Apple hit with $1B UK lawsuit over ‘abusive pricing’ in App Store
More than 1,500 developers in the UK are suing Apple over the company’s “excessive” App Store fees.
The £785m (€912m) class action lawsuit is seeking compensation for the developers, who pay the iPhone-maker commissions of up to 30% for in-app payments. Companies and lawmakers around the world have lambasted the policy.
Critics accuse Apple of operating a monopoly that diverts earnings away from developers. They note that Apple’s services business — which includes the App Store — grew 5.5% to $20.9 billion in the first fiscal quarter of this year.
The new lawsuit was filed by Sean Ennis — a professor at the University of East Anglia Centre for Competition Policy and a former OECD economist — on behalf of 1,566 app creators.
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Ennis argues that the fees also harm consumers, as they divert money that could be spent on building better apps.
“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 said in a statement.
“The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers.”
Apple has consistently defended the practice. The megacorp has previously said that 85% of developers on the App Store do not pay any commission. It also argues that the system provides access to markets and customers in 175 countries.
Nonetheless, the lawsuit is another British headache for the Silicon Valley giant. The company is also currently embroiled in a feud over plans to expand surveillance laws in the UK, which could force tech firms to withdraw security features.
Apple has threatened to remove FaceTime and iMessage from the UK if the plans are enforced.
More than 1,500 developers in the UK are suing Apple over the company’s “excessive” App Store fees.
The £785m (€912m) class action lawsuit is seeking compensation for the developers, who pay the iPhone-maker commissions of up to 30% for in-app payments. Companies and lawmakers around the world have lambasted the policy.
Critics accuse Apple of operating a monopoly that diverts earnings away from developers. They note that Apple’s services business — which includes the App Store — grew 5.5% to $20.9 billion in the first fiscal quarter of this year.
The new lawsuit was filed by Sean Ennis — a professor at the University of East Anglia Centre for Competition Policy and a former OECD economist — on behalf of 1,566 app creators.
Catch up on our conference talks
Watch videos of our past talks for free with TNW All Access →
Ennis argues that the fees also harm consumers, as they divert money that could be spent on building better apps.
“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 said in a statement.
“The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers.”
Apple has consistently defended the practice. The megacorp has previously said that 85% of developers on the App Store do not pay any commission. It also argues that the system provides access to markets and customers in 175 countries.
Nonetheless, the lawsuit is another British headache for the Silicon Valley giant. The company is also currently embroiled in a feud over plans to expand surveillance laws in the UK, which could force tech firms to withdraw security features.
Apple has threatened to remove FaceTime and iMessage from the UK if the plans are enforced.
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