A group of UK developers have sued Apple for overcharging on the App Store and are demanding compensation.
Apple is likely to face tough times in the UK soon, as a group of over 1,500 developers in the UK are suing the company for $1 billion in damages. This complaint deals with the issue of App Store fees.
British developers have accused Apple of abusing market dominance by charging 15-30 percent of in-app payments. This policy has long been criticized by different regulators in different countries.
App Store fees hurt developers and consumers
The class-action lawsuit says the App Store’s policies harm consumers by taking away a portion of developers’ revenue, preventing more research and development on apps, and helping to increase innovation in the industry.
The current complaint was filed by Sean Ennis, a professor at the Center for Competition Policy at the University of East Anglia. On behalf of developers, he says: “The fees that Apple charges app developers are too high; An income that is only possible due to the monopoly of this company on the distribution of apps on iPhone and iPad. These costs are unfair and lead to inappropriate pricing. “They hurt app developers as well as app buyers.”
The lawsuit is structured so that developers do not need to register if they win. If Apple loses the case, the compensation received by developers will be automatically calculated based on the size of their business.
The law firm Geradin Partners, which will be in charge of filing the case in court, says it will defend the right of the developers based on several points. Apple doesn’t charge the same fee for all apps, the company says. Apps that have digital content, games, news apps, and streaming services pay the most fees, while the rest of the apps do not pay any special fees.
Geradin notes that the company also charges $99 per year from developers for subscriptions. Additionally, developers are increasingly forced to buy search ads to get their app seen in the App Store.
The App Store’s policies are under review by several competition regulators, including the UK’s Competition and Markets Authority (CMA). But this company has not yet faced a major legal challenge in this field.