Australian lawyers are seeking app developers to join a class action against Google and Apple over what they claim is an abuse of market power by charging 30% commission on in-app spend while preventing competing payment alternatives.

The class action mirrors similar legal action initiated in 2020 by Epic Games, the company behind Fortnite, against the two tech titans. The case against Apple will be tried in March 2024. An attempt by Google to request a stay of the proceedings was rejected rejected by the Federal Court last year.

Authorities around the world have been scrutinizing Apple and Google over their app store charges. Apple settled a class action in the US in 2021 and allowed app developers to use alternative payment systems.

The local competition regulator, the ACCC, has also addressed the issue as part of its investigation into digital platform services, and in 2021 the US introduced legislation to address anti-competitive behavior in mobile app marketplaces.

The current class action, jointly conducted by Maurice Blackburn Lawyers and Phi Finney McDonald, alleges that Google and Apple have violated Australian consumer law and imposed prices by not allowing competitors to offer alternative, lower-cost payment systems.

Phi Finney McDonald Principal Joel Phibbs said the app store vendors “are rightly more scrutinized by regulators.

“And now this groundbreaking case gives consumers and app developers the chance to take on these global technology giants and seek compensation,” he said.

The class action is against Google, alleging that the company has “a substantial degree of leverage in the markets for the purchase of Android apps from the Australian Google Play Store” and limited access to alternative payment methods as well as commissions charged on app sales and in-app purchases well above levels in a competitive market.

The process seeks compensation from Google to eligible users for the additional price charged to those users.

Last month, the federal court allowed the class action to be extended to local app designers/founders who may have suffered loss or damage from the conduct of Apple and Google.

Maurice also participates in the Epic action where the issues are the same, then runs a separate trial where they aren’t, claiming damages on behalf of both app developers and customers.

Maurice Blackburn Class Action Principal Kimi Nishimura said Apple dominates the Australian market, accounting for 55% of smartphone sales, with the rest running on Google’s Android system.

“This case is about a blatant abuse of market power by both Apple and Google, which should result in app developers and consumers being paid significant compensation,” she said.

Customers are already covered by the class action, but app developers interested should contact Phi Finney McDonald on 03 9134 7100 or email [email protected] for more information.