Apple Loses UK Antitrust Lawsuit Over App Store Fees, Faces £1.5 Billion in Damages

[MacRumors]

Apple engaged in anticompetitive behavior by charging App Store developers "excessive and unfair prices" for app distribution services, the UK's Competition Appeal Tribunal (CAT) ruled today [PDF] (via Reuters).

The Tribunal found that Apple abused its market power by overcharging developers from October 2015 through the end of 2020. Developers were forced into using Apple's in-app purchase system and had no alternative to paying up to a 30 percent commission during that time period. The excessive fees ultimately led to higher prices for consumers.

According to the CAT, Apple had a monopoly over iOS app distribution and in-app payments. Apple's argument that Android and other platforms were viable alternatives for consumers and developers was rejected. The Tribunal also did not accept Apple's argument that its rules and fees were required for user security and privacy.

The end of 2020 in the UK's timeline corresponds with the launch of the App Store Small Business Program that saw Apple reduce App Store fees for independent developers and small business owners. The program reduced the commission that Apple collected from developers earning under $1 million per year to 15 percent, down from 30 percent. It's also when Apple began implementing other App Store changes in response to cases like Epic Games v. Apple.

The class action lawsuit was first filed in 2021 by Kings College London academic Dr. Rachael Kent, and the claim seeks up to £1.5 billion in damages. The period between 2015 and 2020 was selected in order to determine how much Apple will need to pay to UK consumers.

A damages trial is scheduled for November. Apple said it will appeal the ruling.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Loses UK Antitrust Lawsuit Over App Store Fees, Faces £1.5 Billion in Damages

 

[germanbeer007]

Cool, so Sony, Microsoft, and Nintendo should be next, right? Or is it Apple because you made some arbitrary distinction that the App Store is nothing like the others...?

 

[turbineseaplane]

Time to pull out of the UK.

And the EU, Brazil, Australia, Japan, China…


Might be easier to just close down Apple actually.

Anything other than “giving an inch” to the cabal of jurisdictions asking for “more fairness”.

 

[justanotherdave]

I’d like Apple to simply drop fees for Apps down to a level of 5/10%. That would completely shut these 3rd party store advocates.

But then Apple would have a new problem. They’d be accused of monopolistic behavior by undercutting 3rd party store fees and agin get sued.

Basically Apple loses either way and someone pockets money (but not the actual consumers).

 

[Rodney Williams]

Cool, so Sony, Microsoft, and Nintendo should be next, right? Or is it Apple because you made some arbitrary distinction that the App Store is nothing like the others...?

Good point. Thinking the exact same thing. Makes you wonder.

 

[turbineseaplane]

Cool, so Sony, Microsoft, and Nintendo should be next, right? Or is it Apple because you made some arbitrary distinction that the App Store is nothing like the others...?

Somebody has to file that class action lawsuit.

Apparently that has not happened so it’s not really relevant at this time.

 

[turbineseaplane]

I’m sure Apple will complain to the Trump administration.

It was reported today, by the White House, that Apple is helping pay for the White House ballroom addition.

Absolutely disgusting to see

 

[code-m]

Wishing upon a star that one day Apple opens up the AppStore in Canada like it was forced to in the EU. While I like the build quality of Apple hardware and the software has its ebbs and flow it still feels very restrictive that I am unable to install some apps that are offered free on the PlayStore.

While counter-arguments can claim I can just go to the AndroidOS camp does that mean Apple will provide me a full refund or even prorated to purchase an Android device. Once again a simple change to the policy and the software can run without hassling the customer and this stance by Apple seems passive aggressive and outright opposite of its green initiative.

 

[User 6502]

Good point. Thinking the exact same thing. Makes you wonder.

It only makes you wonder if you don’t understand the difference between a game console and a general purpose device.

 

[turbineseaplane]

It only makes you wonder if you don’t understand the difference between a game console and a general purpose device.

Yeah, these are totally different topics.

I’m fine with people going after game consoles too, but it’s not relevant to this discussion at all.

There’s a difference in kind between these categories.

 

[code-m]

It only makes you wonder if you don’t understand the difference between a game console and a general purpose device.

People have some weird justification when it comes to Apple, if you swap the name with another tech company the tone will be different.

 

[germanbeer007]

Somebody has to file that class action lawsuit.

Cool so it's just an arbitrary distinction.

 

[surferfb]

It only makes you wonder if you don’t understand the difference between a game console and a general purpose device.

I mean, the vast majority of in app purchases are games. Like 65-70% of App Store revenue and 75% of in-app purchase revenue comes from games. So, you could make a strong argument that the iPhone is a portable game console that lets you do other things too, and you should be mad at Sony/Microsoft/Nintendo for not allowing non-games on their game consoles.

 

[turbineseaplane]

People have some weird justification when it comes to Apple, if you swap the name with another tech company the tone will be different.

Everyone will deny it, but this is absolutely true.

I’m not even sure how to get people to realize it.

It’s kind of like how one’s own family member gets the benefit of some inherent bias that is impossible to remove.

 

[JCCL]

Cool, so Sony, Microsoft, and Nintendo should be next, right? Or is it Apple because you made some arbitrary distinction that the App Store is nothing like the others...?

Not exactly the same though. You can still buy physical games from a variety of different outlets (problably the only reason why they want to keep phyisical as an option)

 

[germanbeer007]

It only makes you wonder if you don’t understand the difference between a game console and a general purpose device.

Video game software cost more to develop (orders of magnitude more) and cost more to purchase than general purpose device apps so, why should game consoles get a pass if we're doing it for developers and consumers?

 

[code-m]

Cool so it's just an arbitrary distinction.

Wake me up when you can make phone calls, surf the web, etc on a Nintendo Switch/2 or others like a computer.

 

[germanbeer007]

Not exactly the same though. You can still buy physical games from a variety of different outlets (problably the only reason why they want to keep phyisical as an option)

Sony/Microsoft/Nintendo still get a cut from (and fully control) those new physical games. In fact, developers/publishers receive less payout compared to digital releases. Not to mention users will then re-sell physical copies, further cutting into developer/publishers revenue stream. This ultimately forces developers/publishers to do nefarious things like shutting down games early to force consumers to buy the newest game, or cut content from the base game and sell as DLC, etc...hurting consumers in the long term. So I don't see how Apple should be treated differently.

 

[surferfb]

Not exactly the same though. You can still buy physical games from a variety of different outlets (problably the only reason why they want to keep phyisical as an option)

Not actually true (there are digital-only consoles) And they all still pay 30% to Sony/Microsoft/Nintendo. Somehow I don't think people arguing to "open up the app store" would be ok if Apple still got to charge their 15-30% on apps purchased on third party stores.

 

[turbineseaplane]

Wake me up when you can make phone calls, surf the web, etc on a Nintendo Switch/2 or others like a computer.

Or do your banking or are required to use certain apps for your work, insurance, living situation, etc.

Game consoles and that whole market have nothing to do with the smart phone conversation.

 

[diddl14]

This is just so sickening.

I put my first app on the App Store more than 10 years ago. Without Apple, I would never have been able to achieve such enormous market reach. The whole sales process, taxation, and even refunds became a no-brainer. The 30% commission was never an issue.

Would I have made my app cheaper if the commission had been only 5 or 10%? Or used another store provider with a lower commission? I don't think so.

All of this is just a non-issue and it’s outrageous that legislators believe they have to cash in on Apple "on behalf of developers and consumers."

 

[germanbeer007]

Wake me up when you can make phone calls, surf the web, etc on a Nintendo Switch/2 or others like a computer.

1. Arbitrary distinction
2. PS Vita did that, even with a cellular plan too. No one cared.

 

[turbineseaplane]

I put my first app on the App Store more than 10 years ago. Without Apple, I would never have been able to achieve such enormous market reach. The whole sales process, taxation, and even refunds became a no-brainer. The 30% commission was never an issue.

The market reach is not because they have the App Store locked down as the only option to source Apps.

 

[germanbeer007]

Or do your banking

Can literally do banking on my PS5.

 

[con2apple]

games. So, you could make a strong argument that the iPhone is a portable game console that lets you do other things too

A very weak argument. Just because games are a huge part of the apps doesn’t make the iPhone a game console.

Seriously. Your "arguments" to somehow portray Apple as an innocent victim are no longer funny.