The net appears to be closing in on US tech giants’ business practices amid claims that the UK’s collective action regime means that “no company, however wealthy or powerful, is above the law”.
The move follows a Competition Appeal Tribunal (CAT) ruling that Apple has abused its dominant position over the past decade by charging developers “excessive and unfair prices” in the App Store.
Lawyers for Dr Rachael Kent, an academic and senior lecturer at King’s College, London, who brought the case, claim Apple had made “exorbitant profits” by excluding all competition for the distribution of apps and in-app purchases.
Developers are typically charged 30% commission, which is then passed on to consumers, and are blocked from routing payments through any platform other than Apple’s App Store. The ruling could benefit around 36 million iPhone and iPad users in the UK.
In a statement, Dr Kent said: “Those unfair fees have added up to billions for the world’s richest company, and less choice and innovation for everyone else.
She added that the decision shows the UK’s collective action regime is working and “sends a clear message: no company, however wealthy or powerful, is above the law”.
Lesley Hannah, partner at Hausfeld & Co LLP, who is representing Dr Kent, said: “The whole purpose of competition law is to ensure fairness and to prevent companies exploiting their market power. Apple illegally kept rivals out of the market in order to prevent their customers being able to use rival app stores and save money.”
The tribunal is being urged to force Apple to cough up £1.5bn in damages for purchases made over the last 10 years, although calculations about compensation will be argued at a hearing next month. Even so, it could be some time before anyone sees any money as Apple said it will appeal the decision.
Hannah maintains that Apple will need to convince the court that there is “an error of law” in the judgment and any appeal could take a year to 18 months.
An Apple spokesperson said: “This ruling overlooks how the App Store helps developers succeed and gives consumers a safe, trusted place to discover apps and securely make payments.”
Meanwhile, rival tech giants, including Amazon and Microsoft, are also facing sizeable claims at the CAT, while Google is being challenged over the commission it charges app developers for access to its Play Store.
Earlier this week, the UK Competition & Markets Authority ramped up its attack on Google and Apple for their “strategic” roles in mobile ecosystems, opening the door for regulators to impose changes to their business practices to improve competition.
Google has branded the decision “disappointing, disproportionate and unwarranted” while Apple said the move could pose increased risks for users and jeopardise the UK’s “developer economy”.
Back in April, the European Commission fined Apple €500m (£429m) over its App Store practices in one of the first monetary penalties issued for a breach of its Digital Markets Act.
At the time, one Brussels chief branded the decision a “strong and clear message” to tech giants. The company has no right to appeal the ruling.
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