Trial over Apple App Store 'surcharge' opens in UK

LONDON (AFP) — Apple was accused Monday of abusing the dominant position of its app store at the start of a court trial in the U.K., with plaintiffs seeking £1.5 billion ($1.8 billion) in damages.

The complaint, filed in May 2021, accuses Apple of breaching European and U.K. competition laws by “its exclusion of any other app stores from iOS devices” like iPhones and iPads.

The case, which Apple has called “meritless,” has been brought by King’s College London academic Rachael Kent and the law firm Hausfeld & Co.

At the opening of the trial, the plaintiff’s lawyer Mark Hoskins outlined that the case is being brought by Kent “on behalf of all iOS mobile device users.”

“By virtue of its terms and conditions, Apple has excluded all competition,” he said, outlying the issue at the center of the case.

In arguments given by Apple, the company insisted that Kent’s case that that the company “occupies a dominant position is entirely dependent upon her narrow market definition.”

“Apple is not dominant, even in Dr Kent’s alleged markets. All of the evidence demonstrates that Apple is competitively constrained by the competition which it faces from alternative device manufacturers and alternative transaction channels,” the tech giant added.

The complaint claims that some 20 million Apple users may have been overcharged by the company “due to its ban on rival app store platforms.”

The complainants said a “30% surcharge” that the company “imposes” on apps purchased through Apple’s App Store comes at “expense of ordinary consumers.”

The trial is set to last seven weeks at the Competition Appeal Tribunal in London.

‘Unwavering commitment to consumers’

At the heart are accusations that Apple used the App Store to exclude competitors, forcing users to use its system and boosting profits in the process.

“The 30% surcharge relates to most of the applications that you’re going to be using when you’re downloading and making in-app purchases on the App Store,” Kent told AFP, citing dating platform Tinder as an example.

However, it does not apply to applications offering physical products such as the delivery services Deliveroo and Uber Eats, the academic said.

Any user who purchased applications or subscriptions in the British version of the App Store between Oct. 1, 2015, and Nov. 15, 2024, may be entitled to compensation from Apple, said Kent, a lecturer in the digital economy.

The claim seeks total estimated damages of £1.5 billion.

According to British law, in this type of class action, all potentially affected persons are included in the procedure by default, and may benefit from possible compensation, unless they voluntarily opt out.

Apple has referred to a 2022 statement in which it said 85% of the applications on the App Store are free.

The company also insists that the commission charged by the App Store is “very much in the mainstream of those charged by all other digital marketplaces.”

Multiple challenges

Investigations and complaints against Apple have multiplied around the world in recent years, particularly regarding its app store.

The American behemoth is the subject of another complaint worth £785 million related to rates charged to app developers.

Last June, the European Commission accused Apple of breaching its digital competition rules by preventing developers from “freely steering consumers to alternative channels” other than the App Store.

Apple then agreed to relax its rules, announcing in August that iPhone and iPad users in the European Union could delete the App Store and use competing platforms.

“They’re responding to these investigations and also being told what to do,” said Kent. “I don’t think they’re going to do it voluntarily, which I think is why it’s really important to bring these collective actions.”

—

By OLIVIER DEVOS Agence France-Presse