Apple is being sued for a staggering ?1.5 billion (~?15.5 thousand crore) in a landmark class action lawsuit that accuses the tech behemoth of overcharging nearly 20 million UK residents for purchases made via its App Store.
The claim, filed at London¡¯s Competition Appeal Tribunal on Monday, alleged that Apple deliberately shuts out potential competition and forces ordinary users to use Apple¡¯s own payment processing system, generating illegally excessive levels of profit for the company.
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¡°This is the behaviour of a monopolist and is unacceptable,¡± says Rachael Kent, the lead claimant in the case and a professor at King¡¯s College London in a statement. ¡°Apple has no right to charge us a 30% rent for so much of what we pay for on our phones--particularly when Apple itself is blocking our access to platforms and developers that are able to offer us much better deals.¡±
Until recently, the iPhone maker used to charge a 30 per cent commission on purchases made on the App Store and would take additional fee from developers for several in-app purchases.?
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However, after facing a backlash from regulators and developers alike, Apple lowered its App Store commission to 15 per cent earlier this year for developers who generate $1 million in annual revenue from their apps and those new to the store.
Apple described the lawsuit as ¡°meritless¡± and said that the commission charged by the App Store is similar to all other digital marketplace.
¡°In fact, 84% of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15%," the company told Bloomberg in a statement.
The claimants also argue that the restrictive terms Apple imposes on app developers damage app purchasers¡¯ interests and break competition law.
This new lawsuit is yet another legal headache for the tech giant, which is already battling Fortnite-developer Epic Games in one of the most closely watched antitrust trials in the tech industry in years. But the UK lawsuit is focused on the alleged harm caused to customers rather than developers.
Any UK iPhone or iPad user who purchased paid apps, paid subscriptions or made other in-app purchases within the UK version of the App Store at any point since October 1, 2015 is entitled to compensation, the lawsuit adds.