Apple Slammed Class Lawsuit Involving Over $1B In Damages

The lawsuit accuses Apple of abusing its dominant position by imposing an "anticompetitive" 30% fee on in-app sales made by app developers on its iOS App Store.

Apple Slammed Class Lawsuit Involving Over $1B In Damages - SurgeZirc NG
Apple Slammed Class Lawsuit Involving Over $1B In Damages

Apple is facing a class-action damages claim on behalf of UK-based developers, seeking a compensation payout of up to £800 million ($1 billion).

The lawsuit accuses Apple of abusing its dominant position by imposing an “anticompetitive” 30% fee on in-app sales made by app developers on its iOS App Store.

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The litigants argue that this fee deprives developers of funds that could be invested in research and development to drive app innovation, leading to a loss for UK consumers.

Sean Ennis, a professor of competition policy, is spearheading the class action on behalf of over 1,500 UK-based developers.

He believes that Apple’s behavior is deeply problematic and aims to obtain redress for those harmed by it.

The lawsuit operates as an opt-out class action, meaning that UK-based developers will be included automatically if the litigants succeed against Apple.

The damages due per developer would be calculated based on their iOS app business, potentially resulting in significant payouts.

The core argument presented by the litigants echoes concerns raised by other prominent companies, such as Spotify and Epic, who have challenged Apple’s fees and policies.

Apple contends that its fees enable it to maintain a premium experience for iOS users by reviewing apps for security and privacy concerns.

The law firm Geradin Partners is supporting Ennis in bringing the suit.

They will focus on various elements, including the non-uniform application of fees and additional charges, such as the annual program fee and the need for developers to pay for search ads.

The litigants argue that Apple’s market dominance allows it to collect excessive commissions and monetize the App Store through multiple routes.

The lawsuit comes amid ongoing investigations by competition regulators, including the UK’s Competition and Markets Authority (CMA).

While regulators have taken action in some markets, Apple has yet to face significant regulatory repercussions for its 30% charge.

The litigants hope their suit can be combined with an existing consumer damages-focused App Store suit filed in 2021, seeking £1.5 billion in damages on behalf of UK consumers.

The litigants are not waiting for the CMA’s investigation to conclude and believe that they have sufficient evidence to proceed independently.

By seeking compensatory damages, the litigants aim to address past anticompetitive behavior by Apple, which they believe has harmed app developers.

They consider this approach complementary to the corrective measures that competition authorities may take in the future.

The class-action lawsuit is confident in establishing commonality among developers affected by the 30% commission and believes that proving harm linked to antitrust abuse should be more straightforward than in privacy-related cases.

The legal discovery process is expected to provide additional data needed for the claim.

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Despite the CMA’s investigation, there has been no public enforcement action yet, and it remains unclear when a decision will be reached.

The litigants are determined not to wait indefinitely for the CMA and are moving forward with their class-action suit to seek redress for developers affected by Apple’s fees and policies.

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