Friday 1 July 2022 04:45 PM Apple WILL face courtroom showdown in the UK over its App Store trends now
Apple will face a full trial in the UK over allegations it breached competition law by overcharging people for apps on its App Store.
London's Competition Appeal Tribunal has this week refused Apple's attempt to limit a consumer claim led by Dr Rachael Kent, a lecturer in digital economy.
Dr Kent's claim alleges that Apple breached the law by excluding competition and charging an unlawful level of commission on digital purchases in the App Store.
It argues that forcing app developers to use Apple's payment system for in-app purchases and taking up to 30 per cent commission on those transactions is unfair and has bumped up prices for consumers.
If the trial rules against Apple, 19.6 million consumers who purchased paid apps in the App Store since October 2015 would be entitled to a share of £1.5 billion in compensation.
The full trial will take place in London, likely in 2023 at the earliest.
In a significant development for millions who use Apple’s UK App Store, the Competition Appeal Tribunal has refused Apple’s attempt to limit the consumer claim led by Dr Rachael Kent, which alleges abuses of competition law that result in systematic overcharging for apps and in-app purchases by Apple (file photo)
The legal claim applies to the most popular apps on iPhones and iPads, including Fortnite, YouTube, Tinder and others, which require payment at point of download, subscription payments or allow for in-app purchases.
The case is also 'opt-out', meaning people eligible for a refund will be automatically included in the claim, unless they choose to opt-out of the proceedings.
'This is excellent news for App Store users in the UK,' said Dr Kent, who lectures at King’s College London and is being represented by law firm Hausfeld & Co.
'I applaud the Competition Appeal Tribunal for this clear and well-thought-out decision.
'A claim of this magnitude is always going to be heavily defended. The anti-competitive practices that we are alleging against Apple go to the heart of Apple’s business strategy, and with its almost unlimited resources, it will always make this a challenging fight.
'We look forward now to progressing the case on behalf of consumers and businesses.
'We believe we have a convincing and well-founded argument that Apple’s practices are detrimental to those in the class, and the evidence will support it.'
Dr Kent's legal claim, which was filed last year, accuses Apple of deliberately shutting out the competition in the App Store and forcing people to use its own payment processing system, generating 'excessive' profits for itself in the process.
Typically, 30 per cent of the amount app users spend in the App Store goes straight to Apple.
Apple has allegedly forced app purchases to be routed through its own App Store Payment Processing System, where this high commission charge is imposed.
Apple has consequently blocked developers' ability to enable users to pay for many app services through an alternate payment system.
The collective action has been brought by Dr Rachael Kent, an expert in digital economy and a lecturer at King's College, London
This in turn forces app developers to raise the price of their apps to cover the 30 per cent fee, ultimately meaning App Store users pay more than they otherwise would.
