Apple Faces £1.5 Billion UK Lawsuit Over App Store 'Overcharging'

[MacRumors]

Apple is heading to court in London on Monday to defend against a class-action lawsuit seeking £1.5 billion ($1.9 billion) in damages over alleged anti-competitive App Store practices in the UK.

Filed by King's College London academic Dr. Rachael Kent, the lawsuit claims Apple has violated UK and European competition laws by requiring iOS users to download apps exclusively through the App Store while charging developers a commission of up to 30% on purchases.

The legal action represents around 19.6 million UK iPhone and iPad users who may have been overcharged for apps and in-app purchases between October 2015 and November 2024. Under UK law, affected users are automatically included in the claim unless they opt out.

Kent argues that while the App Store was initially "a brilliant gateway" for services, it has become "the only gateway" for millions of consumers, with Apple acting as a monopolist by blocking access to alternative platforms that could offer better deals.

Apple has firmly rejected the allegations, calling the lawsuit "meritless," and says that its App Store commission rates are "very much in the mainstream" compared to other digital marketplaces. The company says that 85% of apps on the App Store are free, and many developers qualify for a reduced 15% commission rate.

The trial at the Competition Appeal Tribunal is expected to last seven weeks and is one of several legal challenges Apple faces globally regarding its App Store practices.

The company is also defending against a separate £785 million UK lawsuit related to developer fees and was recently fined €500 million ($538 million) by the European Commission for breaching digital competition rules relating to music streaming services.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Faces £1.5 Billion UK Lawsuit Over App Store 'Overcharging'

 

[kiranmk2]

I wonder if Apple now have the data on the new app stores in the EU. I can't imagine that the average man on the street would even know about alternative app stores that are available, never mind download & use them. After all, in the PC market Steam is still the go-to store even though they charge more commission than other stores.

 

[I7guy]

Goof luck UK. Good luck Apple.

 

[ppj845]

52nd state?

 

[contacos]

I wonder if Apple now have the data on the new app stores in the EU. I can't imagine that the average man on the street would even know about alternative app stores that are available, never mind download & use them. After all, in the PC market Steam is still the go-to store even though they charge more commission than other stores.

It went no where, just like there has yet to be a single Browser that does not use the WebKit.

Honestly, the whole drama is over nothing. Apple should just open it up because clearly people don't care and always turn back to / stay on "default". It's just more convenient.

I'd like to know how many people even know there are custom keyboards after all these years.

Tldr: convenience always wins

 

[DelayedGratificationGene]

This EU and UK bullying nonsense will abruptly stop under the new administration. Absolutely no way this will be tolerated.

 

[Apple Knowledge Navigator]

My argument consistently would be, why is the iPhone setup this way but the Mac isn’t? I’m all for security, but giving people choice is importantly. Put as many warning messages as you want and make the user responsible.

 

[vantelimus]

More nonsense from people looking for an extortion payday.

 

[uller6]

Now do oil companies next! Gasoline shouldn’t have a 50% profit baked in! Sue them and get our money back!

 

[H2SO4]

It went no where, just like there has yet to be a single Browser that does not use the WebKit.

Honestly, the whole drama is over nothing. Apple should just open it up because clearly people don't care and always turn back to / stay on "default". It's just more convenient.

I'd like to know how many people even know there are custom keyboards after all these years.

Tldr: convenience always wins

That’s not always true. What you find is that once people get used to something, even if there is an alternative, better, shorter, cheaper, quicker way of doing something they often stay where they are.
TLDR: convenience sometimes wins.

 

[Zdigital2015]

My argument consistently would be, why is the iPhone setup this way but the Mac isn’t? I’m all for security, but giving people choice is importantly. Put as many warning messages as you want and make the user responsible.

That’s not the way the world works…the user will never take responsibility for their own security. When they inevitably end up scammed, they run to their politicians to “protect” them and fix the problem. The politician seeking reelection, money and power will find the path of least resistance to each and use the power of the office to make the constituent feel “safe” while lining their own pockets at the expense of actually doing anything useful for anyone but themselves. This is the way.

 

[Zest28]

Isn't the UK charging 45% to 47% in taxes for everything you earn over 125.000? Talk about overcharging.

 

[Big_D]

I wonder if Apple now have the data on the new app stores in the EU. I can't imagine that the average man on the street would even know about alternative app stores that are available, never mind download & use them. After all, in the PC market Steam is still the go-to store even though they charge more commission than other stores.

The average man on the street doesn't usually care. They just want it to work. If people do take it up, I doubt it would be more than a couple of percent of users.

That is what always narked me about Apple's pig-headedness about this. The whole thing is so integrated and people generally just want a simple experience that a majority wouldn't even notice that there are alternatives and of those that do, only a few would be bothered enough to change. But, this is the vocal minority that are always complaining about this.

Apple should have just let them mess up their phones, if they really want to. It would stop the bad press about scamming users with the Apple vig and the majority would ignore the option, because it doesn't get much press.

The bit that annoys me is that I can buy a book on Amazon, but I can't buy the Kindle or the Audible version of the book in the Amazon app, the Kindle app or the Audible app... Plus, I already have a payment relationship with Amazon and the transaction takes places between me and Amazon and the content never touches Apple's network, so they aren't inconvenienced in any way, no extra costs are involved, yet they want their 30% for doing "nothing" (which is why the option to buy is missing, in essence).

As to that being the mainstream, it is only the mainstream because Google followed Apple's example and Google are also being battered about their 30% vig as well.

 

[Big_D]

My argument consistently would be, why is the iPhone setup this way but the Mac isn’t?

Because the Mac has been around since before the Internet and there were no safe electronic distribution methods available, it was all physical media, then the Internet came and it was a free-for-all. This is also beyond many users, my wife always got me to install software on her Windows PC, because it was too complicated, although she could just about get her head around the App Store and Google Play Store.

When the smartphone came along, they could do a reset and provide a simple way of doing things that aimed to increase security and lower the risk of getting malware on the device. It makes a lot of sense, at least in theory. The way the Apple vig gouges the market is the main problem with the actual implementation...

 

[Big_D]

Now do oil companies next! Gasoline shouldn’t have a 50% profit baked in!

Over here, around 70% of the price is tax.

 

[gnipgnop]

My argument consistently would be, why is the iPhone setup this way but the Mac isn’t? I’m all for security, but giving people choice is importantly. Put as many warning messages as you want and make the user responsible.

Simple answer: desktop computing systems like the Mac were developed in the 1970s and 80s when digital delivery of software through digital storefronts wasn't possible. Software sales and installation was something that gradually progressed over a long period of time.

 

[Unregistered 4U]

Apple acting as a monopolist by blocking access to alternative platforms that could offer better deals.

This would only be true if, like a TRUE monopolist, Apple was:
1. Buying hardware producers and then shutting them down
2. Requiring that developers releasing applications for the iPhones ONLY release applications for the iPhone
3. Restricting carriers to only carrying the iPhone
and other things like that. Monopoly power allows companies to physically, literally restrict the existence of ANY competition. Not… whatever weak sauce they’re trying to define here.

As it is, for an iPhone user in the UK, the ONLY thing potentially blocking them from access to Android’s better deals is figuring out how to leave the Apple ecosystem, and the applications for doing that are FAR more robust today than previously. But, that would require them to understand that a “monopoly” definition that includes a company’s trademarked product names is not a “monopoly” it’s “products and services produced/provided BY that company”. If an Apple iPhone user doesn’t want to use the Apple iPhone App Store, it’s easy. Just don’t use an “Apple” anything and you’re in the clear.

 

[sdz]

The "bullying" will only get worse with the new US administration.

 

[HobeSoundDarryl]

Play ball Apple. Once GOVs get on this train, they never lose. They have even deeper resources- including legal resources- than ANY corp and can fight for a hundred years if necessary.

"Hands off" Capitalism works fine when companies are fully competing with others. When any of them grow into Kings of a space or even a niche of size and then start exploiting some hold, GOVs always come to "break up" that hold. I've seen this play out dozens of times in my lifetime. It always ends the same. The companies always fight hard to protect their easy money lock but ultimately they have to unlock that lock.

It's already been the EU and Apple had to make significant changes (with probably more to come). Here's it's the U.K. Next it will just be another Country(s). And then more. And then more after that.

The EU initial resolution proves (for nearly a year now) that there is no doom & devastation in such changes. Bank accounts were not emptied. Viruses are not running amok. Children can still play in a park. EU people are not starving or homeless or all dead from Apple having to comply. There was no "Wolf! Wolf!" in spite of the endless rounds of that being shouted with vigorous confidence. Where is the Wolf? I doubt the evil crime syndicates could have so much patience if they can easily empty accounts and take property, etc. Last I checked, the EU is perfectly fine, all survivors, all of their iDevices are still working fine, etc.

The rest of the world's GOVs can readily make similar moves towards similar ends.

I typed this NOT in an IE browser which was attempting to hold onerous dominance of another thing only a few decades ago. Their lock was so potent Jobs himself made a deal with Microsoft to install IE on those early Macs when he came back to "save Apple." My first Mac had IE pre-installed as default browser.

If I could call any readers of this message, it would not be through AT&T long distance (at any price AT&T wants to charge) attempting to hold onerous dominance of another service only a few decades ago.

They all lose this battle once GOV takes it up. The choice is to fight it kicking & screaming and have diverse bureaucracies mandating through laws of all kinds of variations of what each wants... or just learn from the past and proactively make changes now to mostly keep other GOVs out of this pot. It's still only a few GOVs laws to which Apple must comply now. But it won't stay that way if Apple doesn't evolve their practices.

If Apple proactively corrects this, other rich targets then rise to the top for GOV actions along these lines. However, I expect Apple to do what they all did in the past- fight, fight, fight- and then eventually lose and comply. The short-term easy money for Wall Street likely trumps the longer-term benefit of simply evolving now, taking some short-term financial hits, and moving on to other innovations to make up for the change. They all fight-fight-fight and then eventually lose and comply. To do something else this time would require some "think different."

 

[gnipgnop]

Kent argues that while the App Store was initially "a brilliant gateway" for services, it has become "the only gateway" for millions of consumers, with Apple acting as a monopolist by blocking access to alternative platforms that could offer better deals.

Where's the proof of "better deals"? Desktop and console software has always been more expensive than mobile. And I've never seen anyone provide evidence that Android generally provided lower prices on apps than iOS/iPadOS.

 

[krspkbl]

"just leave the UK!!!"

hope the gov kicks apple's ass.

 

[Unregistered 4U]

Play ball Apple. Once GOVs get on this train, they never lose. They have even deeper resources- including legal resources- than ANY corp and can fight for a hundred years if necessary.

The UK depends on the iPhone for a large portion of what they expect their tech future to be. That’s why they’re not restricting the sale of the iPhone, they MUST maintain the flow of those into the region. Android users simply don’t drive the profits in the digital market that the iPhone does.

As long as they’re unwilling to take steps like blocking the iPhone, they’ll always be about snipping at the edges and never seriously dealing with the problem.

I've seen this play out dozens of times in my lifetime.

“I was around when the iPhone was introduced and it would NEVER have been a success if the EU and UK didn’t restrict NOKIA’s ability to operate in those regions, providing an opportunity for the iPhone to compete.” Only that’s NOT what happened.

The companies always fight hard to protect their easy money lock but ultimately they have to unlock that lock.

LOL, investing billions per year in the creation and iteration of hardware, upgrading and securing the OS and development tools, responding to hundreds/thousands of request from developers for assistance, marketing, packaging and shipping devices all around the world is an “easy money lock.”

 

[gnipgnop]

The EU initial resolution proves (for nearly a year now) that there is no doom & devastation in such changes.

The EU claimed that the DMA would significantly improve app store competition and prices for consumers. That hasn't happened.

 

[HobeSoundDarryl]

That doesn't really matter. The lock is unlocked. So there is POTENTIAL for competition to work where there was no such potential before. Capitalism needs robust competition for the system to work for the consumer side of the model. Else, consumers are inevitably exploited. Give a marketplace time and real competition does tend to drive prices down. However, keep a market locked to one "Company store" and the pricing is one price.

Best I know, no lone Company Store model has ever worked better than robust competition in terms of serving consumer interests over time. If anyone can name just one that has been allowed to run for a long time as the one and only source of anything for mainstream pools of consumers, please name it.

Microsoft's hold with IE was broken and as a result Macs could eventually dump a dependency(?) on IE for Safari and/or many other browsers. AT&Ts hold over long distance service was broken and now "long distance" service can be towards free via VOIP and there are still many players for "long distance" phone service in the space.

Name one where only one source of services or products has persisted and judged as great for consumers. You can draw the name from all of history.

 

[transmaster]

The bit that annoys me is that I can buy a book on Amazon, but I can't buy the Kindle or the Audible version of the book in the Amazon app, the Kindle app or the Audible app...

You don't understand the reason for this, and it has nothing to do with Amazon. The Big Five book publishers, the authors in their stable, sued Amazon for price fixing. Amazon had a fixed price on Kindle and Audible books. The book publishers didn't like this and sued. In an out-of-court settlement in 2015, The Book Publishers took control of their pricing and raised their publications by 30+%, and Amazon agreed to remove direct sales from their apps. With Audible, you have to be a member, and then you can purchase credits. This worked out for independent authors. They are free of the New York Publishing mafia. They can directly post their books on Kindle and arrange with Audible for audio editions.