EU’s Top Court Says Apple Can Be Sued In Dutch Court Over Allegedly Excessive App Store Fees

• The CJEU dismissed Apple’s argument that the Dutch court lacked jurisdiction in this case because the alleged harm to users did not occur in the Netherlands.
• The court stated that the App Store in question was designed for the Dutch market and offered in Dutch.
• It added that the app store offered apps for sale to users who had selected the Netherlands as their country on their Apple account.

The Luxembourg-based Court of Justice of the European Union (CJEU) on Tuesday ruled that Apple Inc. (AAPL) can be sued in a Dutch court over allegedly excessive app store fees.

The ruling comes after a Dutch tribunal sought clarity from the court over a case brought by two foundations, namely, Stichting Right to Consumer Justice and Stichting App Stores.

The two groups stated that the app store fees that Apple charges for third-party apps are excessive and hurt users. They added that these practices point to Apple’s unlawful abuse of its dominant position.

Apple shares were down nearly 0.2% in Tuesday’s pre-market trade. Retail sentiment on Stocktwits around the company trended in the ‘bullish’ territory at the time of writing.

CJEU Dismisses Apple’s Arguments

The CJEU dismissed Apple’s argument that the Dutch court did not have jurisdiction in this case since the alleged harm to the users did not occur in the Netherlands.

The court stated that the App Store in question was designed for the Dutch market and that it was offered in the Dutch language. It added that the app store offered apps for sale to users who had selected the Netherlands as the country for their Apple account.

“The damage allegedly suffered when purchases are made in that virtual space can therefore occur in that territory, irrespective of the place where the users concerned were situated at the time of the purchase,” the judges said, adding that the Dutch court has international and territorial jurisdiction.

Apple’s App Store Fees

Apple’s app store commissions have come under scrutiny in other jurisdictions as well, including in the U.S. and the European Union. While the company says 86% of developers never pay a commission, Apple’s lawyer, Marie Demetriou, defended the fees as reflecting the “enormous” benefits of the iOS ecosystem, according to a Reuters report.

Apple has a program for small businesses that offers developers a 15% commission rate if their earnings in the previous calendar year are up to $1 million.

AAPL stock is up 13% year-to-date and 19% over the past 12 months.

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