Apple faces $1 billion UK antitrust lawsuit over App Store fees

Image Source: Apple

On behalf of more than 1,500 app developers in the UK, a 785 million pound ($1 billion) class action lawsuit is being brought against Apple over its App Store fees.

The company is accused of abuse of power by imposing an “anti-competitive” 30% fee on in-app purchases made by app developers through the App Store, according to the lawsuit, which seeks damages totaling up to £800m (more than $1bn).

According to prior statements made by Apple, 85% of App Store developers do not charge any commission fees, and the App Store enables European developers to reach markets and customers in 175 different countries.

1566 UK-based developers are the plaintiffs in the class action, which is being brought by Sean Ennis, a professor of competition policy at the University of East Anglia who has worked for the OECD, U.S. Department of Justice, and European Commission.

The case is an opt-out class action, meaning that UK-based developers do not need to sign up to be included in any potential winnings. 

Geradin Partners is the law firm supporting Ennis in the lawsuit. 

“I have been studying competition questions for decades — and digital competition for quite a long time. I’ve written about it in technical economic papers but also in less technical work. And I’m really convinced that the type of behaviour we’re talking about in this case is deeply problematic. So I was interested in taking a role to help get some redress for those who I feel have been harmed by the behaviour,” Ennis said to TechCrunch.

“Apple’s charges to app developers are excessive, and only possible due to its monopoly on the distribution of apps onto iPhones and iPads,” Ennis said in a statement. “The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers.”

Since the launch of the App Store in 2008, Apple has paid out $320 billion to app developers, according to an update released at the beginning of the year. Revenues for Apple’s services division, which also includes the App Store, have increased rapidly over the past few years and are currently roughly $20 billion every quarter.

Written by Maya Robertson


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