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EXCLUSIVE Apple hit with antitrust case in India over in-app payments issues

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  • Apple faces case similar to one in European Union
  • Non-profit group says Apple policies anti-competitive in India
  • Apple mandates 30% in-app fee that hurts app developers-filing
  • India watchdog to review case, decide on next steps-source

NEW DELHI, Sept 2 (Reuters) – Apple Inc (AAPL.O) is facing an antitrust challenge in India for allegedly abusing its dominant position in the apps market by forcing developers to use its proprietary in-app purchase system, according to a source and documents seen by Reuters.

The allegations are similar to a case Apple faces in the European Union, where regulators last year started an investigation into Apple’s imposition of an in-app fee of 30% for distribution of paid digital content and other restrictions.

The Indian case was filed by a little-known, non-profit group which argues Apple’s fee of up to 30% hurts competition by raising costs for app developers and customers, while also acting as a barrier to market entry.

“The existence of the 30% commission means that some app developers will never make it to the market … This could also result in consumer harm,” said the filing, which has been seen by Reuters.

Unlike Indian court cases, filings and details of cases reviewed by the Competition Commission of India (CCI) are not made public. Apple and the CCI did not respond to a request for comment.

In the coming weeks, the CCI will review the case and could order its investigations arm to conduct a wider probe, or dismiss it altogether if it finds no merit in it, said a source familiar with the matter.

“There are high chances that an investigation can be ordered, also because the EU has been probing this,” said the person, who declined to be identified as the case details are not public.

The complainant, non-profit “Together We Fight Society” which is based in India’s western state of Rajasthan, told Reuters in a statement it filed the case in the interest of protecting Indian consumers and startups.

In India, though Apple’s iOS powered just about 2% of 520 million smartphones by end-2020 – with the rest using Android – Counterpoint Research says the U.S. firm’s smartphone base in the country has more than doubled in the last five years.

The Apple case in India comes just as South Korea’s parliament this week approved a bill that bans major app store operators like Alphabet Inc’s (GOOGL.O) Google and Apple from forcing software developers to use their payment systems.

A salesperson walks past an advertisement at an Apple reseller store in Mumbai, India September 1, 2021. REUTERS/Francis Mascarenhas

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“MIDDLEMAN IN TRANSACTIONS”

Companies like Apple and Google say their fee covers the security and marketing benefits their app stores provide, but many companies disagree.

Last year, after Indian startups publicly voiced concern over a similar in-app payments fee charged by Google, the CCI ordered an investigation into it as part of a broader antitrust probe into the company. That investigation is ongoing.

The India antitrust case against Apple also alleges that its restrictions on how developers communicate with users to offer payment solutions are anti-competitive, and also hurt the country’s payment processors who offer services at lower charges in the range of 1-5%.

Apple has hurt competitors by restricting developers from informing users of alternative purchasing possibilities, thereby harming “app developers’ relationship with their customers by inserting itself as middleman in every in-app transaction,” the filing added.

In recent weeks, Apple has loosened some of the restrictions for developers globally, like allowing them to use communications – such as email – to share information about payment alternatives outside of their iOS app.

And on Wednesday, it said it would allow some apps to provide customers an in-app link to bypass Apple’s purchase system, though the U.S. firm retained a ban on allowing other forms of payment options inside apps.

Gautam Shahi, a competition law partner at Indian law firm Dua Associates, said that even if companies change their behaviour after an antitrust case in filed, the CCI still looks at past conduct.

“The CCI will look at recent years to see if the law was violated and if consumers and competition were harmed,” said Shahi.

The CCI has plans to speed up all cases involving big technology firms such as Amazon (AMZN.O) and Google by deploying additional officers and working to more stringent internal deadlines, Reuters reported in June.

Reporting by Aditya Kalra in New Delhi; Additional reporting by Stephen Nellis in San Francisco; Editing by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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Business

Pilots union sues Southwest Airlines, alleges violation of federal labor law

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Aug 31 (Reuters) – A union representing Southwest Airlines Co (LUV.N) pilots has filed a lawsuit challenging forced time off and other changes to working conditions imposed by the airline during the COVID-19 pandemic.

The Southwest Airlines Pilots Association filed a complaint in federal court in Dallas on Monday claiming that the carrier implemented an “emergency time off” program, altered schedules, and scaled back prescription drug and retirement benefits without bargaining, in violation of federal labor law.

It claims Southwest should have collectively bargained with the union instead of giving itself “force majeure” rights when air travel plummeted during the pandemic.

The lawsuit marks an escalation in mounting tensions between the airline and its staff. Its pilots union has threatened to picket over the winter holidays to protest against a host of issues including a gruelling work schedule, a lack of food and accommodation and COVID-19 protocols.

The protest prompted the company last week to trim flight schedules for this fall in a bid to better align its operations with staffing. read more

In the lawsuit, the union said the airline is bound by the terms of the collective bargaining agreement that lapsed in August last year, but remains in effect until a new agreement is reached and does not contain a “force majeure” clause.

It asked the court for an injunction, requiring Southwest to stick to the provisions of the lapsed agreement, and negotiate the terms for an “emergency extended time off” program, and COVID 19-related work conditions.

In an email sent to its members on Tuesday, the union said the lawsuit was the “only recourse” to compel the company to meet its duty to collectively bargain.

Russell McCrady, Southwest vice president of labor relations, in a statement said that the airline disagrees that any COVID-related changes adopted in recent months required negotiation.

“As always, Southwest remains committed to pilots’ health and welfare and to working with SWAPA, and our other union partners, as we continue navigating the challenges presented by the ongoing pandemic,” he said.

Reporting by Daniel Wiessner in New York and Rajesh Kumar Singh in Chicago; Editing by Richard Chang, Mark Porter and Richard Pullin

Daniel Wiessner

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.

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Technology

S.Korea parliament committee votes to curb Google, Apple commission dominance

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A 3D printed Google logo is placed on the Apple Macbook in this illustration taken April 12, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

SEOUL, Aug 25 (Reuters) – A South Korean parliamentary committee voted early on Wednesday to recommend amending a law, a key step toward banning Google and Apple from forcibly charging software developers commissions on in-app purchases, the first such curb by a major economy.

After the vote from the legislation and judiciary committee to amend the Telecommunications Business Act, dubbed the “Anti-Google law,” the amendment will come to a final vote in parliament.

That vote could come on Wednesday, although South Korean news agency Yonhap reported that parliament would act at a later date. read more

A parliament official told Reuters the office had not yet received an official request not to hold the meeting on Wednesday.

Apple Inc (AAPL.O) and Alphabet Inc’s (GOOGL.O) Google have both faced global criticism because they require software developers using their app stores to use proprietary payment systems that charge commissions of up to 30%.

In a statement on Tuesday, Apple said the bill “will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections”, hurt user trust in App Store purchases and lead to fewer opportunities for South Korean developers.

Wilson White, senior director of public policy at Google, said “the rushed process hasn’t allowed for enough analysis of the negative impact of this legislation on Korean consumers and app developers”.

Legal experts said app store operators could work with developers and other companies to create secure payment methods other than the ones they provide.

“Google and Apple aren’t the only ones that can create a secure payment system,” said Lee Hwang, a Korea University School of Law professor specialising in competition law. “I think it’s a problem to try to inspire excessive fear by talking about safety or security about using different payment methods.”

Based on South Korean parliament records, the amendment bans app store operators with dominant market positions from forcing payment systems on content providers and “inappropriately” delaying the review of, or deleting, mobile contents from app markets.

It also allows the South Korean government to require an app market operator to “prevent damage to users and protect the rights and interests of users”, probe app market operators, and mediate disputes regarding payment, cancellations or refunds in the app market.

This month in the United States, a bipartisan group of senators introduced a bill that would rein in app stores of companies that they said exert too much market control, including Apple and Google. read more

Reporting by Heekyong Yang and Joyce Lee. Editing by Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

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Business

UK court sets scene for $14 bln-plus class action against Mastercard

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  • Britain’s first consumer class action authorised
  • UK Supreme Court overruled objections to case in December
  • Claimants allege Mastercard overcharged 46 million people

LONDON, Aug 18 (Reuters) – A London court on Wednesday approved a 10 billion pound-plus ($14 billion-plus) class action against global payments processor Mastercard (MA.N) that claimants said could entitle 46 million British adults to roughly 300 pounds each if it is successful.

The Competition Appeal Tribunal (CAT) had been expected to certify Britain’s first mass consumer class action, brought by former financial ombudsman Walter Merricks, after the UK Supreme Court overruled objections to it in December. read more

The decision to finally authorise the five-year case as a collective action establishes a standard for a string of other proposed class actions that have been stalled in its wake.

“Mastercard has thrown everything at trying to prevent this claim going forward, but today its efforts have failed,” Merricks said in a statement.

“The tribunal’s ruling heralds the start of an era of consumer-focused class actions which will help to hold big business to account in areas that really matter.”

Mastercard said the “spurious” claim was being driven by lawyers and backed by organisations “primarily focused on making money for themselves”.

Merricks alleges Mastercard charged excessive “interchange” fees – the fees retailers pay credit card companies when consumers use a card to shop – between May 1992 and June 2008 and that those fees were passed on to consumers as retailers raised prices.

But Merricks failed to expand the scope of the case by adding the estates of the deceased and compound interest to the claim. Mastercard said this reduced the claim’s size to around 10 billion pounds. The claimants put it at 15 billion pounds.

“The decision today reduces the value of this spurious claim by more than 35%,” Mastercard said in a statement.

“Mastercard is confident that over the coming months a review of key facts will further significantly reduce the size and viability of the claim.”

($1 = 0.7265 pounds)

Reporting by Kirstin Ridley; Editing by Steve Orlofsky

Our Standards: The Thomson Reuters Trust Principles.

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Business

Samsung leader Jay Y. Lee released from prison on parole

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UIWANG, South Korea, Aug 13 (Reuters) – Samsung Electronics (005930.KS) Vice Chairman Jay Y. Lee, convicted of bribery and embezzlement, was released on parole on Friday.

Lee appeared outside the Seoul Detention Center, wearing a dark grey suit and looking thinner than when he was last detained in January. read more

“I’ve caused much concern for the people. I deeply apologise,” Lee told reporters. “I am listening to the concerns, criticisms, worries and high expectations for me. I will work hard.”

In a symbolic move, Samsung Electronics on Thursday made good on a promise by Lee by announcing it had signed its first-agreements with four company labour unions that cover the provisions of offices and assurances that union activities will be allowed.

Lee vowed in May 2020 to improve labour rights at the tech giant. A raft of Samsung employees have been found guilty of sabotaging labour union activities.

Reporting by Dogyun Kim and Joyce Lee; Additional reporting by Sunghyuk An; Editing by Edwina Gibbs

Our Standards: The Thomson Reuters Trust Principles.

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Business

Zoom reaches $85 mln settlement of lawsuit over user privacy, ‘Zoombombing’

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Small toy figures are seen in front of Zoom logo in this illustration picture taken March 15, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Aug 1 (Reuters) – Zoom Video Communications Inc (ZM.O) agreed to pay $85 million and bolster its security practices to settle a lawsuit claiming it violated users’ privacy rights by sharing personal data with Facebook, Google and LinkedIn, and letting hackers disrupt Zoom meetings in a practice called Zoombombing.

A preliminary settlement filed on Saturday afternoon requires approval by U.S. District Judge Lucy Koh in San Jose, California.

Subscribers in the proposed class action would be eligible for 15% refunds on their core subscriptions or $25, whichever is larger, while others could receive up to $15.

Zoom agreed to security measures including alerting users when meeting hosts or other participants use third-party apps in meetings, and to provide specialized training to employees on privacy and data handling.

The San Jose-based company denied wrongdoing in agreeing to settle. It did not immediately respond on Sunday to a request for comment.

Saturday’s settlement came after Koh on March 11 let the plaintiffs pursue some contract-based claims. read more

Though Zoom collected about $1.3 billion in Zoom Meetings subscriptions from class members, the plaintiffs’ lawyers called the $85 million settlement reasonable given the litigation risks. They intend to seek up to $21.25 million for legal fees.

Zoombombing is where outsiders hijack Zoom meetings and display pornography, use racist language or post other disturbing content.

Koh said Zoom was “mostly” immune for Zoombombing under Section 230 of the federal Communications Decency Act, which shields online platforms from liability over user content.

Zoom’s customer base has grown sixfold since the COVID-19 pandemic forced more people to work from home.

The company had 497,000 customers with more than 10 employees in April 2021, up from 81,900 in January 2020. It has said user growth could slow or decline as more people get vaccines and return to work or school in-person.

The case is In re: Zoom Video Communications Inc Privacy Litigation, U.S. District Court, Northern District of California, No. 20-02155.

Reporting by Jonathan Stempel in New York; Editing by Andrea Ricci

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Business

U.S. seeks to speed rooftop solar growth with instant permits

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Solar panels are seen on rooftops amid the coronavirus disease (COVID-19) outbreak, in Santa Clarita, near Los Angeles, California, U.S., June 18, 2020. REUTERS/Lucy Nicholson/File Photo

July 15 (Reuters) – The Biden administration on Thursday will roll out a tool that enables instant local permitting of rooftop solar installations, addressing a major source of industry delays and possibly lowering costs for homeowners, the Energy Department said.

The Solar Automated Permit Processing (SolarAPP+) platform, developed by DOE’s National Renewable Energy Laboratory, will be an optional portal for local governments to process permit applications automatically.

Approvals typically take a week or more currently, and permit-related costs can account for about a third of installers’ overall costs, DOE said. The software speeds the process up by standardizing requirements, streamlining the application and automating some approvals.

Administration officials said the software will help speed adoption of rooftop solar and achieve President Joe Biden’s goal of decarbonizing the U.S. electricity grid by 2035, a key pillar of his plan to address climate change. DOE has said that solar energy will need to be installed at a pace as much as five times faster than it is today to realize that goal.

“Having streamlined processes and an automated permitting platform that can make it faster, easier and cheaper for homeowners to go solar promises to really help expand the residential solar sector,” Becca Jones-Albertus, director of DOE’s solar energy technologies office, said in an interview.

Obtaining permits through local building departments has often proved to be a “pain point” for solar companies, according to Jones-Albertus. About a third of rooftop solar installations take more than two weeks for the permit process, DOE said.

SolarAPP+ was tested in four communities in Arizona and California starting last year. In Tucson, the portal reduced permitting review times from an average of 20 days to zero, the agency said.

An official from Stockton, California, a city that recently decided to adopt the SolarAPP tool, said it will free up staffers who have managed a 26% rise in solar applications over the last five years. It also allows homeowners to conduct the permitting process online rather than in person.

“It’s rare that you can find something that works this well for all of the parties involved,” John Alita, Stockton’s deputy city manager, said during a DOE webinar to unveil the tool.

The portal performs an automatic review of permit applications, approving eligible systems instantly. Complex or ineligible systems are re-routed for additional review.

Local governments will not have to pay for the portal, DOE said. DOE is challenging 125 mayors and local officials to sign up for the SolarAPP tool before the end of the summer.

Reporting by Nichola Groom; Editing by Dan Grebler and Cynthia Osterman

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