Apple taking legal action against Russian antitrust body that seeks outside App Store payments on iPhones

Apple taking legal action against Russian antitrust body that seeks outside App Store payments on iPhones

Apple has taken a stance against the allegations of monopoly made by Russian antitrust agency. The legal action seeks to refute the requirement of third-party payment methods on iOS, which is sure to impact Apple's App Store revenue if brought to effect.

(Image: Reuters) (Image: Reuters)
Story highlights
  • Apple is facing allegations of antitrust violation in several countries.
  • The company maintains that it requires the App Store commissions for technical support.
  • It has now challenged the Russian FAS for its warning for compliance to the company.

Apple is facing allegations of controlling the smartphone market in several countries of the world and the company is now fighting these. The tech major has initiated a legal action against Russia's Federal Antimonopoly Service (FAS), challenging its warning to the company against market monopoly.

Back in August this year, FAS had issued a warning to Apple to "stop abuse in the market" with its App Store fee charged on each in-app sale. At the time, the regulatory body gave Apple a September 30 deadline to resolve the alleged issue. The agency even warned the company of a penalty if it failed to take action.

There were no changes made to Apple's revenue model even after the warning, post which FAS initiated a lawsuit against the company for not adhering to the request. If charged with non-compliance, Apple may face a penalty calculated on the basis of its revenue in Russia.

As reported by RT, Apple has now appealed for a judicial review of the warning by FAS. With this, the company wants to challenge the body's allegations of Apple having a monopoly over the market through its App Store sales.

Apple maintains that it requires up to 30 per cent commission on each sale by its users. The revenue is said to empower the technical integration and back-end performance of apps on the App Store. In a legal filing by the company in the US earlier this month, it mentions that the commission is also needed in case the transactions are happening through the web, i.e. on platforms other than the App Store.

For now, the company only allows in-app purchases through the App Store for all iOS users, a business model that is being increasingly challenged throughout the world. Other than the US and Russia, similar allegations against Apple have also been made in Europe by the European Union.

In Russia, iPhone users and iOS developers raised the concern to the regulatory body, mentioning how in-app items sold through the web were available for less than their price on the App Store. The difference was simply the App Store cut the Apple charges to the developers on each sale.

Since then, FAS is rallying for a legality which will require Apple to let app developers provide alternative payment options to the users. As can be understood, doing so will directly impact the company's revenue stream through the apps listed on the App Store. Whether Apple manages to maintain this or has to comply with new norms in the future remains to be seen.