Apple's App Store fees under fire in new $1bn class action in the UK

The icon and accompanying text of Apple and its App Store on a blue and back background

Apple is facing a massive $1 billion class action lawsuit brought by over 1,500 app developers in the UK over its App Store fees. The lawsuit, filed at the Competition Appeal Tribunal, accuses Apple of charging excessive fees to app developers and abusing its monopoly on app distribution to iPhones and iPads.

The lawsuit is being led by Professor Sean Ennis, an economist and competition law expert at the University of East Anglia. Ennis alleges that Apple's 15-30% commission on app sales and in-app purchases constitutes abusive pricing that harms app developers and users.

In a statement, Sean Ennis said:

Apple's charges to app developers are excessive, and only possible due to its monopoly on the distribution of apps onto iPhones and iPads. The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers.

Apple's services business, which includes App Store fees, has grown rapidly in recent years to around $20 billion per quarter. However, the 15-30% cut on in-app payments has drawn heavy criticism from many app makers. Regulators in the EU, UK and US are also investigating Apple over anti-competitive practices related to the App Store.

The lawsuit comes just a week after Spain's antitrust regulator fined Apple €150 million and Amazon €58 million for colluding to restrict sales of Apple products by third-party sellers. According to the regulator, the two companies unlawfully limited access to other Apple device retailers on Amazon's Spanish marketplace.

The UK lawsuit is the latest legal challenge faced by Apple over App Store policies. Last year, Epic Games sued Apple in the US for removing Fortnite from the App Store after Epic introduced its own in-app payment system. Apple is also facing class action lawsuits in the US over app developer commissions.

Also, in the last year, French app developers have sued Apple, stating that the tech giant violates US antitrust law. It cites the company's annual fees and "supracompetitive" 30% commissions.

Source: Reuters