Apple slammed with $1 billion class action lawsuit in UK over 30% App Store fee
Wesley HilliardApple Park
A new class action lawsuit in the UK from over 1,500 developers calls Apple's App Store fee excessive and a result of the company's app distribution monopoly.
Apple charges developers up to a 30% commission on transactions made on its platform. This fee has been long-scrutinized by world governments and developers alike, but so far has survived such scrutiny.
The latest attack on App Store fees comes from a group of 1,566 app developer in the UK. According to a report from Reuters, the group has started a class action lawsuit against Apple on the basis that the fee is excessive and a result of Apple's monopoly on its app distribution platform.
"Apple's charges to app developers are excessive, and only possible due to its monopoly on the distribution of apps onto iPhones and iPads," Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia and a former economist at the OECD, said in a statement. "The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers."
Ennis is bringing the class action lawsuit forward to the UK Competition Appeal Tribunal. He is being advised by the law firm Geradin Partners.
App Store fees have always been a point of contention
Apple discussed its 30% fee during the Epic Games trial. It has also said previously that 85% of developers on the App Store do not pay a commission and that it helps European developers access markets and customers in 175 countries through the App Store.
Multiple organizations and governments around the world have fought Apple's fee structure. Currently, with few exceptions, a developer owes Apple 30% of any transaction that occurs on its platform and this is reduced to 15% for subscriptions that last over one year.
The Small Business Program also ensures developers that earn less than $1 million in a year is only charged a 15% fee. The 30% fee kicks in once a developer crosses the $1 million threshold in a given year.
Companies have even taken up the battle, like Facebook stating that Apple's 30% fee hurts small businesses. Also, cutouts that seemingly help multi-billion dollar corporations increasingly become points of contention.
Apple previously lost a $100 million lawsuit in 2022 that originated in 2019, alleging the $100 developer fee and $0.99 increments hurt developers. The $100 fee is no longer a requirement, as there is a free developer account tier, and the $0.99 tiers were changed out for more granular prices.
This proves that Apple isn't immune to the influence of greater courts. However, a class action lawsuit doesn't always guarantee rule changes.
Apple provided a statement to AppleInsider that covers many of the points we made above about the Small Business Program, developer fees, and more. The company asserts that it has never increased fees in the fifteen years of the App Store but has, in fact, reduced fees and added exemptions.
The statement shared that Apple has created 440,000 UK jobs, and UK developers have generated $49 billion in earnings in 2022.
Update July 25: Added information about a statement from Apple.
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33 Comments
Time to start piloting the new program of charging all developers for the use of the API based on number of apps distributed. I'm sure that those 1500 developers will find that a much more fair way of charging for the use of Apple's intellectual property.
These oppressed people purchased and downloaded the application development kit knowing when they deploy they are going to be charged a fee for doing so. The decision was a part of their business plan whether they knew it or not. No different from the people forming a class action lawsuit against their government for collecting taxes. You know you owe taxes just after you are hired and have to give them your SSN for them to start sending payroll tax. You knew up front so why did you go to work?
I have had it with a nation and world of freeloaders wanting everything for free expect for the fees they charge for their products (in this case apps).
Apple could probably block UK apps and no one would miss them though there probably are one or two that are useful :smile:
I know this has been discussed in depth, but isn’t 30% the same rate that Google, and Microsoft charged originally? Isn’t it also LESS than the console manufacturers charge their developers?
Feels like it’s become fashionable to sue Apple and other large companies just because they are successful.
No one is forcing anyone to develop apps
for the App Store, and the rate hasn’t increased, in fact it’s DECREASED if you earn less than $1M as I recall.
Coming up next:
• Class action lawsuit by renters against landlords who charge rent for apartments
• Class action lawsuit by lease holders against banks who charge for driving the bank’s car
• Class action lawsuit against supermarkets for charging a stocking fee to sell goods in their storesWhat a bonkers world we live in where people expect to profit off of others intellectual property at whatever rate they feel like paying.
Perhaps the time has come for Apple to allow some form of side loading with the understanding that it limits Apple’s liability for any damages suffered by those who choose that avenue. I wish it would be possible for that Avenue to be one-way. That if you distribute your app outside the App Store that you can’t also distribute within it. In the long run, most users will continue to take advantage of the convenience and security of the App Store. Developers will lose in volume whatever they save in fees.