Apple faces £1.5bn lawsuit in UK for ‘overcharging’ on App store

A trial commencing on Monday will seek to determine the validity of a claim for compensation exceeding one billion pounds.

A lawsuit filed in May 2021 alleges that Apple has violated European and UK competition laws by preventing other app stores from being used on Apple devices such as iPhones and iPads.

The claim was that some 20 million Apple users may have been overcharged by the company “due to its ban on rival app store platforms.”

The complainants say a “30 per cent surcharge” that the company “imposes” on apps purchased through Apple’s App Store comes at the “expense of ordinary consumers.”

The case, which Apple has called “meritless”, has been brought by Kings College London academic Rachael Kent and the law firm Hausfeld & Co.

The trial is set to last seven weeks at the Competition Appeal Tribunal in London.

At the heart are accusations that Apple used the App Store to exclude competitors, forcing users to use its system and boosting profits in the process.

“The 30 per cent surcharge relates to most of the applications that you’re going to be using when you’re downloading and making in-app purchases on the App Store,” Kent told AFP, citing dating platform Tinder as an example.

However, it does not apply to applications offering physical products, such as the delivery services Deliveroo and Uber Eats, the academic specifies.

Any user who purchased applications or subscriptions in the British version of the App Store between October 1, 2015, and November 15, 2024, may be entitled to compensation from Apple, believes Kent, a lecturer in the digital economy.

The claim seeks total estimated damages of £1.5 billion ($1.8 billion).

According to British law, in this type of class action, all potentially affected persons are included in the procedure by default and may benefit from possible compensation, unless they voluntarily opt out.

In reaction, Apple responded to AFP by referencing a previous statement from 2022, where they indicated that the majority (85%) of apps available on the App Store do not require payment.

“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 and Apple’s valuable technologies have delivered to the UK’s innovation economy,” the statement added.

The company also insists that the commission charged by the App Store is “very much in the mainstream of those charged by all other digital marketplaces”.

Investigations and complaints against Apple have multiplied around the world in recent years, particularly regarding its app store.

The American behemoth is the subject of another complaint worth £785 million (936 million euros) related to rates charged to app developers.

Last June, the European Commission accused Apple of breaching its digital competition rules by preventing developers from “freely steering consumers to alternative channels” other than the App Store.

Apple then agreed to relax its rules, announcing in August that iPhone and iPad users in the European Union could delete the App Store and use competing platforms.

“They’re responding to these investigations and also being told what to do. I don’t think they’re going to do it voluntarily, which I think is why it’s really important to bring these collective actions,” said Kent.

AFP