Apple £1.5bn class action case launched in UK courts

Open the editor’s digest for free

FT editor Rula Khalaf picks her favorite stories in this weekly newsletter.

The first trial stemming from a UK class action antitrust lawsuit against Big Tech is set to begin on Monday as Apple faces a £1.5bn legal claim for making “excessive and unfair” charges against software downloaded from the App Store.

Barring a last-minute deal, the iPhone maker will begin a court showdown at the UK’s Competition Appeal Court for abusing its primary marketplace to charge commissions of up to 30 percent on App Store marketplace purchases.

The seven-week trial of Apple’s newly appointed chief financial officer Kevan Parekh He is about to testify, the latest in a long list of legal challenges facing Big Tech companies around the world.

In the US it has a Department of Justice. He brought a case Against Apple, the App Store Act stifled competition. However, Apple has mostly emerged Uninjured In a legal battle against the App Store Fortnite In the year Creator Epic Games, which started in 2020 and ended at the beginning of last year.

Antitrust lawyers and the litigation fund industry that supports such cases will scrutinize the CAT proceedings as they try to gauge the prospects of success for a number of other antitrust lawsuits against tech groups including Alphabet, Microsoft and Meta.

The lawsuit against Apple, on behalf of millions of UK consumers, comes after two other class action claims hit a major setback last month.

Telecom operator BT He fought While MasterCard overcharges online customers calm down In the £200mn card payment dispute – a tiny fraction of the £14bn the claimants had originally asked for.

A A series of claims Many of them have been brought against tech companies under the UK’s ten-year-old competition law, which allows for mass legal action for breaches of competition law.

However, cases have been plagued by lengthy procedural disputes, and the case against Apple is the first to go to trial in the sector.

The claimants, led by ‘class rep’ Rachael Kent, a professor at King’s College London, say Apple has created a monopoly by forcing developers who make software for devices such as the iPhone and iPad to distribute using the company’s app store.

They are demanding £1.5bn from Apple, claiming that “excessive and unfair” commissions paid to developers are passed on to consumers who download the software and buy content or digital services within the app.

Lawyers for the claimants, led by Mark Hoskins Casey and Tim Ward Casey, are expected to argue that Apple made an “inflated” profit as the commissions were far greater than what it would have earned if the software had been made available to third-party competitors. to the App Store.

As Apple’s iOS faces competition from Google and its mobile operating system Android, claimants argue that it has locked up market power in its devices and software “ecosystem.”

Apple said the lawsuit was “absurd.” The case was When it debuts in 2022, “the commission charged by the App Store is the most common of all other digital marketplaces,” he said.

Most apps are offered for free, require no payment, Apple added, and “most” developers will qualify for a reduced 15 percent commission, including small businesses whose apps bring in less than $1 million annually in 2020.

Apple is expected to argue that the claimants defined the market too narrowly to include only iOS applications and that it does not dominate the broader market for digital transactions and devices.

As Apple faced similar complaints from Epic games and music app Spotify, the Commission is likely to be right about the Commission’s extensive investments in the platform, including not only payment processing, but also developer tools and security. Reviews, marketing and treatment.