Apple is facing a $1 billion class action lawsuit filed by more than 1,500 developers in the United Kingdom over the company's exorbitant transaction fees.
The situation comes as the company charges developers up to a 30% commission on transactions made on its platform. This exorbitant fee has long faced criticism from world governments and developers but has continued to be implemented.
Apple Faces $1 Billion Class Action Lawsuit
The latest legal challenge against Apple Store fees comes from a group of 1,566 app developers in the UK. The group started the lawsuit against the company because the transaction fees were excessive and resulted from Apple's monopoly on its app distribution platform.
In a statement, a professor at the Centre of Competition Policy at the University of East Anglia and a former economist at the OECD, Sean Ennis, said that the company's charges to app developers are only possible due to its majority control on the distribution of apps onto iPhones and iPads, as per Apple Insider.
Ennis added that the charges are unfair in their own right and can already be considered abusive pricing. However, he noted that the transaction fees harm app developers and buyers.
The professor is bringing the class action lawsuit forward to the UK Competition Appeal Tribunal, and he is receiving advice from the law firm Geradin Partners. The situation comes as Apple previously discussed its 30% transaction fee during the Epic Games trial.
The company also said that previously, 85% of developers on the App Store were not paying a commission and that it would be in benefit European developers by giving them access to markets and customers in nearly 200 countries through the App Store.
Exorbitant Transaction Fees
The lawsuit against Apple is an opt-out class action, meaning developers do not have to register for them to be included in any potential winnings. If the lawsuit wins against the tech company, the level of damages due for every developer would be calculated based on their iOS app business. This means that payouts could range widely and go up to millions in some cases, according to TechCrunch.
On the other hand, Apple repeatedly denies accusations that it is profiteering at developers' expense by arguing that the fees enable it to provide users with a premium experience. It also notes that its store administration includes reviewing apps for security and privacy concerns, among other quality controls.
Anglia also criticized Apple for allegedly charging developers an annual program fee that costs $99. He suggested that developers increasingly need to pay the company to buy search ads to have a chance of iOS users discovering their software.
Damien Geradin said that another crucial factor is that even if the fee were removed altogether, the App Store would still exist because the company would not sell a single device without its valuable apps. The class action lawsuit argues that the funds' Apple charges, which litigants claim are excessive, could be put to better use, such as driving innovation, said The Daily Beast.
