Tuesday 11 May 2021 6:00 am

Apple hit with £1.5bn UK lawsuit over ‘excessive’ app store charges

Apple is being sued for £1.5bn in a landmark UK class action lawsuit that accuses the tech giant of charging “excessive and unlawful” fees on its App Store.

The claim, which has been filed in the Competition Appeal Tribunal in London, alleges that Apple deliberately shuts out competition by forcing consumers to use its own payment processing system.

The iPhone maker typically charges a 30 per cent commission on purchases made on the app store. It takes a further fee from developers for many in-app purchases.

The suit claims this practice enables Apple to generate “unlawfully excessive levels of profit”.

Apple described the lawsuit as “meritless” and said it “welcomes the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the UK’s innovation economy”.

“The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces,” a spokesperson said. “In fact, 84 per cent of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15 per cent.”

It is the latest attack on the Silicon Valley tech giant over its app store after the EU last month filed antitrust charges against the company following a complaint by Spotify.

The UK competition watchdog has also launched a probe into the issue and Apple is currently locked in a legal battle with Fortnite maker Epic Games.

But the class action lawsuit is focused on the impact on consumers rather than developers. It is a representative opt-out suit, meaning it has been brought on behalf of potential claimants without the need for them to actively sign up.

An estimated 19.6m UK users are eligible for the claim, which is seeking total damages of up to £1.5bn.

“The App Store was a brilliant gateway for a range of interesting and innovative services that millions of us find useful, myself included. But thirteen years after its launch, it has become the only gateway for millions of consumers,” said Dr Rachael Kent, a lecturer at King’s College London and the class representative for the action.

“Apple guards access to the world of apps jealously, and charges entry and usage fees that are completely unjustified. This is the behaviour of a monopolist and is unacceptable.”

The legal claim applies to most popular apps on iPhones and iPads — such as Fortnite, Youtube and Tinder — that require payment at the point of download, subscription payments, or allow for in-app purchases.

It does not apply to apps that provide physical goods or services consumed outside the app, such as Deliveroo and Uber. These are not required to use Apple’s payment system or pay commission.