Apple has been accused of “unacceptable” and “monopolistic” behaviour with its App Store in a new collective lawsuit that seeks damages of up to £1.5bn for millions of users in the UK.
The UK Competition Appeal Tribunal (CAT) has received a case that alleges that Apple has abused its position by implementing restrictive policies within its App Store that force developers and users to pay more than they should.
Apple’s 30% commission fee for all sales within its App Store is an industry-wide standard, with rivals such as Google charging the same on digital platforms.
However, the group bringing the lawsuit is focused on Apple, alleging that its walled garden shuts out the competition and forces purchasers to use the company’s payment-processing system.
These restrictions helped Apple to generate £10.6bn in revenue from the App Store in 2020 even though it costs only around £71m to run and manage the platform.
The lawsuit claims that the current status quo is “completely unjustified” and now wants 20 million UK users who have bought apps, subscriptions and other services on iPhones and iPads during the last six years to be compensated.
King’s College London digital-economy lecturer Dr Rachael Kent is heading a team backed by law firms to take the case to CAT.
Dr Kent believes that the “exorbitant charges” on the App Store would not be possible if other platforms and payment systems were allowed on it.
Apple responded by stating that the lawsuit is “meritless” and that the App Store has been a key cog in the “UK’s innovation economy”.