Apple loses landmark UK class action over app store fees
Apple has lost a landmark class action lawsuit in the United Kingdom over what were found to be excessive charges on app developers who distribute products through its App Store, a Kazinform News Agency correspondent reports.
The Competition Appeal Tribunal (CAT) ruled in Dr. Rachael Kent v. Apple Inc. and Apple Distribution International Ltd that the company abused its dominant position in the markets for iOS app distribution and in-app payment services. The judgment marks the first successful collective action under the UK’s Consumer Rights Act 2015.
The case was brought by Dr. Rachael Kent on behalf of about 36 million iPhone and iPad users. The tribunal concluded that Apple unfairly tied its in-app payment system to the App Store and charged developers commissions higher than a fair market rate. Apple’s standard commission on app sales and in-app purchases is 30%.
According to the ruling, developers were overcharged by the difference between the commission they paid and benchmark rates of 17.5% for app distribution and 10% for in-app payment services. The tribunal also determined that developers passed on roughly half of the excessive costs to consumers.
Dr. Kent is entitled to damages on behalf of class members, to be calculated on an aggregate basis, along with simple interest of 8%. Law firm Hausfeld & Co. LLP, representing the claimants, estimated that total compensation could reach about £1.5 billion.
Apple said it plans to appeal the decision.
Earlier, it was reported that Apple’s new iPhone 17 models were criticized for scratching too easily.