A PYMNTS Company

Apple Seeks Dismissal of $1 Billion Lawsuit in the UK Regarding App Store Fees

 |  January 23, 2024

Apple Inc. is under scrutiny as it seeks to dismiss a mass lawsuit valued at around $1 billion brought against the tech giant by more than 1,500 app developers. The case, which alleges unfair App Store fees, is one of several legal challenges faced by Apple in the United Kingdom.

The lawsuit, with a potential worth of up to 785 million pounds ($998 million), was filed last year at the Competition Appeal Tribunal (CAT) by Sean Ennis, a competition law professor and former economist at the OECD. Ennis contends that Apple charged third-party developers commissions as high as 30% on app and content purchases, claiming that the tech giant abused its dominant position in the market for app distribution on its devices.

Ennis’ legal team argues that Apple has overcharged UK-based developers and is seeking substantial damages. The case has become a focal point in the ongoing debate over the fairness of Apple’s commission structure, particularly in relation to its dominant role in the app ecosystem.

Read more: Apple to Challenge EU’s Digital Markets Act, Contests App Store Inclusion

Apple, however, is vehemently contesting the allegations, asserting that 85% of developers on its App Store do not pay any commission at all. The company is urging the CAT to dismiss the case, labeling it “unsustainable.” Apple’s lawyer, Daniel Piccinin, emphasized that developers cannot have a valid claim in the UK unless they were charged on purchases made through the UK App Store. According to Apple’s argument, this would only apply to a very small minority of the claimants.

Paul Stanley, representing Ennis, countered Apple’s stance in court filings, stating that “Apple has come to the UK to offer services to UK businesses on a UK market and has abused its position by overcharging them.” He contends that UK law should apply to the entire case, allowing it to proceed.

This legal battle is not the only one Apple is currently facing in the UK. Another mass lawsuit over App Store commissions, brought on behalf of approximately 20 million UK users, was given the go-ahead in 2022 and is adding to the tech giant’s legal challenges.

Source: Reuters