‘Apple tax’ antitrust case can proceed – China’s Supreme Court

A Chinese consumer has been given the go-ahead to take an “Apple tax” antitrust case to court, as China’s Supreme Court rejected Apple’s call for the lawsuit to be thrown out.

A local report says that this is a small legal loss, but could have big implications for the Cupertino company …

South China Morning Post (SCMP) reports.

China’s Supreme Court has made a civil ruling in favour of a consumer versus the China subsidiary of Apple, in a legal development lawyers say could open the gates for more consumers in the country to file similar complaints against the iPhone maker in local courts […]

The case involves Jin Xin, who is demanding Apple stop charging 30 per cent commission on purchases in the China App Store, and to allow Chinese consumers to make payments through wallets other than Apple Pay, to provide 100,000 yuan (US$15,500) in compensation and to issue a public apology […]

In his lawsuit Jin alleges that the prices of in-app services offered by apps in Apple’s App Store, including video app iQiyi, podcast app Himalaya, and music app NetEase Music, are higher than in Android app stores – possibly as a result of Apple’s 30 per cent App store commission. Jin also cites China’s Anti-Monopoly Law in accusing Apple of “anticompetitive” practices.

This is because Android apps are available from third-party app stores, which typically charge no commission on non-gaming apps, while making up for it with a 50% commission on games.

No ruling was made on the lawsuit itself, but Apple’s request for the case to be dismissed was turned down.

The Supreme People’s Court in China ruled that a lawsuit filed by a Chinese consumer against Apple’s China entity on antitrust grounds could proceed in a Shanghai court, rejecting Apple’s plea that its China entity, which mainly distributes Apple’s products in China, should not be sued over issues related to App Store operations […]

In its ruling published last Monday, China’s top court said Apple had potentially abused its market position and undermined competition – that is why the case can be heard.

A senior lawyer says the decision could open the floodgates to similar claims by both individuals and companies.

You Yunting, a senior partner at Shanghai Debund Law Firm, said that the top court’s ruling could have a far-reaching impact.

“I think this case has established a new principle namely that antitrust cases are also rights infringement cases and thus can be adjudicated by local courts. So this means that the victims in antitrust cases, for example the competitors of the monopolistic company or consumers, may very likely go to their local court for legal actions,” You said.

This seems especially likely given that it’s common for developers to charge more for in-app subscriptions for iOS apps than they do for the Android equivalents.

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