Apple Faces $1 Bn Class Action Lawsuit By UK App Developers Over App Store Fees

Apple has become the target of a substantial GBP 785 million (USD 1 billion) class action lawsuit in the United Kingdom. The lawsuit has been brought forth by over 1,500 app developers who are expressing grievances over the company's App Store fees.

Apple's services business, especially the App Store, has witnessed remarkable revenue growth in recent years, with earnings reaching approximately USD 20 billion per quarter. However, the controversy arises from the 15 per cent to 30 per cent commissions charged to certain app makers for utilising the in-app payment system, which has drawn sharp criticism from developers and caught the attention of antitrust regulators in various countries.

According to Apple's defense, 85 per cent of developers currently operating on the App Store are exempt from any commission charges, and the platform plays a crucial role in enabling European developers to reach markets and customers across a staggering 175 countries.

The legal action, which has found its way to the Competition Appeal Tribunal in the UK, is spearheaded by Sean Ennis, a reputable professor at the Centre for Competition Policy at the University of East Anglia and a former economist at the OECD. Ennis is representing a collective of 1,566 app developers in this endeavor, with legal counsel provided by Geradin Partners, a renowned law firm.

In a statement issued by Ennis, he asserts that Apple's charges to app developers are excessive, attributing their feasibility solely to the company's monopoly on app distribution for iPhones and iPads. He further claims that such charges are intrinsically unfair, amounting to abusive pricing, ultimately harming not just the app developers but also impacting the end-users who purchase these applications.

(Inputs from Reuters)