A class action lawsuit against Apple has begun in the UK, accusing the US tech giant of abusing its dominant market position by charging developers on the App Store an unfair 30% commission—costs that are ultimately passed on to consumers. The lawsuit, filed with the UK Competition Appeal Tribunal (CAT) on behalf of approximately 20 million iPhone and iPad users, alleges that British consumers have been overcharged £1.5 billion due to inflated fees for apps.
As Reuters noted, this is the first class action of its kind against Apple in the UK under the country’s expanding class action regime, with more cases reportedly pending against other tech companies. Meanwhile, Apple has also been hit with a £785m class action lawsuit on behalf of more than 1,500 UK app developers over what they describe as “unfair commissions on app purchases and other content.”
British academic Rachael Kent, who initiated the class action that began on Monday, claims that “Apple is making disproportionate profits” by removing any competition for app distribution and in-app purchases. Her legal team contends that Apple’s dominant market position allows it to impose restrictive terms on developers, charging fees that they say are excessive and inevitably passed on to consumers.
Apple’s Response and Ongoing Developments
In response, Apple maintains that the lawsuit is without merit, claiming it overlooks the benefits provided to consumers by the iOS operating system’s holistic approach to privacy and security. Apple points out that 85% of developers pay no fees at all. Apple lawyer Marie Demetriou stated in court papers that the panel should consider “the enormous benefits that Apple’s innovations bring to the iOS ecosystem as a whole.” She also argued that Kent’s lawsuit disregards Apple’s intellectual property rights and amounts to “expropriation of property rights disguised as competition,” by suggesting that developers should be free to use Apple’s technology as they wish.
Apple has faced scrutiny from regulators in both the US and Europe regarding the fees charged to third-party developers, which has added to the legal and public pressure around this matter. Apple CFO Kevan Parekh is reportedly set to testify in the case later this week, and we’ll keep you updated as these proceedings continue to unfold.
Overall, the central debate revolves around whether Apple’s App Store policies constitute an abuse of market dominance and whether its commission structure is justifiable, concludes NIX Solutions. Both sides are likely to present more evidence in the coming weeks as the UK Competition Appeal Tribunal evaluates the merits of the case. Observers see this lawsuit as part of a broader wave of legal actions challenging major tech platforms’ revenue models and market influence.