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Apple Accused of Charging Excessive Fees in New UK App Store Suit

 |  July 25, 2023

Apple has become the target of yet another lawsuit this time by over 1,500 app developers in the United Kingdom. The lawsuit, worth £785 million ($1 billion) has been brought forward in the Competition Appeal Tribunal and accuses Apple of charging an exploitative 15-30% commission for in-app sales in the App Store.

According to Reuters, Apple’s monopoly gives it the leverage to charge higher than market rate fees for app sales, making it difficult for developers and UK consumers.

Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia and former economist at the Organisation for Economic Co-operation and Development, claims that Apple’s charges are “excessive,” only possible due to its monopoly on the distribution of apps onto iPhones and iPads. He further states, “The charges are unfair in their own right and constitute abusive pricing. They harm app developers and also app buyers.”

This lawsuit is yet another in a series of antitrust complaints targeting Apple’s ‌App Store‌ policies. The European Commission, France, South Korea, Germany, the Netherlands, and other countries have already launched investigations into complaints about the ‌App Store‌ and its terms and conditions. In March 2021, the UK’s Competition and Markets Authority also opened an investigation to probe Apple’s app store terms and conditions.

Related: Apple Battles Subpoenas In US Court Against Qualcomm

Apple, however, counters these arguments by claiming that 85% of developers in the App Store do not pay any commission and that they’re helping European developers gain access to countries and customers in 175 nations around the world.

The lawsuit also states that the high commission charges prevent money being used for research and development, which could then have been used to spur innovation in the app market. Some analysts and tech experts expect the lawsuit to put a further strain on Apple’s business as it could limit revenues.

The lawsuit could also provide some respite to antitrust legislators as they prepare the groundwork for new laws and regulations to govern tech companies with monopolies.

This news has had mixed reactions amongst the app developers’ community, with many cheering the move to curb Apple’s power, but others expressing caution and wariness.

Ultimately, whether this lawsuit proves successful in challenging Apple or not, it has provided new insights into the debate over tech companies’ monopoly power, and is likely to further strengthen the calls to regulate the tech industry for a fairer and more open market.

Source: Reuters