Key Points
- A UK tribunal has ruled that Apple abused its dominant position with its App Store fees.
- The court found that Apple’s commissions were “excessive and unfair.” The ruling came in a mass lawsuit brought on behalf of millions of UK consumers.
- Apple could be on the hook for hundreds of millions of pounds in damages.
- The decision is a major blow to Apple and a big win for the UK’s new class-action legal system.
A London tribunal has ruled that Apple abused its dominant position by charging app developers “excessive and unfair” commissions, a major blow to the tech giant that could see it paying out hundreds of millions of pounds in damages. The landmark ruling came in a mass lawsuit brought on behalf of millions of iPhone and iPad users in the UK.
The Competition Appeal Tribunal (CAT) found that Apple had used its monopoly power to shut out competition and overcharge developers. The case, valued at around £1.5 billion ($2 billion), argued that Apple’s “100% monopoly” enabled it to impose restrictive terms and high commissions, which were then passed on to consumers.
The tribunal agreed, ruling that developers were overcharged by the difference between a “fair” commission of 17.5% and the 30% that Apple typically charges. The judges also found that half of this overcharge was passed on to consumers through higher prices.
Apple, which is facing similar regulatory pressure in the U.S. and Europe, said it will appeal the ruling, calling it a “flawed view of the thriving and competitive app economy.”
This is the first major mass lawsuit against a tech giant to go to trial under the UK’s new “class action” style legal system, and it’s being hailed as a major victory for consumers. “This ruling sends a clear message: no company, however wealthy or powerful, is above the law,” said the academic who brought the case.
