UK App Store devs want Apple to pay £785m over ‘abusive pricing’

A class action lawsuit from 1,566 UK app developers is claiming £785m in damages. Petter Ahrnstedt and Karen Haslam report

The App Store has seen its revenues grow rapidly in recent years, bringing in around $20 billion per quarter. However, Apple is under fire for the commission it charges app developers to distribute apps on the App Store, and UK developers are the latest to take the company on with a class action lawsuit.

App developers who distribute apps on the App Store have to pay Apple between 15 and 30 percent. Apple has been criticised for charging this commission by app developers and competition

authorities in several countries because apps can only be distributed via the App Store.

1,566 UK app developers are the latest to file a claim with the Competition Appeal Tribunal against Apple, demanding £785 million in damages from Apple. Their case is led by Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia.

Developers are required to pay Apple 30 percent for the first year. However, if a developer makes less than $1 million a year, they can apply to Apple for an exemption from the payment and instead pay a reduced rate of 15 percent a year.

Apple maintains that 85 percent of developers on the App Store do not pay any commission. Apple also set up a Small Developer Assistance Fund to help small developers as part of a settlement in 2021.

This change wasn’t enough to placate competitive authorities around the world who view Apple’s closed App Store as anti-competitive because it is the only way apps can be distributed (which Apple maintains protects users from malware and problematic apps). Apple also maintains that it helps European developers access markets and customers in 175 countries around the world via the App Store.

Sean Ennis says in a statement that “Apple’s charges to app developers are 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”.

Back in 2020, the EU was investigating whether Apple was violating competition laws with the App Store and Apple Pay. Under investigation at that time was

Apple’s 30 percent fee, and the fact that developers aren’t allowed to highlight, within their apps, alternative payment methods for their services. The EU focused on this 30 percent fee being transferred to customers and charged Apple with an antitrust breach in April 2021. In a further probe in 2021, the UK’S Competition and Markets Authority investigated Apple over complaints that the terms and conditions for app developers were unfair and anticompetition.

In 2022, Apple also came under fire for charging developers a $99 fee to distribute apps on the App Store. There is now a free developer tier.