Apple Hit By £1.5bn Lawsuit Over App Store ‘Overcharging’

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In the midst of the ongoing legal dispute between Apple and Epic Games – centred around the former company’s stewardship and alleged anticompetitive dominance of the App Store – Apple has been sued again. This time it faces a £1.5bn class-action lawsuit in the Competition Appeal Tribunal in London.

The London lawsuit, Bloomberg reports, claims to represent all UK iPhone and iPad users who have made purchases from the App Store since 2015. It alleges that these users have paid more for their software than is reasonable.

Apple is accused of pushing up prices of iPhone and iPad apps by refusing to allow developers to charge using non-Apple payment solutions. Developers must give up either 15% or 30% of the sales price in fees to Apple – a cut the suit calls “excessive” and “unlawful” – which means they need to charge more in the first place to cover their costs.

“Apple is abusing its dominance in the app store market, which in turn impacts UK consumers,” said lead claimant Rachael Kent, echoing the complaints of numerous similar allegations over the past couple of years. “This is the behaviour of a monopolist and is unacceptable.”

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The group behind the lawsuit is seeking compensation for all those affected, and has estimated that the total payout could exceed £1.5bn, or roughly $2.1bn.

Apple, however, has called the suit “meritless” and argued that its fees are typical for the market.

“We believe this lawsuit is meritless,” the company said in a statement to Bloomberg, “and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the UK’s innovation economy.

“The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces. In fact, 84% of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15%.”

Apple has offered similarly robust statements in response to previous allegations of anticompetitive behaviour: in March it flat-out rejected the idea that it has a monopoly. But there are indications that the weight of the backlash has prompted a rethink at the company.

The launch of the 15% revenue tier for smaller developers, for example, and the opportunity for devs to appeal against App Store decisions are two significant recent changes that appear designed to deflect accusations of market dominance – the 15% tier, after all, is mentioned in the statement above.

So will Apple cede any more ground as the complaints mount up? It’s hard to say at this point, but our colleagues on Macworld US have discussed how much Apple will have to give up in a detailed analysis piece.





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