Apple Faces $1B UK Lawsuit Over App Store Fees

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Facts

  • On Tuesday, over 1.5K UK app developers brought a £785M ($1B) class action lawsuit against Apple, claiming that the company's required fees for using its App Store are excessive.1
  • The app creators will be represented by Prof. Sean Ennis of the University of East Anglia's Centre for Competition Policy. Currently, Apple charges between 15-30% in commission for App Store purchases.2
  • Revenue from Apple's services business, which includes the App Store, sits at approximately $20B a quarter. Apple has previously claimed that 85% of App Store developers don't pay commissions.3
  • Prof. Ennis will be advised by law firm Geradin Partners, who also released a statement calling the charges "unfair in their own right" while "harm[ing] app developers and also app buyers."4
  • Prof. Ennis stated that the 30% commission fee could rather be "reinvested in the UK's digital economy." The case will go before the UK's Competition Appeal Tribunal.5

Sources: 1Reuters, 2Sky News, 3CNN, 4Yahoo Finance, and 5UKTN.

Narratives

  • Narrative A, as provided by MinnPost. App developers are currently defenseless against the likes of Apple and Google. Both have become gatekeepers of the entire app economy, creating arbitrary policies and charges that are oppressive in intention. Change must occur, and Big Tech must be barred from holding such positions.
  • Narrative B, as provided by The Hindu Business. Apple's closed ownership app store model creates a secure and trustworthy environment for users. Breaking this system could be extremely damaging, and any change should only be a last resort. While the industry welcomes developer concerns, the App Store model is still best for all parties.

Predictions