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More than 1,500 app developers led by Prof Sean Ennis are calling out the tech giant for ‘deeply problematic behaviour’ around its App Store.
Apple has found itself facing a class-action lawsuit brought forward by more than 1,500 developers in the UK over “excessive” App Store fees.
Filed today (25 July), the lawsuit is being spearheaded by Prof Sean Ennis, who teaches competition policy at the University of East Anglia. Ennis is also director of the Centre for Competition Policy at the university and a former senior economist at OECD.
“The fact that users and developers are completely locked into the iOS system and the App Store gives Apple monopoly power, which Apple leverages to charge excessive fees on app developers,” Ennis said in a statement.
“The UK tech industry is being forced to pay an unjustified 30pc premium on the price of the app as well as in-app purchases – money that could be reinvested in the UK’s digital economy.”
Seeking more than $1bn in damages, the lawsuit accuses Apple of abusing its dominant position by charging “anticompetitive” fees of up to 30pc on in-app sales made by App Store developers.
It argues that UK consumers are also being harmed because developers are being deprived of money that could be spent on research to drive forward app innovation.
“I have been studying competition questions for decades – and digital competition for quite a long time. I’ve written about it in technical economic papers but also in less technical work,” Ennis told TechCrunch.
“And I’m really convinced that the type of behaviour we’re talking about in this case is deeply problematic. So, I was interested in taking a role to help get some redress for those who I feel have been harmed by the behaviour.”
This is not the first time Apple is being called out for its allegedly exorbitant commission rates. The EU accused Apple of anticompetitive behaviour two years ago because of high commission fees in the App Store. It found Apple to be in a “dominant position” with its practices and said the fees charged by the company are unfair because its own apps are available in the store too.
Last December, Bloomberg reported that Apple is preparing to let alternative app stores on iPhones and iPads in order to comply with the EU’s Digital Markets Act, which aims to boost competition and is set to come into force in 2024.
Meanwhile, Apple has argued that more than 90pc of the $1.1trn generated by its app ecosystem in total billings and sales last year was commission free and went directly into developers’ pockets. The study was conducted by Analysis Group and backed by Apple.
“More than 90pc of this figure originated from transactions that did not happen through the App Store, meaning that these amounts accrued solely to developers and other third parties and that Apple collected no commission on them,” the report noted.
“The share of billings and sales that accrue solely to developers has continued to increase year-to-year.”
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