Apple faces $1 billion lawsuit

A class action lawsuit has been filed against Apple on behalf of UK-based developers. In the lawsuit filed by the app developers, Apple is accused of abusing its sovereign position. Behind this accusation lies the high commission rate the technology giant receives from in-app sales in the App Store.

Big lawsuit against Apple

Apple has been the target of a £785m ($1bn) class action lawsuit filed by more than 1,500 UK app developers over App Store fees. Revenues for Apple’s services business, which includes the App Store, have continued to grow rapidly over the past few years. According to recent reports, Apple’s services wing currently generates around $20 billion in revenue per quarter.

Although the App Store is a money printing machine for Apple, there is discomfort on the other side of the coin. Many developers complain that Apple charges them up to 30 percent for using the in-app payment system. Apple is also on the radar of regulatory agencies.

Abuse of dominant position

Apple previously said that 85 percent of developers in the App Store do not pay any commissions, helping European developers reach markets and customers in 175 countries around the world through the App Store. The lawsuit filed in the Competition Court of Appeals in England was filed on behalf of 1,566 app developers. In the statement made, it is emphasized that the commission received by Apple is excessive, and it is stated that it can do this thanks to its dominant position.

The lawsuit, on the other hand, is a class action lawsuit, meaning that UK-based developers do not need to register to participate in any potential gains. If the plaintiffs prevail against Apple, the level of compensation payable per developer will be calculated based on iOS app jobs – so payouts can vary widely and in some cases even be millions of dollars.

Companies like Spotify and Epic have been opposing Apple’s unfair “tax” for years. Both firms have filed their own high-profile complaints to regulators and courts on both sides of the Atlantic against App Store policies and fees, with varying degrees of success. Even Elon Musk described Apple’s commission on in-app purchases as a de facto global tax on the internet.