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UK developers launch $1bn Apple lawsuit over app store fees

Apple app store lawsuit
Image credit: Tada Images / Shutterstock

A professor from the University of East Anglia is leading a class action lawsuit against Apple that’s seeking $1bn (£785m) in damages over app store fees.

The Apple App Store lawsuit, managed by law firm Geradin Partners, represents 1,566 of the UK’s app developers.

The suit is accusing Apple of “abuse of market dominance” over the 30% commission the tech giant charges on app store sales.

“Apple has a dominant position in the market for app distribution on iOS devices, since the App Store is the only available channel for distributing apps to iOS device users,” said Sean Ennis, professor of competition policy at the University of East Anglia.

“The fact that users and developers are completely locked into the iOS system and the App Store gives Apple monopoly power, which Apple leverages to charge excessive fees on app developers.”

UKTN has contacted Apple for comment.

The lawsuit will go before the UK’s Competition Appeal Tribunal, at a time when Apple is already being scrutinised by the Competition and Markets Authority.

Separate consumer legal action against Apple is awaiting trial at the Competition Appeal Tribunal, which is seeking up to £1.5bn in damages.

Ennis, who has previously held roles at the US Department of Justice, European Commission and OECD, said that the 30% premium on app and in-app transactions “could be reinvested in the UK’s digital economy”.

Developers are also required to pay $99 annually to remain on the Apple App Store.

A US House Judiciary Committee’s Subcommittee report found that the tech giant’s net revenue from its app store last year was $18.8bn.

Damien Geradin, a founding partner at Geradin Partners, said: “This case is about Apple’s exploiting App Store monopoly. The wealthiest company in the world is sucking the blood out of UK-based developers, imposing a sky-high fee that bears no relationship with the cost of running to App Store.”

Geradin called the 30% premium “pure profit” and that it could be better spent on R&D.

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