Apple Faces $1 Billion UK Lawsuit Over App Store Fees

The European market app developers targeted Apple and filed a lawsuit (class action suit) of 785 million pounds (amounting to $1 billion). The class action lawsuit is filed by 1566 app developers in the United Kingdom. They have raised the cost of its app store fees. App store revenues grew for Apple over the last few years. Revenues collected per quarter are as high as 20 billion dollars every quarter.

Commissioning 15-30% charges are what app makers are paying for using the in-app payment system module. This step has been largely criticized by app makers and developers and is being treated as an action that is leading to trust issues in many countries.

Earlier, it was confirmed by Apple that almost 85% of developers do not have to pay any kind of commission. Due to their ease, European developers could get to the market and woo customers easily. But now with each sale, what Apple charges are being objected to by these 1566 app developers all across.

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What is the UK lawsuit all about?

It takes a lot for these app developers to bring the apps to the main market. Again, once they are there, these app developers need to put them in Google Playstore and Apple appstore to reach the maximum number of people. They make sales after a lot of advertisements, branding, and networking, and paying off 15%-30% of the app price to the Apple appstore is difficult to bear for many.

The monopoly that Apple has on iOS and iPad markets is contributing to such exorbitant commission amounts. 

According to the law firm, Geradin Partners which is appealing on behalf of these app developers feel this amount leads to an unnecessary increase in pricing. They claimed it to be abusive and not only harm app developers but also app buyers in the process.

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They also argue that app developers could use the money to better the product. 

But Apple states it helps small-scale developers reach more customers globally and thereby outpacing large-scale developers. The suit is being funded by UK litigation funder Harbour.

Also, the argument states that only 16% of the apps are being charged 15-30% of the app’s price. It also means that certain app developers who fall under this 16% radar have to pay for other app developers who do not fall under the scanner.

Apart from the 15-30% fee on every sale, there is also a $99 annual fee program for developers to pay to Apple. This amount that is charged by Apple is one of how they monetize their app store.