Apple has lost in the £1.5bn UK consumer claim after a tribunal found that its app store practices removed competition and forced developers to pay high fees.
The case was brought to the Competition Appeal Tribunal by lead claimant Dr Rachael Kent, who previously told UKTN that iPhone users were forced to accept any terms set by Apple due to the lack of choice available for app stores.
The senior lecturer at Kings College London pursued the claim on behalf of the approximately 36 million iPhone and iPad users in the UK, including both business and consumer users.
The tribunal ruled unanimously that Apple abused its dominant position, resulting in losses of around £1.5bn over a 10-year period.
As much as 30% of the price of app subscriptions and in-app purchases on iPhones and iPads goes to Apple, which requires all purchases to be routed through its own payment system, restricting developers options in offering alternative payments.
“In our view, [Apple’s] restrictions cannot sensibly be justified as being necessary or proportionate to deliver the benefits which Apple puts forward as flowing from its objective of an integrated and centralised system,” said the tribunal.
“On the contrary, the competition which would exist absent the restrictions is in our view much more likely to deliver the benefits that consumers want, in the form and at the price point they want them.”
Any UK user of an iPhone or iPad who made purchases on the app store since October 2015 is potentially entitled to compensation from Apple.
“This is a landmark victory — not only for App Store users, but for anyone who has ever felt powerless against a global tech giant,” Kent said.
“This case proves that the UK’s collective action regime is working. It empowers ordinary people and small businesses to hold even the most powerful corporations to account. Today’s ruling sends a clear message: no company, however wealthy or powerful, is above the law.”
The ruling followers growing action from competition regulators to tackle the dominant control that Apple and Google have over the app store marketplace.
The Competition and Markets Authority (CMA) this week designated the firms as having strategic market status (SMS), giving it additional licence to pursue action against the practices.