Apple has been accused of dominating the tech market with a “total shutout” of competitors as it faces claims it overcharged customers of the UK App Store, a court has heard.
The claim alleges that the tech company is abusing its dominant position in the app market and that its 30% commission fee is in breach of European and UK competition laws.
The claim has been brought against the company by Dr Rachael Kent, an academic at King’s College London, on behalf of herself and about 19.6 million other iPhone and iPad users in the UK. It is the first of numerous cases against big tech companies scheduled to be brought before the Competition Appeal Tribunal in the next few months.
In an opening statement, Mark Hoskins KC on behalf of the plaintiffs claimed that there was no dispute over the “fundamental facts in this case”, and that by every definition Apple was a dominant body in the tech market. They alleged the company uses this dominance to “preclude any competitors from entering the competitive market” in what they called “a total shutout”.
Kent claims that the App Store made $15bn (£12bn) in revenue last year while spending £100m on operating costs, and that users are being overcharged as they have no other option.
She said: “The App Store was a brilliant gateway for a range of interesting 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 guards access to the world of apps jealously, and charges entry and usage fees that are completely unjustified.
“This is the behaviour of a monopolist and is unacceptable. Ordinary people’s use of apps is growing all the time, and the last year in particular has increased our dependence on this technology. Apple has no right to charge us a 30% rent for so much of what we pay for on our phones – particularly when Apple itself is blocking our access to platforms and developers that are able to offer us much better deals. This is why I am taking this action.”
In a statement released prior to the trial, Apple rejected the claim, saying the accusations were “meritless” and the company had not violated any laws.
“We believe this lawsuit is meritless and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store and Apple’s valuable technologies have delivered to the UK’s innovation economy.
“The commission charged by the App Store are very much in the mainstream of those charged by all other digital marketplaces. In fact, 85% of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15%.”
During the opening argument, the plaintiffs said that Apple claimed that it was impossible to measure the App Store’s profitably because the store cannot be separated from the rest of the “Apple ecosystem”.
The court will hear the rest of the plaintiffs opening statements tomorrow morning, with Apple set to make their own opening statements later in the afternoon, and the trial is expected to last seven weeks.
The trial continues.
