Apple is facing a lawsuit in London alleging that the company overcharged nearly 20 million consumers in the United Kingdom for purchases on its App Store. The new lawsuit adds to a growing list of lawsuits filed against the tech giant in various countries around the world.
Apple's 30% commission is "excessive" and "unlawful," the plaintiffs said in a press release. The lawsuit, filed at the High Court in London on May 10, demands that the US giant compensate iPhone and iPad users in the United Kingdom for alleged (long-term) overcharging.
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Rachael Kent, lead plaintiff in the case and professor at King's College London, argues the following: "Apple is abusing its dominance in the app store market, which is having an impact on UK consumers.
The lawsuit, which Apple has called "meritorious,"was filed after a U.S. trial over Epic Games that the iPhone maker is running its market as a monopoly, defrauding developers and consumers. The U.K. lawsuit focuses on alleged harm caused to customers, not developers.
Earlier this year, Apple reduced the commission on its App Store to 15% from 30% for developers who generate annual revenue up to $1 million from their apps, as well as for those who are new to the store.
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The legal challenges come as Apple faces backlash from global regulators and some developers, who claim its fees and other policies are “unfair and self-serving.” Last month, the European Commission sent a Statement of Objections to Apple, saying it believes the company is abusing its dominant position in distributing music-playing apps through the App Store. The Statement of Objections reflects the Commission’s preliminary conclusion that Apple has violated European Union competition law.
On the other hand, Apple said in an emailed statement: “We believe this lawsuit is without merit and we are willing to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has brought to the UK’s economic innovation.”
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Apple also added that 84% of apps in the App Store are free and that developers pay nothing to the company. As for the vast majority of developers who pay Apple a commission for selling a “digital good” or service, they are entitled to a 15% commission rate, the tech giant said.
The lawsuit claims that Apple deliberately blocks potential competition and forces ordinary users to use its own payment processing system, a fact that allows the company to illegally reap excessive profits.
The plaintiffs say that any iPhone or iPad user in the UK who purchased paid apps, subscriptions or made other in-app purchases since October 2015 is entitled to compensation. They also estimate that Apple could be ordered to pay damages in excess of £1.5 million.
