Apple's ban on cloud gaming services sparks public outrage, accused of stifling competition

The complaint, filed in the U.S. District Court for the Northern District of California, alleges that Apple engaged in "unlawful competition" through "persistent, pervasive and secretive" misconduct.

The plaintiff in the lawsuit, New Jersey man John Pistacchio, claims that he is paying "exorbitant prices" for Apple's cloud gaming subscription service Apple Arcade due to Apple's alleged anti-competitive behavior.

More specifically, the lawsuit suggests that Apple has imposed monopoly power on its own App Store on iOS by requiring developers to follow its app guidelines and prohibiting third-party app stores. Developers and app publishers who refuse to release apps on iOS are "powerless to constrain" Apple's behavior, the complaint says.

"No developer or group of developers has sufficient power to attract enough iOS users away from iOS so that developing apps for other platforms would not be profitable," the complaint reads. The complaint implies that companies like Microsoft, Facebook, and Google fall into this category. The complaint goes on to claim that Apple has exhibited anti-competitive behavior to maintain its monopoly in iOS subscription gaming services.

The alleged anti-competitive practices include imposing technical restrictions to prevent users from using services other than Apple Arcade; imposing contractual restrictions on developers; abusing its app review guidelines to protect its monopoly; and rejecting cloud-based subscription platforms.

The complaint lists several examples of alleged anti-competitive behavior, such as Apple's ban on cloud gaming apps such as Xbox Game Pass and unfair treatment of gaming services such as Facebook Gaming. In addition, the lawsuit suggests that Apple blocks competitor gaming services not because they violate its app review guidelines, but because they are competitors to Apple Arcade.

The complaint reads: "Apple has repeatedly abused its monopoly power to prevent other similar services from competing with its Apple Arcade, leveraging its dual role as gatekeeper and market player. Apple's anticompetitive behavior has hindered competition in the iOS subscription mobile game market, affected a large number of businesses in that market, and caused anticompetitive harm to consumers."

The lawsuit requests a jury trial and seeks compensatory and punitive damages, injunctive relief against the plaintiffs, statutory interest and penalties, and legal fees from Apple. It also asks the court to establish a "constructive trust to which Apple's ill-gotten gains will be returned and from which the plaintiffs may recover damages."

In addition to this class action lawsuit, even Philip Shoemaker, a former Apple App Store executive, admitted during questioning that Apple rejected other cloud gaming subscription services because they competed with Apple Arcade. Apple uses its App Store to protect Apple's interests.

When asked whether Apple really treats all developers equally as it claims, Shoemaker said: "Apple is not being honest." He called the App Store's rules both "arbitrary" and "controversial." "Apple has been working hard to build the App Store into a weapon against competitors. Apple has complete and unprecedented power over their customers' devices, and no one can shake their decisions about third-party apps."

Shoemaker, who served as a senior director of Apple's App Store review team from March 2009 to April 2016, had nothing to do with the Apple Arcade decision or the recent rule changes regarding game streaming services. He said Apple's claims that it doesn't favor its own apps are lies. If submitted by a third party, Apple Arcade would be an app that "would have been banned from the store all along," he said.