Apple has filed a lawsuit against $ 2 billion over alleged arbitrary charges on the App Store

Apple has filed a lawsuit against $ 2 billion over alleged arbitrary charges on the App Store

Apple is the target of another lawsuit, this time the billionaire, for imposing offensive values ​​from UK App Store customers. The Cupertino giant has been questioned for having “unlawfully excessive levels of profits”, according to the lawsuit, over the 30% commission charged for selling apps.

The lawsuit aims to compensate 20 million iPhone and iPad users for years of excessive fees. If found guilty, the company will have to pay damages of up to $ 2 billion, which is a very heavy value even for one of the world’s major companies.

Monopoly accusation

The case was brought by attorney Rachel Kent, a specialist in digital economics and a professor at Kings College London. In the process, Kent claims that the App Store is the only way to get apps on an iPad or iPhone, and as such, the platform acts as a monopoly.

The App Store‌ was a great gateway to a host of fun and innovative services that millions of us find useful, myself included. But 13 years after its launch, it has become the only gateway for millions of consumers. Apple enthusiastically protects access to the world of apps and charges completely unjustified fees. This is the behavior of the monopolist and it is not acceptable, “confirms the lawyer.

In its defense, Apple claims that there is no merit in the request, since the fees charged, according to the company, are within the standard practiced by other companies in the digital environment. Apple confirms that 84% of the apps on the App Store are free and that developers in these cases pay nothing to Apple. The company explains: “For the vast majority of developers who pay commission to Apple because they sell a digital good or service, they are eligible to receive a commission rate of only 15%.”

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If British justice finds the attorney’s argument valid, then anyone in the UK who has purchased paid apps or subscriptions or bought something from apps downloaded from the App Store as of October 2015 will benefit from the measure.

Earlier this year, Apple lowered its rate from 30% to only 15% for developers earning up to $ 1 million annually in app revenue and new developers on the App Store. Since the lawsuit does not mention this fact, this can be considered at the time of analysis by the competent court. It remains to wait for the decision to see if Apple can escape the billionaire’s loss.

Status reminiscent of an epic

The lawsuit resembles what Epic Games has filed against Apple, also in the UK, for its focus on the argument that the commission charges the company is anti-competitive and monopolistic.

The confrontation began on August 13 last year, when Epic put a payment method on the mobile version of Fortnite that could be served directly to it. However, the company will not need to pay a 30% fee for transactions through the App Store and Google Play. According to Sensor Tower, on iOS alone, the game has monthly sales of $ 30 million.

In response, Apple and Google withdrew Fortnite from their stores, prompting Epic to file lawsuits against them over the anti-competitive stance. The Google issue appears to be resolved, but the conflict with the Cupertino giant has continued in the courts to this day.

Source: Business standard

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About the Author: Camelia Kirk

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