Hi! Thanks for reading. This post looks better in our award-winning app, Tips & Tricks for iPhone.
Apple isn’t exactly known for its low prices, being a company that makes high-quality products and sells them for a premium. But that’s not the focus of a class action lawsuit filed in the UK against the company. Instead, it claims that Apple’s “unfair” 30% cut of developer sales on the App Store results in consumers being overcharged for app purchases. The suit is hoping for a payout for almost 20 million UK citizens to the tune of around £1.5 billion in total.
According to a report from the BBC, the lawsuit alleges that Apple’s app sales commission is “an abuse of dominance and unlawful.” According to the suit, filed by Dr Rachel Kent from Kings College London, Apple’s stranglehold on iOS app sales is “behaviour of a monopolist and is unacceptable.” That’s because on an iPhone or iPad, there is no other (legal) way to buy an app or in-app purchase aside from Apple’s own App Store.
Compare that to Android, where Google’s Play Store charges a similar cut of app sales – but alternative app stores are permitted, and so apps are not forced to use Google’s payment processing system if they don’t want to. Of course, Android phones are fragmented between dozens of phone makers and so it would be near-impossible for Google to order otherwise. By comparison, Apple designs the hardware and the software for its devices and argues that its single, safe place to buy apps is all part of the package that makes iPhone and iPad ownership so appealing.
This kind of complaint about how Apple does business isn’t new. But the monopoly argument is back in fashion as Apple squares off against Epic Games in a three-week court battle about the App Store’s so-called anti-competitive practices.
So what does Apple think of this latest lawsuit? We’ll let the company speak for itself; here’s Apple’s full statement of retaliation:
“We believe this lawsuit is meritless and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the UK’s innovation economy. The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces. 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%.”
Regardless of who you agree with here, it’s unlikely anything will come to pass from this lawsuit. But if it does? Readers in the UK may be in line for a juicy payday.