Along with allegations of spying on its workers, Apple is facing a new lawsuit in the UK. The App Store business model, where the company charges up to 30% fees for app purchases or in-app purchases, has been in the sights of regulators for some time. Now, UK lawmakers have given the green light to a lawsuit that could cost Apple up to 1 billion dollars.
Lawsuit seeks Apple to return nearly 1 billion dollars to UK app developers
The plaintiff alleges that Apple’s fees for payments made through the App Store represent an anti-competitive tax on the technology industry. Apple also implements practices to prevent app developers from promoting alternative payment methods. This forces users to always go through the Cupertino giant’s payment platform, negatively impacting prices. Even when Apple allows to promote alternative payment methods, the company charges a fee for using them.
The lawsuit has the potential to get changes in fee policies and the return of up to £785 million ($995 million) to 13,000 app developers. Sean Ennis, a UK competition policy professor, and Harbour Litigation Funding, a third-party litigation funder, are pushing for it. Apple has been charging a fee of up to 30% in the UK since July 25, 2017, the document recalls.
The company tried to appeal to the UK’s Competition Appeal Tribunal to have the suit not prosper. However, the judges rejected the arguments presented by the brand. Therefore, the plaintiff has a clear path to continue with the process.
Apple’s App Store fees under scrutiny from regulators
In recent years, the activity of regulatory and antitrust bodies in big companies has intensified. The Epic Games case against Apple put the 30% fee in the spotlight of the authorities. A court order in January led to changes in the App Store’s policies, enabling app developers to include links to external websites for subscription payments. However, the company still imposes a 27% fee on purchases made from websites accessed through these links. You can only avoid the fee if you manually access the website.
Months later, pressure from the EU forced Apple to make more far-reaching changes to the App Store fee scheme. Regulators are still reviewing these changes because developers say they could worsen the situation.