Apple Loses Landmark £1.5bn Legal Battle
Apple has lost a landmark £1.5bn legal battle in the UK over claims it charged "excessive" prices on its App Store. The verdict was handed down in London after the Competition Appeal Tribunal found the tech giant had abused its market dominance by overcharging developers and shutting out competitors.
Background of the Case
The class action lawsuit was filed on behalf of around 20 million British iPhone and iPad users and opened the door to a potential £1.5 billion in compensation. However, Apple says it will appeal, meaning payments are not yet guaranteed. Rachael Kent, a lecturer at King’s College London who led the case, accused the company of making "exorbitant profits" by blocking competition in app distribution and in-app purchases.
Criticisms from Developers
For years, developers like Spotify and Epic Games have criticized Apple for charging commissions of up to 30 percent on app sales. The company insists the fee helps cover marketing, sales, and security, while smaller developers charge less.
Implications of the Ruling
Yesterday’s ruling is the first major mass action against a tech giant to be brought under the UK’s class action regime and could trigger similar proceedings against other companies. Ms Kent said: "This case proves that the UK’s collective action system works. It gives ordinary people and small businesses the opportunity to hold even the most powerful corporations to account." “Today’s ruling sends a clear message: no company, no matter how wealthy or powerful, is above the law.”
Apple’s Response
An Apple spokesperson said: "We thank the tribunal for its considerations, but we strongly reject this ruling as it presents a flawed view of the thriving and competitive app economy." “The App Store faces strong competition from many other platforms – often with far weaker privacy and security measures – and offers developers and consumers many ways to create, share and download apps. “We intend to appeal.”
Ongoing Disputes
The ruling deepens Apple’s ongoing dispute with British authorities over data protection regulations. The government has demanded the company weaken its iCloud encryption, but Apple refused, opting instead to source its advanced privacy features from the UK. Despite the controversy, Apple says it has doubled its investment in the UK to £18 billion in the last five years and now supports more than 550,000 jobs in the UK through its workforce and suppliers.
Past Legal Challenges
Apple has faced a number of major legal and regulatory challenges over the years. In Epic Games vs. Apple (USA, 2020), the maker of Fortnite accused Apple of operating an illegal monopoly through its App Store, sparking a global legal battle over developer fees. In 2024, the European Union fined Apple nearly €1.8 billion for blocking music streaming competitors like Spotify from promoting cheaper options outside of its App Store. In the battery throttle scandal (2017), Apple admitted to making older iPhones slower, leading to multiple lawsuits and settlements worth hundreds of millions of dollars in the US. In 2023, Apple faced an antitrust class action lawsuit against Apple Pay for overcharging banks to use its digital wallet service. Additionally, in 2022, Dutch regulators fined the company millions of dollars for not allowing dating apps to use alternative payment methods.
