Apple is facing a substantial class action lawsuit in the UK, with more than 1,500 app developers coming together to claim £785 million (roughly $1 billion) over its App Store fees. While Apple's services business, including the App Store, has experienced remarkable revenue growth, reaching around $20 billion per quarter, it has also drawn criticism and regulatory scrutiny due to the commissions it charges app makers. These fees, ranging from 15 per cent to 30 per cent for using the in-app payment system, have been a point of contention for app developers and antitrust regulators in various countries.
In response to the criticism, Apple has defended its position, stating that 85 per cent of developers on the App Store are exempt from paying any commission. The company also asserts that the platform helps European developers reach global markets and customers across 175 countries.
The lawsuit, filed at the Competition Appeal Tribunal in the UK, is led by Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia and a former economist at the OECD. He is representing 1,566 app developers in this legal action, with legal support from Geradin Partners.
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Ennis claims that Apple's charges to app developers are excessive, attributing this to the company's monopoly on app distribution for iPhones and iPads. He argues that these charges are unfair and constitute abusive pricing, causing harm to both app developers and consumers who buy the apps.
The lawsuit marks a significant legal challenge for Apple, as it faces allegations of anticompetitive practices and excessive fees imposed on app developers. The outcome of this class action lawsuit could have implications not only for Apple but also for the wider tech industry, shedding light on the contentious issue of app store fees and developer compensation.