£1.5bn UK lawsuit alleges Apple’s ‘excessive’ 30% cut unfairly raised App Store prices

The legal battles surrounding Apple’s App Store continue to mount up. A class action lawsuit was filed this week at London’s Competition Appeal Tribunal, alleging that UK Apple users have been overcharged for apps for years.

The suit argues that Apple’s dominance in the app market enabled it to charge ‘excessive’ fees, citing Apple’s typical 30% commission of paid apps and in-app purchases. If upheld, possible compensation for UK consumers could top £1.5 billion (or about $2 billion).

In a statement to Bloomberg, Apple said it believed the lawsuit is meritless and it welcomes the opportunity to discuss the case in court. The company referred to the fact that 84% of apps on the App Store pay nothing to Apple at all (as they are free and/or do not use In-App Purchase). Apple also acknowledged the 15% reduced commission on subscriptions that last more than one year and for small business developers making less than $1 million in revenues.

However, the App Store Small Business Program was only introduced at the beginning of this year so it is possible the lawsuit can press for commission compensation on prior years.

Of course, at a high level, Apple will argue that the App Store is not anticompetitive. In its ongoing suit with Epic Games, Apple has used the open web as its argument that it does not hold dominant control over apps on iOS. The company has also argued that its store’s commission structure is no different to the likes of PlayStation, Xbox and others.

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