Legal action taken against Apple in the United Kingdom could see the company have to repay close to 20 million customers for allegedly overcharging them.
A landmark class-action lawsuit argues that Apple’s 30% commission on App Store purchases bilked customers out of more than $2 billion over a number of years. The plaintiffs want Apple to repay the money it supposedly owes.
“Customers are the ones paying the 30% commission, via app purchases and in-app purchases,” Conal Walsh, a spokesperson for the claim, told Cult of Mac. “That’s why we say that customers should be first in line for compensation for the anti-competitive practices alleged.”
The class-action suit was filed in the Competition Appeal Tribunal in London on behalf of the roughly 19.6 million eligible U.K. iPhone and iPad users. It was brought by Rachael Kent, an expert in the digital economy and lecturer at King’s College, University of London.
The complaint is an opt-out case, meaning that all eligible claimants are automatically included in the claim. It covers any U.K. user of an iPhone or iPad who purchased apps or subscriptions, or made any in-app purchases, in the U.K. iOS App Store since October 1, 2015.
“If iPhone users had access to other app distributors besides the App Store, and [a way] within the App Store to [access] payment-processing services other than Apple’s, then logically Apple would have to drop its charges in order to compete with competitors,” Walsh said in an email to Cult of Mac. “What we are seeking are proper market conditions in which this competition is allowed. The experience of other markets that are genuinely efficient and competitive suggest that an acceptable commission rate would be quite small — probably in the low single-digit percentage.”
Apple and its control of the App Store
Apple faces similar complaints about its control of the App Store around the world. The European Union last month accused Apple of enjoying an unfair advantage over Apple Music rivals because of Cupertino’s tight control of the App Store’s commission system. Regulators in Australia and Russia surfaced similar complaints.
In the United States, Apple is currently battling Epic Games over a related matter. Apple booted the Fortnite-maker out of the App Store due to Epic’s decision to offer in-app purchases through its own channel, without paying Apple its share.
Cupertino has long railed against developers it views as not paying their share to gain access to the App Store platform. Nonetheless, Apple has taken some steps that could be interpreted as softening its stance. In late 2020, Apple dropped its App Store commission from 30% down to 15% for the majority of developers. It also downgrades its own products in App Store search results.
Do you think Apple abuses its position with its ownership of the App Store? How much do you think it should charge for commission? Let us know your thoughts in the comments below.