Apple Inc. will defend allegations that it made “exorbitant profits” by using its App Store to abuse its dominant market position at the first UK class action trial against a Big Tech firm.
The suit at London’s Competition Appeal Tribunal started on Monday alleging that millions of “captive” iPhone and iPad users paid the price for excessively high commission charged by Apple for purchases made on its App store. Apple is contesting the allegations.
“It has been able to derive exorbitant profits from the App Store because it is a monopolist on the relevant market,” lawyers for the claimants alleged in documents prepared for the case.
Users have not suffered any loss as Apple’s conduct is lawful and its commissions are reasonable and fair, Apple’s lawyers will argue during the seven week trial.
“If Apple had acted as a monopolist and failed to innovate, it would have been wiped out by the pace of innovation from its competitors,” its lawyers said in court filings.
Rachael Kent the lead claimant in the case filed in 2021, and her lawyers estimate Apple could be liable to pay over GBP 1.5 billion ($1.8 billion or roughly Rs.15,601 crore) to compensate users in the UK who paid for apps or subscriptions on their Apple devices since October 2015.
A ruling in the case could signal how judges will look upon these new style class action accusing a handful of the world’s most powerful tech firms of ripping consumers off. Alphabet Inc. faces an identical trial later this year over alleged overcharging for purchases on Google Play Store, while Meta Platforms Inc. has been sued over the use of personal data.
Apple is not anti-competitive or dominant, the commission was justified and Apple’s contribution to developers far exceeds the “relatively modest” commission, its lawyers said in the filings. Most developers pay nothing and are eligible for 15 percent commission rate.
“The total volume of commerce associated with the iOS ecosystem was estimated to be GBP 910 billion globally,” Apple’s lawyers said. “More than 90 percent of the commerce facilitated by the iOS ecosystem was not subject to Apple’s commission.”
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