UK trial over Apple's App Store fees seeks $1.83B fine

A four-year-old class action lawsuit filed in the UK again Apple's App Store fees will finally go to trial on Monday, January 13 — seeking up to 1.5 billion pounds ($1.83 billion) in potential damages.

Claimants in the case, led by digital economy specialist and lecturer at King's College Dr. Rachael Kent, are fighting the up to 30 percent commission Apple collections for in-app purchases (IAP). The lawsuit charges Apple is running its App Store as an illegal monopoly.

The suit says Apple forces developers to pass on the commission costs to consumers in the form of higher app prices. Apple has called the lawsuit "meritless" in court filings.

Kent said in a statement that Apple has "no right" to charge such a significant commission fee — "particularly when Apple itself is blocking our access to platforms and developers that are able to offer us much better deals."

"Apple achieves this by slapping unjustified charges on its users," she said in her filing, pointing out that global App Store revenues topped $15 billion in 2021. "It would not be able to impose these exorbitant charges if competitor platforms and payment systems were allowed to compete on its devices," the brief noted.

"Apple guards access to the world of apps jealously," Kent said. "This is the behavior of a monopolist, and is unacceptable." The case is believed to bethe first of its kind for a Big Tech firm in the UK.

Apple's rebuttal

In its response, the company said in a statement that "the commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces. In fact, 84 percent of apps on the App Store are free, and developers pay Apple nothing."

It went on to note that "for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15 percent." The company introduced that lower rate for developers with annual revenue of less than $1 million in 2021, the same year the court case was originally filed.

The company has further pointed out in its filing that it considers the fees fair. It notes that the commissions cover the cost of the store and services provided to developers such as security, promotion, and the development of digital tools for access.

The crux of the case is that Dr. Kent charges Apple with acting illegally within its App Store, making the case similar to the seemingly never-ending Apple vs Epic saga. That earlier legal battle is currently in limbo, pending a ruling on Apple's appeal to throw out the entire case, based on recent precedents in similar cases.

The UK's Competition Appeal Tribunal will hear the new case, which is expected to last about seven weeks. Officials, including Apple CFO Kevan Parekh, are expected to testify.