Apple Targeted by $1 Billion Class Action Lawsuit Over App Store Fees
Apple found itself on the receiving end of a huge class action lawsuit on Tuesday. The legal challenge, launched by more than 1,500 UK app developers, concerns the company’s App Store fees and seeks damages of 785 million pounds ($1 billion USD), reports Reuters.
Apple’s services sector, inclusive of its App Store, has been a huge moneymaker in recent years. The division’s revenue has skyrocketed, reaching a whopping $20 billion per quarter.
Despite its financial success, Apple’s commission structure for its in-app payment system has come under fire. The tech giant levies fees of 15 to 30 percent on certain app makers, a practice that has stirred resentment within the developer community and caught the attention of antitrust regulators in multiple countries.
The company defended its policy, stating that 85% of App Store developers are exempt from any commission. Furthermore, Apple argues that it provides a crucial service to European developers by offering them a gateway to reach markets and customers in 175 countries globally via the App Store.
However, these defences have not deterred the UK lawsuit, currently at the Competition Appeal Tribunal. Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia and a former economist at the OECD, is leading the legal charge on behalf of 1,566 app developers. Law firm Geradin Partners is offering their expert legal counsel to Ennis.
In a public statement, Ennis declared, “Apple’s charges to app developers are excessive, and only possible due to its monopoly on the distribution of apps onto iPhones and iPads.”
Ennis went on to criticize the fairness of the charges: “The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers.”
Another day, and another developer lawsuit against Apple. Last year, developers in France also targeted the company, led by high-profile lawyers that had previously been successful in lawsuits against the iPhone maker.