Apple’s Developer Fees Face $995 Million UK Legal Challenge

Apple reportedly is facing litigation from British app developers over its App Store commissions.

The class action suit alleges that the commission Apple charges of up to 30% on App Store sales has harmed competition in the U.K. tech industry, Bloomberg News reported Tuesday (Dec. 3).

If the plaintiffs succeed, Apple could have to pay as many as 13,000 developers as much as $995 million in fees, said U.K. competition policy professor Sean Ennis, who is leading the suit.

PYMNTS has contacted Apple for comment but has not yet received a reply.

According to Bloomberg, Ennis argued in court filings that Apple charged commission fees to U.K.-based app developers who sold their apps through the App Store or made sales to iOS device users through subscriptions within their apps beginning July 25, 2017.

Judges from the U.K. Competition Appeal Tribunal opened the door for the class action suit after dismissing Apple’s attempt to block the case. Apple had argued that developers cannot have a claim against it in Great Britain unless they were charged fees on purchases made through its U.K. App Store.

Ennis announced the suit last year, arguing that Apple’s commissions are “excessive” and made possible due to the company’s monopoly on the distribution of apps onto its devices.

“The charges are unfair in their own right and constitute abusive pricing,” Ennis said at the time. “They harm app developers and also app buyers.”

Apple argued that 85% of the developers on its App Store don’t pay a commission and that the company is helping European developers access countries and customers around the world.

The class action suit is the latest example of Apple facing legal or regulatory pressure over its app-store fee policies. In January, the tech giant announced changes to the store designed to comply with European Union competition regulators. However, those changes are now being scrutinized over concerns that Apple’s new terms have made things worse for developers.

More recently, Brazil’s competition regulator ordered Apple to eliminate its restrictions on payment methods for in-app purchases.

Cade, the Brazilian watchdog, will also examine a complaint brought two years ago by Latin American eCommerce company MercadoLibre, which alleges that Apple has imposed restrictions on the distribution of digital goods and in-app purchases in Mexico and Brazil.