Apple is facing a class action lawsuit in London. The company is accused of charging nearly 20 million British customers excessive fees on App Store purchases. This is another legal dispute that Apple has encountered around the world.
The plaintiff said in a press release on Tuesday that Apple’s 30% standard percentage is “excessive” and “unlawful”. The lawsuit was filed with the London Competition Appeals Court on Monday, requiring Apple to compensate British iPhone and iPad users for years of persistently high fees. Apple responded that the lawsuit has no legal basis.
“Apple is abusing its dominance in the app store market, which in turn impacts U.K. consumers,” said Rachael Kent. She is the lead claimant in the case and a professor at King’s College London. Also, she teaches how consumers interact and depend upon digital platforms.
There was another suit filed a week ago into a U.S. trial over Epic Games Inc. The latter claims that Apple is running its marketplace like a monopoly, cheating developers and consumers. In this sense, the UK lawsuit focuses on the alleged harm caused to customers rather than developers. So if combining these two, it turns out the Cupertino-based company is not fair towards both users and developers.
Lawsuits Are Common For Apple
At the beginning of this year, Apple lowered its App Store fee to 15% from 30% for developers. But the new policy works only for those who produce as much as $1 million in annual revenue from their apps and those who are new to the store.
But there are serious reasons behind Apple’s actions. Last month, the European Commission sent a statement of objections to the firm. It said that Apple abused its power as the “gatekeeper” for music-streaming apps on its store.
“We believe this lawsuit is meritless and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the UK’s innovation economy,” Apple said in an emailed statement.
“The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces,” Apple said. “In fact, 84% of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15%.”
So all parties think that Apple leaves no room for potential competition. And it forces ordinary users to use its own payment processing system. As a result, Apple generating unlawfully excessive levels of profit.
The plaintiff stated that iPhone or iPad users who have purchased paid apps, subscriptions, or other in-app purchases since October 2015 are eligible for compensation. They predict that Apple’s total compensation amount may exceed $2 billion.