Apple is currently embroiled in a $1 billion lawsuit representing British developers and is now facing an even more substantial lawsuit filed on behalf of app purchasers in the UK.
Both antitrust lawsuits share a common foundation; they allege that Apple is exploiting its monopolistic hold over iPhone app sales to impose excessive commissions.
$1B Developer Lawsuit
The developer-focused lawsuit, amounting to a billion dollars, was initiated in the summer of 2023. Apple attempted to have the case dismissed twice, but both motions were denied.
The principal argument is that, until recently, developers could only sell their iPhone apps and in-app content via the official App Store. This situation granted Apple monopolistic control over the distribution of iOS applications, enabling the company to dictate commission rates that developers had no choice but to accept.
Changes have occurred to some extent in both the EU and the US but not yet in the UK. Apple initially contended that a British court lacked jurisdiction since many UK apps were being sold in the US and other markets, but judges dismissed this argument as the adverse effects were felt within the UK. A subsequent attempt to dismiss the case also failed last month.
$1.8B Consumer Lawsuit
The Guardian reports that Apple now faces a second lawsuit, claiming that consumers have been overcharged because developers need to compensate for Apple’s exorbitant commissions.
Apple will be appearing in court on Monday, accused of overcharging UK customers via its App Store. The claim is brought forth by Dr. Rachael Kent, an academic from King’s College London, representing herself and approximately 19.6 million other iPhone and iPad users in the UK.
Kent stated: “Apple has no authority to charge us a 30% fee on what we pay for on our phones, especially considering Apple itself restricts our access to platforms and developers that could provide us with far better offers. This is the reason I am pursuing this action.”
Apple refutes the allegations, maintaining that its commission rates reflect industry standards and that smaller developers actually pay even lower rates.
“The commission rates on the App Store are very much aligned with those charged by other digital marketplaces. In fact, 85% of the apps on the App Store are free, and developers incur no charges from Apple. Furthermore, for the vast majority of developers who do pay a commission for selling digital goods or services, they qualify for a reduced rate of 15%.”
The trial commenced this morning and is anticipated to span seven weeks.
Photo of Battersea Power Station, home to Apple’s UK headquarters: Laurence Mackman/CC4.0
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