On July 4th, a reporter from First Financial News learned from insiders that Apple has appealed to the Supreme People's Court after the first instance verdict of China's first anti-monopoly lawsuit initiated by consumers against the "Apple Tax" was announced.
In its appeal request, Apple hopes that the Supreme People's Court can modify some of the wording in the judgment, mainly including four points.
Firstly, Apple requests that the first instance judgment be revoked in accordance with the law, stating that the respondent (consumer who purchases within the application) may have suffered losses due to the unfair and high priced behavior being sued, and that they have the right to file a lawsuit for the alleged unfair and high priced commission charged by the appellant to the application developer. Secondly, revoke the determination that the plaintiff's claim for monopolistic behavior in this case requires the defendant Apple Company to assume corresponding responsibilities in accordance with legal provisions, and determine that Apple Company is not a qualified defendant in this case.
Thirdly, Apple requests the revocation of the determination in the first instance judgment that "the relevant commodity market in this case should be defined as a 'smart terminal application trading platform under the iOS system'" in accordance with the law, and to change the definition of the relevant commodity market in this case to include application transactions on all platforms, but not limited to application transactions on the Chinese Apple App Store. Fourthly, the determination in the first instance judgment that "Apple clearly has a dominant market position in the market" should be revoked in accordance with the law, and it should be determined that Apple does not have a dominant market position in the correctly defined relevant market.
In May of this year, the Shanghai Intellectual Property Court announced the first instance verdict of China's first consumer lawsuit against Apple for monopoly. The court found that Apple had a dominant market position in the Chinese software market, but did not abuse that position and rejected the plaintiff's lawsuit. The plaintiff in this case, Ms. Jin, accused Apple of abusing its market position by charging a 30% in app purchase commission and restricting payment methods.
However, from Apple's appeal request, it can be seen that the company still hopes that the Supreme Court will remove the mention of Apple's "dominant position" in the lower court judgment and oppose the wording implying "unfair pricing" in the judgment.
The reporter reviewed the relevant content in the first instance judgment, regarding Apple's third and fourth appeal requests, namely how to define the relevant market and whether the defendant Apple has a dominant market position. The Shanghai Intellectual Property Court stated that Apple is the main operator of the intelligent terminal application trading platform under the iOS system in regions other than Hong Kong, Macao, and Taiwan in the People's Republic of China. Although Apple International Distribution Company also participates in platform and consumer services, Apple and Apple International Distribution Company are affiliated companies, and other operators cannot enter the platform. Therefore, Apple obviously has a dominant market position in this market.
As for whether consumers have the right to sue for unfair and high priced behavior, the Shanghai Intellectual Property Court believes that, in terms of the plaintiff's claim of unfair and high priced behavior, although the defendant Apple is charging commissions to developers, if the plaintiff's claim of unfair and high priced behavior is successful, considering that platform commissions are also one of the costs for developers to operate applications, developers may adopt the method of increasing the selling price to consumers in order to transfer the high price borne by the platform, in order to maximize their interests. Therefore, the interests of consumers may be indirectly harmed by the platform's unfair and high priced behavior, and thus become the ultimate bearers of monopoly profits. Therefore, as a consumer, the plaintiff may suffer losses due to the unfair and high priced behavior being sued, and they have the right to file a lawsuit regarding this behavior.
In addition, regarding the issue of "qualified defendants" mentioned in Apple's appeal request, the Shanghai Intellectual Property Court believes that the services and content provided by Apple International Distribution Company in the Apple App Store, as well as the copyright of the Apple App Store, belong to the defendant Apple Company. Apple Company is also responsible for handling complaints arising from the operation of the platform. The defendant Apple Inc. participated in the operation and management of the Apple App Store, and the plaintiff filed a lawsuit against the defendant Apple Inc. for monopolistic behavior in this case, which requires the defendant Apple Inc. to bear corresponding responsibilities and complies with legal provisions.
An analysis suggests that Apple's unusual attempt to change the wording of an already favorable ruling reflects Apple's delicate position in China. China is not only the largest international market for apples, but also the largest production base for apples. As global regulatory agencies closely scrutinize tech giants, court rulings describing Apple's "dominant position" may be cited in future lawsuits or cases.
After the first instance verdict, Wang Qiongfei, the founding partner of Zhejiang Kenting Law Firm, represented by the plaintiff (Jin), told reporters that he will continue to appeal to the Supreme People's Court. The core of the appeal is still the issue of high apple tax rates and forced tying.