Apple faces setback as UK lawsuit over App Store fees proceeds

In a significant legal setback for tech giant Apple, on Friday, a judge ruled against the company’s attempt to dismiss a lawsuit valued at nearly $1 billion in the UK. The ruling mandates that Apple must address allegations of charging more than 1,500 UK-based developers unfair commission fees on purchases of apps and other content.

The lawsuit, spearheaded by competition law professor and economist Sean Ennis, was filed at London’s Competition Appeal Tribunal (CAT) last year. In January, Apple pushed for the dismissal of the lawsuit. 

Ennis and his legal team assert that Apple imposed unjust commissions of up to 30% on developers, alleging abuse of its dominant position in the market for app distribution on iPhones and other Apple devices.

Despite Apple’s claims that 85% of developers on its App Store do not pay any commission, the company has faced mounting scrutiny from regulators in both the U.S. and Europe over its fee structure for third-party developers. Recent developments in the European Union have compelled Apple to permit users to download apps from alternative sources, while legal battles, such as the one with Epic Games, have prompted revisions to its App Store policies in the U.S.

During a hearing in January, Apple’s lawyer Daniel Piccinin argued that developers could not pursue claims in the UK unless they were charged fees on purchases made specifically through the UK App Store. However, Judge Andrew Lenon rejected Apple’s bid to dismiss this aspect of the case, asserting that Ennis’ legal team had a realistic prospect of proving that Apple’s commission practices impacted UK-based developers.

Lenon’s written ruling emphasized the potential ramifications of Apple’s overcharging of commissions to UK developers, even in transactions conducted on non-UK storefronts. This decision underscores the significance of the case and sets the stage for further legal proceedings against the tech giant.

In addition to the lawsuit over App Store fees, Apple is also contending with a separate case concerning allegedly defective iPhone batteries, representing around 24 million iPhone users. Both cases, while certified last year, are not anticipated to proceed to trial until 2025, indicating prolonged legal battles ahead for the company.