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Proposed collective action aims to take Apple to task over its 30% App Store cut on behalf of 20 million Brits
Spent money in the walled garden since October 2015?
The day ends with "y" so Apple is facing fresh legal scrutiny of its App Store policies. This time the battleground is the UK's Competition Appeal Tribunal, where a potential collective action is being launched on behalf of circa 20 million users over claims Apple's 30 per cent "tax" is excessive and unjustified.
The claim, brought by King's College academic Dr Rachel Kent, aims to pry up to £1.5bn from Apple's coffers and includes anyone who purchased paid apps, content, or subscriptions using an iPhone or iPad after 1 October 2015.
Kent alleges Apple has abused its control over the iOS platform by preventing the entrance of other app marketplaces, and forcing developers to pay onerous fees to distribute software and in-app content through the App Store.
The academic also took aim at Apple's blanket prohibition on the use of alternative payment gateways in iOS, which was described as "monopolistic" and in violation of Section 18 of the UK Competition Act 1998, as well as Article 102 of the Treaty on the Functioning of the European Union.
In a statement, Dr Kent described Apple's behaviour as "unacceptable".
"Apple guards access to the world of apps jealously, and charges entry and usage fees that are completely unjustified," she said. "Apple has no right to charge us a 30 per cent 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.
"Last year's US Congress inquiry estimated that Apple's annual global revenue from the App Store is at least $15bn a year, but the company's costs for running the platform are just $100m. Apple achieves this by slapping unjustified charges on its users. It would not be able to impose these exorbitant charges if competitor platforms and payment systems were allowed to compete on its devices. It is a clear abuse by Apple of the law and its own customers."
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Legal firms Brick Court Chambers, Hausfield & Co, and Monckton Chambers have taken up the case.
Commenting, Lesley Hannah, partner at Hausfield & Co, accused Apple of creating a "captive market": "Competition laws are there to protect everyone. Every company – especially one as popular and powerful as Apple – needs to obey the law. Millions of people use the App Store to buy apps and make digital purchases within apps, so it is more essential than ever that those purchasers are treated fairly."
Last month, the European Commission published the results of its preliminary antitrust investigation into the state of music streaming on iOS. The commission found Apple had distorted competition on the iOS platform by charging rivals to its Apple Music service payment processing fees that ultimately are passed on to consumers.
Additionally, Apple is mired in a long-running legal battle with Fortnite creator Epic Games over the same issues raised in this proposed collective action.
The ongoing bench trial was prompted by Cupertino's decision to ban Fortnite from the App Store after Epic Games issued a hotfix that included an alternative discounted payment system, in violation of Apple's rules.
In November, Apple agreed to halve the commission to 15 per cent for developers that turn over up to $1m in sales via the App Store but some took this as a "thinly disguised attempt to escape regulatory scrutiny".
The Register has asked Apple to comment. ®