In the UK, Apple is facing a class action lawsuit totaling £785 million (equivalent to $1 billion) initiated by over 1,500 apps developers. The legal action is centered around the fees charged by Apple’s App Store. While Apple’s services business, including the App Store, has experienced substantial revenue growth, with earnings reaching approximately $20 billion per quarter, the issue lies in the commissions imposed on certain app makers, ranging from 15% to 30%, for utilizing the in-app payment system.
Criticism from app developers and scrutiny from antitrust regulators in various countries have been directed at these fees. Apple has stated that 85% of developers on the App Store do not pay any commission, and it emphasizes that the platform helps European developers gain access to markets and customers in 175 countries worldwide.
The Competition Appeal Tribunal in the UK is overseeing the lawsuit, filed by Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia and a former economist at the OECD, who represents 1,566 app developers. The legal counsel for Ennis is the law firm Geradin Partners.
Ennis contends that Apple’s charges to app developers are excessive, primarily due to its monopoly over app distribution on iPhones and iPads. He asserts that these charges constitute unfair and abusive pricing, harming both app developers and app buyers.