Apple is levelling “abusive pricing” against app developers, according to a new class action lawsuit worth £785 million ($1 billion or €915 million). The tech giant has long faced criticism over the 15-30% commissions that it charges some app makers for an in-app payment system.
Sean Ennis, who has brought forward the UK lawsuit at the Competition Appeal Tribunal, described Apple’s charges as “excessive and only possible due to its monopoly on the distribution of apps onto iPhones and iPads.” He is a professor at the Centre for Competition Policy at the University of East Anglia as well as a former OECD economist.
1,566 app developers are represented by the lawsuit, which strikes at the heart of rows over Apple’s dominance of the mobile tech sphere. The company has previously said in defence that 85% of developers on its App Store do not pay any commission and that its services grant European creators access to customers in 175 countries around the world. The newspapers reporting on this class action were, however, unable to receive any official comment from Apple.
According to Professor Ennis:
The charges are unfair in their own right and constitute abusive pricing. They harm app developers and also app buyers.
His lawsuit was followed by another this week, also at the UK Competition Appeal Tribunal. This action is seeking £500 million from Apple and Amazon, which it claims struck a deal in 2018 to keep the prices of products including iPhones and Beats headphones artificially high on Amazon’s online store. Christine Riefa, a law professor at the University of Reading, who is leading this new case, argues that “big businesses like Apple and Amazon should behave fairly and compete on merits, not by using underhand tactics.”
Amazon responded that the claim, which is said to have affected seven million Britons, was “without merit.” The results of both cases could have significant implications for the state of control in the tech world.
