Apple Loses UK Lawsuit Accusing It Of Abusing Dominant Position Over App Store Commissions: Report

• According to a Reuters report, the lawsuit is valued at up to £1.5 billion and was brought on behalf of nearly 20 million iPhone and iPad users.
• Rachael Kent, a British academic, stated in the lawsuit that Apple made “exorbitant profits” by excluding competition from the distribution of apps and games.
• The case also touched upon Apple’s exclusion of alternative methods for in-app purchases.

Apple Inc. (AAPL) reportedly lost a lawsuit in the U.K. on Thursday that accused the iPhone maker of abusing its dominant position by charging unfair app store commissions to developers.

According to a Reuters report, the lawsuit is valued at up to £1.5 billion ($2 billion) and was brought on behalf of nearly 20 million iPhone and iPad users. Apple had been accused of overcharging iPhone and iPad users in the U.K., and Thursday’s ruling was issued by the Competition Appeal Tribunal following a trial in the case.

Apple shares were up 0.71% in Thursday’s midday trade. Retail sentiment on Stocktwits around the company trended in the ‘neutral’ territory at the time of writing.

What Was The Accusation?

The case against Apple was brought by Rachael Kent, a British academic, who stated that the company made “exorbitant profits” by excluding competition from the distribution of apps and games to iPhone and iPad users, according to a Reuters report. The case also touched upon Apple’s exclusion of alternative methods for in-app purchases.

"Apple is not just dominant ... it holds a 100% monopoly position," Kent's lawyer said in court filings, according to the report.

Mounting Pressure

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 offered by the iOS ecosystem, according to the 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 4% year-to-date and 13% over the past 12 months.

1 GBP = 1.33 USD

Also See: OpenAI Says ChatGPT Business Subscriptions In EMEA Have Grown Six-Fold, With Europe Contributing The Most: Report

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