Apple’s £1.5bn class action lawsuit begins in UK courts

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The first trial stemming from a wave of UK antitrust cases against Big Tech is due to begin on Monday as Apple faces a £1.5bn lawsuit charging “excessive and unfair” claims in software downloaded from its app store.

Without a last-minute solution, the iPhone maker will launch a court case at the UK’s Antitrust Appeal Court over allegations that it abused its dominant market position to charge commissions of 30 percent on purchases on the market of the App Store.

A seven-week trial, in which Apple’s chief financial officer has just been appointed Kevan Parekh it is due to provide evidence, it is the latest in a growing list of legal problems facing Big Tech companies around the world.

In the United States, the Department of Justice has brought the case against Apple saying its App Store rules hindered competition. However, Apple has come a long way harmless from the legal battle over the App Store with Fortnite creator of Epic Games which started in 2020 and ended early last year.

Antitrust lawyers and the litigation finance industry that support such cases will scrutinize the CAT cases as they try to assess the chances of success for several other antitrust cases. against tech groups including Alphabet, Microsoft and Meta.

The case against Apple, brought on behalf of millions of UK consumers, comes after major setbacks last month for two other class action lawsuits.

Telephone operator BT fight each other case that it overcharged mobile customers, while Mastercard stay a dispute over card charges for £200mn – a small fraction of the £14bn the plaintiffs had originally sought.

A a series of claims have been made, many of them against technology companies, under UK laws introduced over the past decade that allow for a wide range of legal actions for infringement of competition law.

However, the lawsuits have been hampered by lengthy procedural disputes, and the case against Apple is the first in this sector to go to trial.

The protesters, led by “group representative” Rachael Kent, a lecturer at King’s College London, say Apple has created a monopoly by forcing software developers for devices such as iPhones and iPads to distribute their apps through the store. of the company.

They are seeking £1.5bn from Apple, arguing that “excessive and unfair commissions” charged to developers are passed on to consumers who download software and buy content or digital services within the apps. process.

The lawyers, led by Mark Hoskins KC and Tim Ward KC, are expected to claim that Apple has received “significantly excessive” profits, as the commissions are much larger than they would be if the software it could be accessed by third-party adversaries. in the App Store.

While Apple faces competition from Google and its Android operating system, prosecutors say it has built market power into an ecosystem of hardware and software.

Apple said the case was “without merit”. “The commission charged by the App Store is too much for those charged by other digital markets,” it said when the trial began in 2022.

Many apps are offered free of charge, Apple added, and “the vast majority” of developers are eligible for a reduced 15 percent commission, under rules introduced in 2020 for small businesses that use apps. their operations bring in less than $1mn a year.

Apple is expected to argue that the plaintiffs have defined the market too narrowly as it only includes iOS apps and that it is not reflected in the broader market for transactions and digital devices.

As it faced similar complaints about its App Store policies from Epic Games and music app Spotify, Apple may say its commission is justified by the investment wide that it does on its platform, including not only payment processing but development tools, security. reviews, advertising and curation.