Apple Faces New Class Action in the UK for Anti-Competitive Practices
- Apple now facing a new legal menace in the UK, with a class action going for over $2 billion in damages.
- The claimants are accusing Apple of locking users in cost-raising terms of service in relation to the iOS apps.
- Apple finds that the action is meritless and doesn’t believe it engages in unfair practices.
A class-action lawsuit led by the University of London digital economy lecturer Dr. Rachael Kent is turning up the heat for Apple, which is already swimming in an ocean of legal claims against it. The legal action that represents 20 million users involves damage compensation that goes up to £1.5 billion ($2,120,000,000), an amount that would undoubtedly be enough to move a behemoth like Apple, so it’ll be interesting to see what happens.
Rachael Kent claims that Apple has gradually introduced restrictive and monopolistic policies onto the App Store, and 13 years after its launch, the app market has turned into a locked place that users are forced to use. On top of that, Apple has removed innovative or interesting projects that threatened its monopolistic interests, again forcing users to pick one of Apple’s offerings instead.
And on top of all that, Kent finds that Apple’s 30% cut on everything that iOS users spend on in-app purchases is simply put “unjustified.” The lawsuit backs this up by estimating the cost for running the App Store to be around $100 million per year. Apple made a total of $15 billion last year - so the margin for profit is going beyond what’s logical or what should be acceptable, according to Kent.
Apple has publicly responded to these allegations by saying that 84% of all apps available on the App Store are free, so their developers pay nothing to the American consumer tech giant. Of those who are paying a commission, the vast majority are eligible for the 15% reduced rate that was introduced recently. All in all, Apple sees this as an opportunity to discuss how their business model actually fuels the innovation economy and benefits the UK.
If the court approves of the claimants’ demands, it would mean that 20 million UK-based iPad and iPhone users who have made any purchase on the App Store since October 1, 2015, will be eligible for compensation. If that happens, it will create a precedent to go against Google, which also charges a 30% fee on the Android Play Store. We’re sure that Vannin Capital and Hausfeld and Co., who support this lawsuit, have that possibility in mind.