Apple facing full trial over anti-competitive App Store practices claim
For Payment App On Purchases Is To 30% Transactions Mission And Forcing Claim In Up Taking Developers Forced Consumers Prices For Use Up To Argues Those Unfair And Has Apple’s Systems
Apple could face a full trial in the UK over allegations it breached competition law by overcharging people for apps on its App Store after the tech giant’s attempt to have a legal claim dismissed was refused.
In a judgment handed down by the Competition Appeal Tribunal, Apple’s argument that the collective action legal claim brought by Dr Rachael Kent on the issue was defective was dismissed, and the case was cleared to proceed.
The legal claim, which was filed last year, accuses Apple of deliberately shutting out the competition in the store and forcing people to use its own payment processing system, generating “excessive” profits for itself in the process.
It argues that forcing developers to use Apple’s payment systems for in-app purchases and taking up to 30% commission on those transactions is unfair and has forced up prices for consumers.
The claim calls for Apple to repay UK customers it says have been overcharged because of the company’s practices, with damages of up to £1.5bn being sought.
It says as many as 19.6m UK users could be eligible for compensation.
According to the claim, any UK user of an iPhone or iPad who purchased paid apps, paid subscriptions or made other in-app purchases within the UK storefront of the App Store at any point since October 1, 2015, is potentially entitled to compensation from Apple.
Increasing scrutiny has been placed on App Store policies in recent months. The UK’s Competition and Markets Authority and the European Commission are separately investigating allegations of anti-competitive behaviour in Apple’s App Store.
“This is excellent news for App Store users in the UK,” Dr Kent said.
“I applaud the Competition Appeal Tribunal for this clear and well-thought-out decision, which demonstrates that the major reforms of the UK’s class action procedures since 2015 are working and that consumers and businesses can now be empowered to uphold their collective rights against abuses of competition law.
“A claim of this magnitude is always going to be heavily defended. The anti-competitive practices that we are alleging against Apple go to the heart of Apple’s business strategy, and with its almost unlimited resources, it will always make this a challenging fight.
“It has required a huge amount of preparation and research to get this far, as well as the assistance of experienced legal experts and economists. It is immensely gratifying to see the tribunal confirm that the claim should proceed.
“We look forward now to progressing the case on behalf of consumers and businesses. We believe, we have a convincing and well-founded argument that Apple’s practices are detrimental to those in the class, and the evidence will support it.”
Apple has not yet commented on the decision.