What just happened? Apple has spent years battling lawsuits and hefty fines from governments over its app store policies. A new collective-action lawsuit in the United Kingdom adds another $2 billion to the Cupertino giant's mounting legal bills, this time over its widely criticized commission fees.
The United Kingdom's Competition Appeal Tribunal ruled that Apple abused its dominant position by imposing onerous commission fees on app developers, passing unnecessary costs onto consumers. As a result of the country's first mass-action lawsuit, the tech giant must pay up to £1.5 billion ($2.01 billion US).
British academic Rachel Kent filed the lawsuit on behalf of 20 million iPhone and iPad owners in the UK, arguing that the Apple App Store's standard 30-percent cut on all purchases is excessive. While Apple claimed that 85 percent of developers pay nothing, services such as Spotify have said the fees hurt their business.
The ruling declares that UK users are entitled to hefty damages. Apple has pledged to appeal the judgment, and a hearing next month will determine how much each claimant will receive. If all plaintiffs claim their share, it should work out to about £75 ($100) per person.
The case is one of many in which regulators from the United Kingdom, European Union, United States, and other regions are challenging Apple and Google's restrictions on mobile app distribution and payment processing. Earlier this year, Apple lost a long-running legal battle against Epic Games in the US, forcing the company to loosen its rules on third-party payment processors.
Although Apple made sweeping changes to its App Store policies under protest to comply with the EU's Digital Markets Act, regulators deemed the measures insufficient and continued issuing fines. The company appealed a $580 million DMA penalty in July, insisting its restrictions are essential for device security.
App developers and lawmakers have pushed Apple and Google to permit third-party app stores and sideloading on mobile devices. Earlier this year, members of Congress introduced two bipartisan bills that would compel Apple to open its platform.
Meanwhile, Meta, Spotify, and other developers have formed a coalition to challenge what they describe as a duopoly of mobile software walled gardens. A recent survey suggests that most developers expect third-party app stores to drive growth in the coming years. Apple's restrictions on web browser engines have drawn similar criticism, with developers arguing that many apps wouldn't exist if iOS browsers were less restricted