Apple may have to pay $1.9B in damages to British consumers for charging unfair commissions
For years, consumers with Apple devices have been overpaying for apps and subscriptions because Apple charged developers an exorbitant commission. The American tech company most likely has to pay hundreds of millions of dollars in damages to compensate British consumers.
For years, consumers with Apple devices have been overpaying for apps and subscriptions because Apple charged developers an exorbitant commission. The American tech company most likely has to pay hundreds of millions of dollars in damages to compensate British consumers.
The Competition Appeal Tribunal, a British court that hears competition cases, ruled that Apple abused its dominant position from October 2015 until the end of 2020 by “charging excessive and unfair prices” as commission to developers, leaving little to no room for competition in the app distribution market.
The commission fees affected both app developers and consumers, who had to pay higher prices for in-app items, subscriptions, and other digital purchases.
According to the Tribunal, Apple’s commissions weren’t allowed to exceed 17.5% for app purchases and 10% for in-app payments. However, in practice, the commission fees amounted to 30%. The court ruled that half of the difference was passed on to consumers by developers. Therefore, users should receive compensation.
The Competition Appeal Tribunal has yet to determine how much Apple has to pay in damages, but it could amount to a total of around £1.5 billion, or approximately $1.9 billion. This will happen next month.
An Apple spokesperson told Reuters it would appeal the court’s ruling, stating that the App Store helps developers succeed and offers consumers a “safe and trusted place to discover apps and securely make payments.”
The United Kingdom is not the only country where lawsuits are pending against Apple over alleged anti-competitive practices involving the App Store.
Earlier this year, a Dutch court ruled that Apple was hindering dating apps from using alternative payment methods in the App Store and abusing its dominant position to charge excessive commissions.
In Belgium, consumer interest group Testaankoop launched a similar class-action lawsuit for overcharging consumers who want to take out a subscription through the App Store.
Apple is also being sued in the United States for abuse of power and unfair trade practices. The same goes for Apple’s rival Google.
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