Apple is facing a lawsuit for $1.8 billion, claiming that users of the British app store were overcharged.

Apple was already facing a lawsuit for $1 billion on behalf of British developers, but it is now facing an even larger lawsuit on behalf of UK app buyers.

Both lawsuits have the same foundation - that Apple abuses its monopoly control over the sale of iPhone apps to impose excessive commissions...

A £1M Legal Battle

The $1 billion lawsuit filed on behalf of developers was submitted in July 2023. Apple tried twice to get it dismissed, but both attempts were rejected.

The central argument is that until recently, the only way a developer could sell an iPhone app and content within the app was through the official app store. This granted Apple monopoly power over the same iOS apps, allowing it to set its own commission rates that developers had to accept.

This changed at some point in both the EU and the US, but not yet in the UK. Apple first tried to support the argument that the British court had jurisdiction because many British apps were sold in the US and elsewhere, but the judges rejected this argument as the impact was felt in the UK. A second attempt to have the case dismissed failed last month.

£1.8B Consumer Dispute

The Guardian reports that Apple is now facing a second legal proceeding, this time accusing consumers of being overcharged due to developers' need to cover Apple's excessive commission fees.

Apple will appear in court on Tuesday accused of overcharging British customers through its App Store [...]. The complaint is filed against the company by Dr Rachael Kent, a London King’s College academic, on her own behalf and on behalf of around 19.6 million other iPhone and iPad users in the UK [...]

Kent said: "Apple has no right to make us pay a 30% tax for anything we buy on our phones – especially when Apple itself blocks our access to platforms and developers who could offer us much better quotes. That's why I'm taking this action."

Apple rejects this claim, stating that its commissions are in line with industry norms and that small developers pay even less.

The fees imposed by the App Store are very comparable to those imposed by all other digital markets. In reality, 85% of apps on the App Store are free and developers pay nothing to Apple. And for the majority of important developers who pay a commission to Apple because they sell a good or digital service, they are eligible for a commission rate of 15%.

The case began this morning and is expected to last seven weeks.

Photo of Battersea Power Station, housing Apple's British offices: Laurence Mackman/CC4.0