Apple Loses UK Antitrust Lawsuit Over App Store Fees, Faces £1.5 Billion in Damages
Apple engaged in anticompetitive behavior by charging App Store developers "excessive and unfair prices" for app distribution services, the UK's Competition Appeal Tribunal (CAT) ruled today [PDF] (via Reuters).
The Tribunal found that Apple abused its market power by overcharging developers from October 2015 through the end of 2020. Developers were forced into using Apple's in-app purchase system and had no alternative to paying up to a 30 percent commission during that time period. The excessive fees ultimately led to higher prices for consumers.
According to the CAT, Apple had a monopoly over iOS app distribution and in-app payments. Apple's argument that Android and other platforms were viable alternatives for consumers and developers was rejected. The Tribunal also did not accept Apple's argument that its rules and fees were required for user security and privacy.
The end of 2020 in the UK's timeline corresponds with the launch of the App Store Small Business Program that saw Apple reduce App Store fees for independent developers and small business owners. The program reduced the commission that Apple collected from developers earning under $1 million per year to 15 percent, down from 30 percent. It's also when Apple began implementing other App Store changes in response to cases like Epic Games v. Apple.
The class action lawsuit was first filed in 2021 by Kings College London academic Dr. Rachael Kent, and the claim seeks up to £1.5 billion in damages. The period between 2015 and 2020 was selected in order to determine how much Apple will need to pay to UK consumers.
A damages trial is scheduled for November. Apple said it will appeal the ruling.
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