Apple has lost a major class action lawsuit in the UK paving the way for a possible £1.5bn compensation payout to customers.
On Thursday, a London court ruled that Apple had abused its dominant position by charging excessive commissions on its App Store.
It means the Californian software company may now have to pay damages to millions of customers over the lawsuit, which was brought on behalf of around 20 million British iPhone and iPad users at the Competition Appeal Tribunal.
The tech giant faces paying as much as £1.5bn – or £75 a customer, according to estimates. Apple will appeal the decision meaning the payouts are not yet a certainty.
Rachael Kent, a lecturer at King’s College London, brought the case, arguing that Apple had made “exorbitant profits” by excluding all competition for the distribution of apps and in-app purchases.
For years, Apple has been criticised by app developers, such as Spotify and Epic Games, for charging a hefty commission of up to 30pc. Apple says it helps developers market and distribute their apps and charges a lower commission to small businesses.
The case was the first mass lawsuit against a tech giant to come to trial under an American-style class action, with many other cases waiting in the wings.
Ms Kent said: “This case proves that the UK’s collective action regime is working. It empowers ordinary people and small businesses to hold even the most powerful corporations to account. Today’s ruling sends a clear message: no company, however wealthy or powerful, is above the law.”
A spokesman for Apple said: “We thank the tribunal for its consideration but strongly disagree with this ruling, which takes a flawed view of the thriving and competitive app economy.
“The App Store faces vigorous competition from many other platforms – often with far fewer privacy and security protections – giving developers and consumers many options in how they build, share, and download apps. We intend to appeal.”
It comes amid an ongoing fight between the UK Government and Apple over whether the state should have a backdoor to cloud storage used by Apple customers.
Officials ordered the iPhone-maker to break the end-to-end encryption that protects its iCloud service in the UK.
Apple refused, opting to withdraw its advanced data protection rather than create a flawed encryption system.
Last month, Apple was notably absent from a £31bn UK-US tech prosperity deal announced during Donald Trump’s second state visit to the UK. This was despite the tech giant’s chief executive, Tim Cook, taking part in the US president’s tour.
Apple has lost a major class action lawsuit in the UK paving the way for a possible £1.5bn compensation payout to customers.
On Thursday, a London court ruled that Apple had abused its dominant position by charging excessive commissions on its App Store.
It means the Californian software company may now have to pay damages to millions of customers over the lawsuit, which was brought on behalf of around 20 million British iPhone and iPad users at the Competition Appeal Tribunal.
The tech giant faces paying as much as £1.5bn – or £75 a customer, according to estimates. Apple will appeal the decision meaning the payouts are not yet a certainty.
Rachael Kent, a lecturer at King’s College London, brought the case, arguing that Apple had made “exorbitant profits” by excluding all competition for the distribution of apps and in-app purchases.
For years, Apple has been criticised by app developers, such as Spotify and Epic Games, for charging a hefty commission of up to 30pc. Apple says it helps developers market and distribute their apps and charges a lower commission to small businesses.
The case was the first mass lawsuit against a tech giant to come to trial under an American-style class action, with many other cases waiting in the wings.
Ms Kent said: “This case proves that the UK’s collective action regime is working. It empowers ordinary people and small businesses to hold even the most powerful corporations to account. Today’s ruling sends a clear message: no company, however wealthy or powerful, is above the law.”
A spokesman for Apple said: “We thank the tribunal for its consideration but strongly disagree with this ruling, which takes a flawed view of the thriving and competitive app economy.
“The App Store faces vigorous competition from many other platforms – often with far fewer privacy and security protections – giving developers and consumers many options in how they build, share, and download apps. We intend to appeal.”
It comes amid an ongoing fight between the UK Government and Apple over whether the state should have a backdoor to cloud storage used by Apple customers.
Officials ordered the iPhone-maker to break the end-to-end encryption that protects its iCloud service in the UK.
Apple refused, opting to withdraw its advanced data protection rather than create a flawed encryption system.
Last month, Apple was notably absent from a £31bn UK-US tech prosperity deal announced during Donald Trump’s second state visit to the UK. This was despite the tech giant’s chief executive, Tim Cook, taking part in the US president’s tour.
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