Will the App Store’s Business Model Survive? As a reminder, on its App Store, the E Cupertino company charges a commission of 30% (or sometimes 15%) on transactions between users and app developers for in-app purchases and subscriptions.
This commission is increasingly disputed and a source of conflict between the Cupertino company and some developers. This commission is also at the core of the legal battle between Apple and Epic, the developer of the Fortnite video game, in the United States.
And this week, we learn that Apple, too, will have to defend itself in British justice. Indeed, across the channel, the firm is being sued by Rachel Kent, lecturer in the digital economy.
As reported in a Daily Mail article, the London-based Competition Appeals Tribunal has rejected an attempt by Apple to limit this class action lawsuit that was filed in 2021. Thus, Apple will face a full trial in the UK.
“This is great news for App Store users in the UK. I commend the Competition Appeals Tribunal for this clear and well-considered decision.Rachel Kent rejoices.
“During a hearing in May 2022, Apple attempted to argue that the aspect of Dr. Kent’s claim which alleges that Apple’s 30% commission is unreasonable and should not be allowed excessively, on the grounds that Dr. Kent has applied a false legal test and therefore his claim was flawed. But in a decision released this week, the court dismissed all of Apple’s arguments and, in doing so, rejected Apple’s attempt to limit Dr. Kent’s claim. done.May we also read in a press release from Hausfeld & Company LLP, which represents Rachel Kent.
Will Apple have to pay compensation?
If Rachel Kent wins the lawsuit, Apple could be ordered to pay damages to people living in the United Kingdom who made purchases on the App Store and therefore indirectly paid this 30% commission to the Cupertino company.
The complaint estimates that these losses could exceed £1.5 billion, or €1.7 billion. According to Hausfeld & Co LLP, any iPhone or iPad user in the UK who has paid for paid apps, in-app purchases or paid subscriptions to the App Store from 1 October 2015 can be included in the class action . And in case of win compensation can be given.
Otherwise, as a reminder, Google also takes commission from its Google Play Store. However, on Android, users have the option to install the app without going through this official store, to bypass these commissions.
Currently, developers are campaigning for Apple to take inspiration from Google and allow users to install apps outside of the App Store. To counter these requests, the Cupertino company regularly discusses security, explaining that allowing apps not verified by the App Store process can allow malware to enter the iPhone.
By: Keleops AG