Apple loses UK lawsuit over app store commissions

Apple on Thursday lost a London lawsuit accusing the U.S. tech company of abusing its dominant position by charging app developers an unfair 30% commission through its app store.

The Competition Appeal Tribunal (CAT) ruled against Apple after a trial of the lawsuit, brought on behalf of around 20 million iPhone and iPad users in the United Kingdom and valued at up to 1.5 billion pounds ($2.01 billion), earlier this year.

Rachael Kent, the British academic who brought the case, argued Apple had made “exorbitant profits” by excluding all competition for the distribution of apps and in-app purchases.

The CAT ruled that Apple had abused its dominant position by shutting out competition in the app distribution market and by “charging excessive and unfair prices in the form of the commission which it charges developers”. The tribunal said members of the claimant class were entitled to damages, with how damages are to be calculated to be argued at a hearing next month.

Apple – which has faced mounting pressure from regulators in the U.S. and Europe over the fees it charges developers – said it would appeal against the ruling, which it said “takes a flawed view of the thriving and competitive app economy”.

“This ruling overlooks how the App Store helps developers succeed and gives consumers a safe, trusted place to discover apps and securely make payments,” an Apple spokesperson said.

The case was the first mass lawsuit against a tech giant to come to trial under Britain’s fledgling class action-style regime, with many other cases waiting in the wings.