Apple Faces Legal Challenge in China Over App Store Practices

A Chinese court has agreed to hear a case filed by a local developer challenging Apples’s App Store practices, according to Bloomberg. This marks only the second time Apple has faced such scrutiny in China, a critical market for the company and the world’s largest mobile ecosystem.

The case was accepted by Beijing’s Intellectual Property Court following a complaint from Beijing Bodyreader Technology Ltd., developer of the Bodyreader app, which helps children correct their posture. Apple removed the app from its App Store in 2020, citing alleged “dishonest” behavior. The Chinese developer is now seeking damages of roughly 3 million yuan ($420,000) and is pushing back against what it claims are unfair monopolistic practices by Apple, per Bloomberg.

Beijing Bodyreader argues that Apple’s decision to remove its app was arbitrary, pointing out that an identical app submitted under a different name, Qilin Century, was later accepted by the App Store and remains available today. According to Bloomberg, the developer also criticized Apple’s strict policies that prevent third-party payment systems and require a 30% commission on in-app purchases. Bodyreader is asking the court to mandate that Apple permit third-party app stores and external payment links, moves that would significantly alter Apple’s tightly controlled mobile ecosystem.

The case highlights growing tensions between Chinese developers and the App Store’s policies, echoing broader global challenges Apple faces over its business practices. The company has faced similar accusations worldwide, notably in its legal battle with Fortnite creator Epic Games Inc. in 2021, which argued that Apple’s control over its App Store restricts competition and stifles innovation. According to Bloomberg, some analysts believe that this new lawsuit from Bodyreader could spark further scrutiny of Apple’s platform rules in China.

Closed-door hearings began on Thursday and are expected to conclude soon, a source familiar with the matter shared with Bloomberg. The lawsuit comes at a time when Apple is facing increasing competition in China’s premium smartphone market, especially from local brands like Huawei. The competitive landscape is tightening, with domestic companies gaining ground and regulatory pressures building against Apple’s influence both in China and globally.

Read more: EU Set to Fine Apple in First Major Enforcement of Digital Markets Act

Despite its success in China, Apple’s unique status as one of the few U.S. tech giants with a major footprint in the country puts it in a delicate position. According to Bloomberg, Apple has so far managed to navigate China’s regulatory environment effectively, balancing its commercial interests while adhering to local policies. However, this latest lawsuit underscores the challenges Apple faces as the Chinese government seeks to promote domestic companies while attracting foreign investment.

Earlier this year, Apple fended off an antitrust complaint brought by a Chinese consumer, but not without some legal complications. The company ultimately appealed the decision, attempting to remove references to its dominant market position, highlighting the sensitivity around Apple’s status in China’s mobile market.

For Apple, China remains crucial not only as a large consumer market but also as a production hub. However, it is beginning to diversify its manufacturing operations by expanding into other regions, including India. While the company’s footprint in China is extensive, its hold on the market has started to show signs of vulnerability, with Huawei and other local brands eroding its premium market share. Recently, Apple faced additional friction with Chinese tech giants ByteDance and Tencent over the use of alternative payment systems in Douyin and WeChat mini-programs.

This new legal action from Beijing Bodyreader could set an important precedent for other Chinese developers, signaling potential changes in how Apple conducts business in one of its most pivotal markets.

Source: Bloomberg