Apple Faces £1.5bn Lawsuit in UK for Alleged App Store Overcharging

A high-stakes legal battle against Apple is set to begin in London on Monday, with plaintiffs seeking over £1 billion in damages. The case, which alleges that the tech giant violated UK and European competition laws, could severely impact the way Apple manages its App Store operations.

The lawsuit, filed in May 2021, alleges that Apple has unlawfully monopolized the iOS ecosystem by blocking rival app stores from its devices, such as iPhones and iPads. The plaintiffs claim that this practice has led to inflated prices, with an estimated 20 million Apple users potentially overcharged due to the company’s exclusionary policies.

At the heart of the case is the “30 percent surcharge” Apple applies to apps purchased or used for in-app purchases through the App Store. According to the complainants, this surcharge harms consumers by artificially driving up prices for digital goods. Rachael Kent, a digital economy expert at King’s College London, and law firm Hausfeld & Co. are leading the charge in the seven-week trial at the Competition Appeal Tribunal.

Kent, who is one of the key figures behind the lawsuit, explained that the 30 percent surcharge affects a wide range of apps, including popular platforms like Tinder. However, apps that provide physical products, such as food delivery services like Deliveroo and Uber Eats, are not subject to this fee.

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The lawsuit seeks an estimated £1.5 billion ($1.8 billion) in damages, which could potentially be paid out to anyone who has purchased apps or subscriptions from the UK App Store between October 1, 2015, and November 15, 2024. Under British law, this class action automatically includes all affected users unless they choose to opt out.

Apple, however, has dismissed the lawsuit as “meritless,” maintaining that its App Store commission is in line with industry standards. In a statement to AFP, the company emphasized that 85 percent of the apps available on the platform are free and defended its practices, citing the positive impact the App Store has had on the UK’s digital economy.

This trial is not an isolated incident for Apple. The company has faced increasing scrutiny globally regarding its App Store policies, with ongoing investigations and complaints about its control over app distribution. In 2022, the European Commission accused Apple of breaching digital competition rules by restricting developers’ ability to direct users to alternative app stores.

In response, Apple announced in August that iPhone and iPad users in the European Union would be allowed to delete the App Store and use competing platforms. However, critics argue that such moves are reactive and the result of mounting pressure from regulators.

For Rachael Kent, the ongoing litigation represents a crucial step toward holding Apple accountable for its practices. “They’re responding to these investigations and being told what to do,” Kent said. “I don’t think they’re going to do it voluntarily, which is why it’s really important to bring these collective actions.”