Apple faces $1 billion class-action lawsuit in UK: Know why
Apple has become the target of a class-action lawsuit, which is being brought against the brand on behalf of more than 1,500 UK-based app developers. The suit seeks a settlement amount that could be as high as $1 billion. Apple has been accused of charging an "anti-competitive" 30% fee from some app makers that utilize the company's in-app payment system.
Why does this story matter?
Apple's services division, which includes the App Store, has witnessed tremendous revenue growth in the last few years. It currently makes around $20 billion each quarter. However, the tech giant continues to charge a sizeable fee for using its in-app payments system. This has been a cause of concern for developers the world over and targeted by antitrust regulators in several countries.
Lawsuit filed on behalf of 1,566 app developers
The UK lawsuit has been filed on behalf of 1,566 app developers at the Competition Appeal Tribunal. The class-action lawsuit is being led by Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia. He has held positions at the OECD, the US Department of Justice, and the European Commission. The law firm Geradin Partners is advising him.
Suit aims to get developers compensated
The lawsuit will evaluate the claims made by the developers and get them compensated for Apple's alleged anti-competitive actions. "And I'm really convinced that the type of behavior we're talking about in this case is deeply problematic. So, I was interested in taking a role to help get some redress for those who I feel have been harmed by the behavior," Ennis told TechCrunch.
Apple continues to reject all accusations
Per the lawsuit, the developers are being overcharged. The money they are losing out on could be used for research and development (R&D) to advance app innovation. Apple continues to refute claims that it is enriching itself at developers' expense. It stated that 85% of App Store developers don't pay any commission, and its platform provides European developers access to customers in 175 countries.
Compensation amount may reach millions of dollars for some developers
Since the lawsuit is an opt-out class action, developers aren't required to register to be included in any potential rewards. Payments could vary widely and in some cases reach millions of dollars if plaintiffs win their case. Their iOS app business would determine the amount of damages owed to each. The suit has been certified and now awaiting trial at the Competition Appeal Tribunal.
