The UK’s Competition Appeal Tribunal (CAT) has rejected Apple’s bid to dismiss its claim over its 30 percent App Store transaction fee. The plaintiff representing the interests of British iOS application developers is demanding compensation from Apple in the amount of £785 million ($980 million).
Legal Challenge Upheld by Tribunal
Three CAT judges rejected Apple’s request to dismiss the case or grant summary judgment. The tribunal unanimously decided that Apple’s accusations of blocking competitors were justified. The lawsuit on behalf of 1,566 British iOS app developers was filed last year by Sean Ennis, a professor at the Center for Competition Policy at the University of East Anglia. He accused Apple of locking out developers from its ecosystem and overcharging them for the right to sell apps. According to Professor Ennis, Apple has a 100% monopoly in the distribution of iOS applications.
Global Antitrust Pressure on Apple
In the appeal and motion to have the case dismissed, the company argued that the competition law cited by Ennis could not apply in the UK because UK developers he represented were charged a 30 percent fee for transactions that took place outside the UK (or EU before the country leaves the bloc). The tribunal disagreed, asserting its right to hear the case even though in some cases fees were charged on transactions outside the UK segment of the App Store, and Ennis’ allegations have some prospects in court.
Apple is increasingly facing similar lawsuits around the world and is taking steps to reassure authorities and the developer community – specific measures vary by region. In the EU, the company reduced the commission to 15% for developers with an annual income of less than $1 million and even allowed applications to be distributed outside the App Store, but in this case they imposed a “Core Technology Fee” of €0.50 for each first download per year when exceeding a million installations – for some projects the total amount may exceed the commission of 30%. However, these conditions do not apply in the UK.
Ongoing Legal Battles
The Ennis case is not the only antitrust lawsuit against Apple in the UK. In 2022, the CAT admitted another case alleging that the App Store’s 30 percent transaction fee is monopolistic and unfair. For this, the company is demanding compensation in the amount of £1.5 billion ($1.8 billion) – they want to recover these funds not from developers, but from iPhone owners, whose lawyers claim that due to commissions, they overpay for applications and in-app purchases . The case is still pending, adds NIX Solutions.
We’ll keep you updated on this developing story.