Apple has lost a major competition case in the UK after the Competition Appeal Tribunal (CAT) ruled that the company abused its dominant position in the digital app market by overcharging millions of iPhone and iPad users for apps and in-app purchases.
The court ruled in favor of Dr. Rachael Kent, a lecturer at King’s College London, who brought the Kent v. Apple class action lawsuit on behalf of almost 36 million British consumers and businesses. The CAT concluded that Apple’s practices resulted in excessive and unfair pricing over a ten-year period.
The court ruled that Apple had “engaged in exclusionary practices” and charged “excessive and unfair fees” for App Store purchases and subscriptions, violating competition law.
The case of Dr. Kent represents a significant legal milestone as it is the first successful class action of its kind under the UK consumer competition framework – making her the first female class action plaintiff in a class action in the UK.
The ruling means anyone who has purchased paid apps, digital subscriptions or in-app content through the Apple App Store since October 1, 2015 could be entitled to compensation. The total payout is estimated to be up to £1.5 billion.
“This is a groundbreaking victory – not just for App Store users, but for anyone who has ever felt powerless against a global technology giant,” said Dr. Kent.
“The court has confirmed that Apple has been illegally overcharging users for more than a decade. These overcharges have resulted in billions of dollars in losses for the world’s richest company and less choice and innovation for everyone else.”
She added that the decision demonstrated that the UK’s collective action system was working to “empower ordinary people and small businesses to hold even the most powerful corporations to account”.
Apple typically charges a 30% commission on app purchases, subscriptions and digital content sold through its App Store – a system that critics say limits competition by forcing developers to use Apple’s internal payment infrastructure.
In its ruling, the court said Apple’s restrictions “cannot be reasonably justified as necessary or proportionate” and ruled that more competition would provide consumers with more value and choice.
The ruling only applies to digital goods and services – such as games, music and streaming apps – and excludes physical transactions such as those made via Uber or Deliveroo.
Apple said it “strongly disagrees” with the tribunal’s findings and confirmed its intention to appeal. The company told the BBC that its app store system “ensures a safe and trusted marketplace for users and developers alike.”
The case adds to a range of global antitrust challenges facing the Cupertino-based company, which is under scrutiny in both the EU and the US over similar allegations of anti-competitive behavior related to its app store model.
The ruling opens the door for millions of iPhone and iPad users to join the compensation claim. Anyone in the UK who has made paid purchases through the App Store since October 2015 can check their eligibility and app purchase history through their Apple ID account settings.
Legal experts say the ruling could have far-reaching implications for the accountability of digital platforms in the UK, potentially paving the way for more consumer class actions against big tech companies.
