Swiss privacy tech company Proton takes on Apple’s $3 trillion empire with a federal antitrust lawsuit that could upend the iPhone maker’s stranglehold on app distribution and payments.
Key Takeaways
- Proton has filed a class-action lawsuit in California against Apple, alleging anticompetitive practices in the App Store ecosystem.
- The lawsuit claims Apple maintains an unlawful monopoly over app distribution and payment processing, charging excessive commissions of up to 30%.
- Proton seeks court orders forcing Apple to allow competing app stores and payment processors on iOS devices.
- The company has pledged to donate any monetary damages to democracy and human rights groups through its nonprofit foundation.
- This case joins other global legal challenges against Apple’s App Store policies from the U.S. Justice Department and European regulators.
David vs. Goliath: Privacy Champion Challenges Apple’s App Store Monopoly
Proton, the Swiss privacy technology company behind secure services like Proton Mail and Proton VPN, has launched a significant legal battle against Apple by filing a federal antitrust lawsuit in the Northern District of California. The 73-page complaint details what Proton describes as systematic anticompetitive practices designed to maintain Apple’s iron grip on the iOS ecosystem. At the heart of the lawsuit is Apple’s requirement that all iPhone apps must be distributed exclusively through its App Store, where the tech giant imposes mandatory payment processing fees that can reach up to 30% of developers’ revenue.
The lawsuit specifically targets three areas where Proton alleges Apple has established unlawful monopolies: the smartphone market, app distribution, and app payment processing. By designing iOS to only allow app distribution through its official App Store, Proton argues that Apple has created a closed system that locks in both consumers and developers. This walled garden approach prevents competition from alternative app stores and payment processors, resulting in artificially inflated prices for consumers and stifling innovation across the digital marketplace.
“Proton’s 73-page complaint outlines what it calls a systematic strategy by Apple to lock in consumers and developers,” stated Proton
Excessive Fees and Selective Rule Enforcement
Proton’s legal challenge characterizes Apple’s App Store fees as arbitrary tariffs on internet commerce rather than necessary business expenses. The lawsuit references evidence from the Epic Games v. Apple case, which questioned the legitimacy of Apple’s fee structure. According to Proton, Apple maintains its control through a combination of technical limitations, contractual restrictions, and system updates that effectively block competing app stores and payment processors. The company also points out that Apple applies different rules to different markets, allowing looser regulations on macOS and in certain cases, like WeChat mini-programs in China.
“The lawsuit notes that Apple itself permits looser rules on macOS and in limited cases, such as the WeChat mini-programs in China,” stated Proton
Particularly troubling are Apple’s restrictive payment policies that forbid developers from even informing customers about potential discounts available on their websites. Developers who refuse to comply with Apple’s payment system face the threat of having their apps removed from the store entirely. This heavy-handed approach creates an uneven playing field, especially when comparing how Apple treats its services versus those offered by third-party developers. These disparities include restrictions on setting default apps and limitations on background processing that Apple’s applications don’t face.
Broader Implications for Free Markets and Democracy
Proton’s lawsuit goes beyond mere financial complaints, arguing that Apple’s monopolistic practices have far-reaching consequences for society. The company claims Apple’s App Store rules favor surveillance capitalism and enable censorship in authoritarian markets, making it easier for repressive governments to control information access. Proton CEO Andy Yen has been outspoken about these broader implications, suggesting that the concentration of power in Big Tech monopolies threatens fundamental principles of free markets and democratic governance.
“Apple’s monopoly control of software distribution on iOS devices presents a myriad of problems for consumers, businesses, and society as a whole. Anti-monopoly laws exist because the power gifted by monopoly status inevitably leads to abuse. In the case of oligarchic tech giants, these abuses have wide implications for society, and it’s vital to the future of the internet that they be addressed now,” stated Proton CEO Andy Yen
This case joins a growing chorus of legal challenges to Apple’s App Store dominance worldwide. The U.S. Justice Department has its antitrust investigation underway, while European regulators have already taken steps to force Apple to open its ecosystem. The lawsuit seeks both an injunction to open iOS to competing app stores and payment services, as well as monetary damages for excessive commissions and competitive harm. In a noteworthy move that underscores Proton’s stated principles, the company has pledged to donate any monetary damages it receives to democracy and human rights groups through its nonprofit Proton Foundation.
