A class action lawsuit has been filed against Apple in the UK for overcharging nearly 20 million UK customers for App Store purchases. The lawsuit has been filed with the UK’s Competition Appeal Tribunal. It alleges that Apple’s 30% App Store fees and not offering an alternative payment system allows it to generate “excessive levels of profit.”
The lawsuit wants Apple to compensate all iPhone and iPad users in the UK, with a staggering £1.5 billion being claimed in damages. The lead claimant of the case is Rachael Kent, a professor at King’s College London. She says, “Apple is abusing its dominance in the app store market, which in turn impacts U.K. consumers.” She claims in the lawsuit that “Apple guards access to the world of apps jealously, and charges entry and usage fees that are completely unjustified. This is the behavior of a monopolist and is unacceptable.”
The lawsuit was filed a week after Apple vs. Epic Games trial began in the US court. Apple has called the case “meritless.” Below is the company’s full statement on the matter:
We believe this lawsuit is meritless and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the UK’s innovation economy,” Apple said. “The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces. In fact, 84% of apps on the App Store are free and developers pay Apple nothing. And 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%.
Apple is already being targeted from multiple avenues over the 30% App Store fees. Epic Games has dragged Apple to court for the same reason. The trial has revealed that Apple’s Phill Schiller had suggested reducing the App Store fees to 20-25% in 2011. Following all criticism and regulatory investigation last year, Apple reduced the App Store fees to 15% from 30% for small developers.[Via Bloomberg]