Apple [APPL:US] is facing a class-action antitrust lawsuit in the UK, filed by more than 1,500 app developers, as reported by TechCrunch on July 25. The lawsuit alleges that Apple is abusing its dominant position by charging app makers excessive commissions, typically 15% to 30%, for app developers to use the in-app payment system on the App Store. The developers argue that these charges are “anti-competitive” and hinder their access to vital capital that could be used for research and development to foster app innovation. The lawsuit seeks compensation of up to GBP800m (USD1bn) for the affected app developers.

Apple has consistently denied claims of imposing unfair commissions on app developers, contending that its fees are necessary to provide iOS users with a premium experience. However, the lawsuit highlights that Apple’s net revenue from App Store was estimated to be around USD15bn in 2020, while the operating costs for the store were less than USD100m annually. In response to increasing regulatory scrutiny, Apple previously reduced the fees for smaller app developers. Apple claims that around 85% of developers on the APP Store do not pay any commission, and the fees are applied to only 15% of apps that sell digital goods and services through in-app purchases or paid application downloads.

Sources:

https://www.reuters.com/technology/apple-faces-1-bln-uk-lawsuit-by-apps-developers-over-app-store-fees-2023-07-24/

https://www.macrumors.com/2023/07/25/apple-uk-antitrust-lawsuit-app-store-fees/

https://techcrunch.com/2023/07/24/apple-targeted-in-app-store-antitrust-damages-suit-thats-seeking-1bn-for-uk-developers/

https://techcrunch.com/2020/11/18/apple-to-reduce-app-store-fees-for-small-businesses-with-under-1-million-in-revenues/