Apple’s bid to dismiss a lawsuit valued at just under $1 billion, filed in a UK court by 1,500 UK-based developers, alleging that the Cupertino giant unfairly charged commission fees on app and content purchases, has ended in failure.
The lawsuit, initiated by 1,500 UK-based developers led by Sean Ennis, a competition law professor and economist, was filed at London’s Competition Appeal Tribunal (CAT) last year. It alleged that Apple charged developers unfair commissions of up to 30%. Lawyers accused the US tech giant of leveraging its dominant market position in app distribution on iPhones and other Apple devices.
Apple is already facing scrutiny in the US and Europe over the fees it charges third-party developers for distributing apps via the App Store. In Europe, Apple was compelled to comply with the stringent provisions of the Digital Markets Act (DMA), resulting in the implementation of features allowing users to sideload iPhone apps in EU countries, supported by Patreon. In the US, Apple made changes to its App Store following a prolonged legal battle with Epic Games, the company behind “Fortnite.”
However, the UK’s departure from the EU may have led Apple to believe it could intimidate developers in the UK. Apple has also argued that 85% of developers on its App Store do not pay any commission at all. The tech giant’s lawyer, Daniel Piccinin, contended that UK developers cannot make a claim until they are charged for purchases made through the UK App Store. However, Judge Andrew Lenon, in a written ruling on Friday, refused to dismiss the lawsuit, observing that there is evidence that “Apple’s overcharging of commission to app developers based in the UK, with respect to commerce transacted on non-UK storefronts, is akin to being conducted in the UK.”
In a separate case, representing 24 million iPhone users, filed last year alleging defective iPhone batteries, Apple and its App Store have come under fire worldwide. The EU’s Digital Markets Act was the first genuine effort to rein in Apple and force it to open doors for fair competition on a level playing field. Consequently, the Cupertino-based tech giant has been forced to make concessions, allowing users to install third-party app marketplaces and enabling app developers to offer their products for download via their own websites.
