Apple faces potential damages of up to £1.5bn following a collective legal action ruling on behalf of 36 million UK iPhone and iPad users, encompassing both individual consumers and businesses.
The Competition Appeals Tribunal (CAT) determined that Apple abused its dominant market position by imposing “excessive and unfair” pricing through its standard 30% commission on app sales and in-app purchases.
The plaintiffs contended that this commission led to inflated prices for apps, app subscriptions, and in-app digital content for consumers.
Apple has voiced strong disagreement with the ruling and intends to appeal the decision.
The case was spearheaded by Dr. Rachael Kent, an academic in the field.
Legal representatives for Dr. Kent assert that this is the first successful claim brought under the UK’s collective action regime.
Dr. Kent hailed the decision as a “landmark victory, not only for App Store users, but for anyone who has ever felt powerless against a global tech giant.”
“Today’s ruling sends a clear message: no company, however wealthy or powerful, is above the law,” she stated.
The tribunal’s ruling follows the Competition and Markets Authority (CMA) designation of Apple and Google as possessing “strategic market status,” acknowledging their substantial influence over mobile platforms.
This designation empowers the CMA to potentially mandate that Apple allow rival app stores to operate on iPhones within the UK.
Such a change would represent a significant departure from Apple’s “closed system,” which currently restricts app downloads to its own App Store.
Apple argues that its commission applies only to paid apps and in-app purchases, and that 85% of apps on the App Store are not subject to any commission.
The company also highlights its program for small businesses, which reduces the standard commission rate by half.
In a statement provided to the BBC, Apple expressed strong disagreement with the ruling, asserting that it reflects a flawed understanding of the “thriving and competitive app economy.”
Apple maintains that the App Store has benefited businesses and consumers across the UK, fostering a dynamic marketplace where developers compete and users can access millions of innovative apps.
“This ruling overlooks how the App Store helps developers succeed and gives consumers a safe, trusted place to discover apps and securely make payments,” Apple stated.
The company further added, “The App Store faces vigorous competition from many other platforms — often with far fewer privacy and security protections.”
Apple has confirmed its intention to appeal the decision.
According to Hausfeld & Co. LLP, the legal firm representing Dr. Kent, “any UK user of an iPhone or iPad who purchased paid-for apps, subscriptions or made in-app purchases of digital content within the UK storefront of the App Store at any point since 1 October 2015 is potentially entitled to compensation from Apple.”
The purchases must have been made on iPhone and/or iPad devices, they added.
However, the BBC reports that the precise amount of compensation that eligible individual consumers or businesses may claim remains to be determined.
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