In a major development on Tuesday, Apple, the tech behemoth, faced a class action lawsuit in the U.K. worth £785 million ($1 billion).
The legal challenge was initiated by more than 1,500 app developers who believe that Apple’s App Store charges are exorbitant and stifle competition.
Sean Ennis, a professor at the University of East Anglia and a former OECD economist, is leading the lawsuit on behalf of the developers.
He maintains 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.”
Ennis further explained that the rates are not just unjust, but also represent abusive pricing. He claimed, “The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers.”
The grievance filed with the Competition Appeal Tribunal revolves around Apple’s 30% levy on in-app sales, a practice the developers argue limits fair competition.
Apple, however, contested these allegations, stating its App Store fees are justified and serve to enhance the user experience.
The tech giant further emphasized that its business operations comply with all relevant laws.
Apple’s revenue from its services division, which includes the App Store, has seen a quarterly growth of roughly $20 billion in recent times.
The company imposes a 15% to 30% commission on in-app purchases through its payment systems.
