Apple is set to appear in court in the United Kingdom in response to allegations that it imposes excessive fees on app developers. The lawsuit seeks an impressive 1.5 billion pounds in damages. The proceedings will commence today in the Competition Appeal Tribunal.
The complaint, lodged in May 2021, accuses Apple of violating European and UK competition laws by preventing alternative app stores from operating on iOS devices such as iPhones and iPads.
It is asserted that around 20 million Apple users have been overcharged due to the company’s prohibition of competing app store platforms. The class action lawsuit contends that Apple operates its App Store as a monopoly, compelling app developers to pay up to 30% commissions on transactions conducted through the store. The plaintiffs argue that the developers ultimately transfer these expenses to consumers.
Rachael Kent, a King’s College London lecturer, leads the class action, with legal representation from Hausfeld and barristers Mark Hoskins KC and Tim Ward KC.
Apple has characterized the lawsuit as meritless, stating that the commissions charged by the App Store are consistent with those of other digital marketplaces. The company noted that most apps are free and that the vast majority of developers qualify for a reduced commission rate of 15%, a provision established in 2020 for small businesses whose apps generate less than 1 million U.S. dollars annually.
Apple is anticipated to argue that the claimants have overly restricted the market definition to encompass iOS apps solely and that it does not hold a dominant position in the broader markets for digital transactions and devices.
As seen in previous disputes with Epic Games and the music app Spotify regarding its App Store policies, Apple is likely to assert that its commission is warranted by the extensive investments it makes in its platform, which include payment processing, developer tools, security assessments, marketing, and customer support.
The trial is anticipated to last seven weeks, during which Apple’s newly appointed CFO, Kevan Parekh, is scheduled to testify.
