Apple Wants to Remove ‘Dominance’ from China App Antitrust Ruling

(Bloomberg) — Apple Inc. is trying to persuade a Chinese court to change a written ruling in a case the iPhone maker won, an unusual move that underscores the delicate position of the U.S. company in the world’s largest smartphone market.

Apple has filed a petition asking the Supreme People’s Court to make changes to select sentences in a ruling that ended a dispute over the share of app revenue collected from most developers, according to an excerpt from the filing seen by Bloomberg News. The iPhone maker wants the country’s top court to remove references to Apple’s “dominant position” from a ruling issued by a lower court that dismissed the lawsuit in May due to a lack of evidence. It also objects to language that suggests “unfair pricing can harm consumers.”

Apple is clearly trying to play down its market position in China, where it often trails Huawei Technologies Co. and other high-end smartphone makers at the top of quarterly shipment rankings. The characterization of Apple’s “dominance” — in the official court ruling — could be cited in future filings or cases as regulators around the world scrutinize the tech giants. At issue is the fee Apple and its rivals charge developers to host their apps on the store — as much as 50% for popular Android mobile games in China, compared with a general 30% in most of the rest of the world.

Apple’s unusual move to change the language of a decision that already favored it reflects its delicate position in China—both its largest international market and its largest manufacturing base. The company is grappling with a resurgent rival, Huawei, and uncertainty over a ban on foreign devices at many state-owned companies and agencies. Around the world, Apple and Google—which run the Android app store—have been forced to defend their app store policies with regulators in Europe and the U.S.

Apple has defended its fees on multiple fronts, including a lawsuit in the U.S. and through challenges in Europe, South Korea and Japan. The company has consistently argued that its fees are justified by the security and peace of mind the app store provides users while giving developers a global showcase.

In May, a Shanghai court dismissed a lawsuit over the practice, ruling there was insufficient evidence to show Apple had abused its status. The plaintiffs in the case accused Apple of abusing its market position, both through a 30% commission on in-app purchases and by restricting payment methods.

An Apple representative did not respond to requests for comment. The plaintiff — surnamed Jin — filed a separate appeal arguing that Apple charges a higher fee in China than in Europe and the U.S. and that the iPhone maker is restricting transactions with its policies.

The ruling comes amid moves by major Chinese developers and store operators to change the dynamics of the country’s app ecosystem.

In June, Tencent Holdings Ltd. made a surprise move to pull its hit game DnF Mobile from Android app stores operated by Chinese smartphone makers including Huawei and Oppo, citing unspecified “adjustments” in their partnerships. Tencent executives have long expressed frustration with the up to 50% cut those app platforms take from in-game purchases.

At the same time, Huawei is considering charging for in-app purchases on its Harmony mobile operating system, the first time the company will charge a fee as its smartphones take market share from Apple.

–With assistance from Jessica Sui.