Apple asks UK to dismiss $1 billion App Store class action suit
William GallagherStore front at Apple Battersea, where Apple's UK headquarters is
A UK tribunal is considering a bid by Apple to have a $1 billion lawsuit over App Store fees be dismissed on the grounds that the case's argument is "unsustainable."
In July 2023, a class action suit was brought against Apple on behalf of 1,566 UK-based developers. It argued that Apple is abusing its monopoly position, and charging excessive fees.
According to Reuters, the UK's Competition Appeal Tribunal (CAT) has now heard from Apple's lawyers. They contend that the case's argument is "unsustainable," because 85% of developers on its App Store do not pay any commission fees at all.
Further, Apple's lawyer Daniel Piccinin argues that developers cannot have a claim in the UK unless it were over purchases customers made in the UK's version of the App Store. Piccinin says that would only apply to a small minority of the case's claimants.
However, the claimants' lawyer Paul Stanley, has reportedly said in court filings that Apple "has come to the UK to offer services to UK businesses on a UK market and has abused its position by overcharging them."
The lawsuit was brought by Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia and a former economist at the Organisation for Economic Co-operation and Development (OECD.) Previously he has said that "Apple's charges to app developers are excessive, and only possible due to its monopoly on the distribution of apps onto iPhone and iPad."
"The charges are unfair in their own right, and constitute abusive pricing," he continued when the lawsuit was filed. "They harm app developers and also app buyers."
At the time of the original filing, an Apple spokesperson told AppleInsider that the company has never increased fees in the (then) 15 years of the App Store. That point is disingenuous since the fee is a percentage of app costs which have risen, though.
Apple did further say that it has added exemptions and overall reduced fees for developers. The company also called out how it had created jobs in the UK, the most recent figures for which now say Apple supports over half a million workers in the country.
The case is not expected to come to trial until 2025.
Mike Wuerthele
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4 Comments
Sometimes I wonder, deep down, if all these actions (coordinated?) against Apple around the world is a price Apple is paying for their unwillingness to create backdoors in their ever-hardening encryption technologies (that would benefit those very entities that are hammering on them)
Because in reality, the world-wide user base is not complaining a lick about Apple's walled-garden ecosystem, single App Store, etc, and in fact, are highly attracted to it - so the foundation of this actions against Apple and other companies seem more indirectly punitive than "real".
It's a handful of developers who don't want to pay fees for accessing the immense user base Apple has spent enormous resources developing (in a non-monopolistic model). There a countless analogies here, but broadly, imagine the owner of a shopping mall being forced to allow third-party merchants into their space to set up retail businesses without paying the mall owners anything? It is ludicrous on every level.
A non-utility or non-non-monopolisitc company can charge whatever they want, period. Their customers and their partners will regulate if those fees are reasonable or outrageous. If they are guilty of true anti-trust (for example, coercing suppliers/vendors to not deal with competitors to gain an unfair advantage), then investigate an go after that. But to dismantle a product/service in a market where you do NOT have to use that product is patently absurd.
Even at 30% commission, that is not being overcharged when one is placing their products in a store, that is on 2B Apple devices worldwide. And it doesn't matter to Apple, where the developers (that are making money with their apps in the Apple App Store), are located around the World.
If the author is referencing the 15 or 30% fees, then Apple was correct and not "disingenuous". After all they are talking about a specific fee, not total revenues that may include other costs and fees.
I think this may have an easy solution. Apple will lower their fees for app sales, but can put a price on all other things - infrastructure, hosting the app, sometimes promoting it. Make it transparent to the developers and make things like - you pay 5-10% fee from sales/subscriptions, plus this and this and this. Or you pay 30/15% and you have all these fees included…