.
The Small Developer Relief Fund gave applicants a better deal than most as it saw them receive payouts ranging from $250 to $30,000, depending on how active they were on the App Store.
However, another factor that affects payments is the fees charged by lawyers. Usually it is 25%, which means that lawyers earn tens of millions. This already seems insanely excessive for most cases, but in this case they demanded 27% – or $27 million. It’s nice to see that the judge is demanding justification for this amount.
Photo: Hunter Race/Unsplash
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