Apple Inc (NASDAQ:AAPL) is facing a US$1bn (£785mln) class-action lawsuit from UK app developers over the ”abusive pricing” of its App Store commissions.
Led by Professor Sean Ennis from the University of East Anglia Centre for Competition Policy, the call-action represents 1,566 app creators who are challenging the tech giant's "excessive" charges.
Apple typically takes a 30% cut of all App Store sales, a fee Ennis says is “excessive, and only possible due to its monopoly on the distribution of apps onto iPhones and iPads”.
“The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers," said Ennis.
App Store draws in up to US$50bn per year in sales, meaning Apple stands to generate as much as US$15bn in revenues.
Since Apple does not spin out exact App Store revenues in its earnings reports, these numbers are just estimates, but it is not the first time Apple has been accused of anti-competitive behaviour.
In March 2021, the UK Competition and Markets Authority (CMA) launched an ongoing investigation into suspected breaches of competition law by Apple in relation to the terms and conditions governing app developers’ access to Apple’s App Store.
Andrea Coscelli, chief executive of the CMA, previously stated: “Millions of us use apps every day to check the weather, play a game or order a takeaway.
“So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny.”