Epic Games isn’t the only company suing Apple over the terms of doing business on the App Store as Apple now faces a potentially costly class-action lawsuit over the App Store fees.
- Apple is being sued in the UK over Apple’s fees on the App Store.
- If successful, the lawsuit could cost Apple $2 billion in compensation.
- Apple is accused of guarding access to “the world of apps jealously.”
$2 billion UK class action over App Store commissions
Filed with London’s Competition Appeal Tribunal, the lawsuit targets Apple’s App Store commission rates. Apple takes 30 percent of all revenue developers by selling apps and subscriptions through the App Store, moving to 15 percent after a subscriber’s second year.
According to legal documents, claimants allege that this commission results in higher prices for consumers who purchase paid apps and subscriptions. As per reports by the BBC News and the News and Star, claimants are saying that Apple has overcharged approximately 20 million customers who bought apps and subscriptions from the UK App Store.
I am leading this collective action against @apple on behalf of 19.6 million UK #consumers alleging they have breached #competitionlaw and #overcharged for #app purchases in their #AppStore @BBCNews #drdigitalhealthhttps://t.co/CZ1cLatTdH
— Rachael Kent (@DrDigi_Health) May 11, 2021
Dr. Rachel Kent, a digital economy specialist and lecturer at King’s College who is leading the collective action, was quoted as saying the following in a statement:
Apple guards access to the world of apps jealously, and charges entry and usage fees that are completely unjustified. This is the behavior of a monopolist and is unacceptable. Ordinary people’s use of apps is growing all the time and the last year, in particular, has increased our dependence on this technology.
Apple has no right to charge us a 30 percent rent for so much of what we pay for on our phones—particularly when Apple itself is blocking our access to platforms and developers that are able to offer us much better deals.
The class-action lawsuit could result in damages of up to 1.5 billion pounds, which works out to about $2 billion. This compensation would be unavailable for those UK customers who did not buy paid apps, subscriptions or in-app purchases on an iPhone or iPad since October 2015.
And what’s Apple’s response?
Apple in a statement called the legal complaint “meritless.“
We believe this lawsuit is meritless and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the UK’s innovation economy. The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces.
This has been Apple’s argument from the onset.
In fact, 84 percent of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15 percent.
Over in the US, Apple is embroiled in a major legal case brought by Epic Games.
The Fortnite maker is alleging Apple engages in anti-competitive practices by not allowing other app stores on the iPhone and leveraging the App Store commission to stifle competition.