Apple accused of charging hundreds of millions in ‘Creator Tax’ on UK tech industry in new class action

  • Competition expert Dr Sean Ennis bringing case on behalf of over 1,500 UK app developers at Competition Appeal Tribunal, accusing Apple of abuse of market dominance
  • Thirty percent “commission” charged for app store sales described as an anti-competitive tax on the UK tech industry, with damages being claimed at £785m
  • App Store currently under investigation by Competition Markets Authority and also already facing separate consumer legal action

 LONDON: A leading competition law expert is bringing a class action lawsuit against Apple at the UK’s Competition Appeal Tribunal, seeking nearly £800m on behalf of UK app developers.

Sean Ennis, a Professor of Competition Policy who has held positions at the OECD, US Department of Justice and European Commission, says that British app developers are entitled to up to £785m in compensation from the US tech company, now the world’s largest corporation.

Professor Ennis says that since 2008, Apple has used a variety of contractual and technical conditions to ensure that the App Store is the only place where app developers can market or sell apps designed for iOS – the sole operating system for all iPhones and iPads – to consumers. According to Ennis, Apple has abused its dominant market position by charging an excessive “commission” – typically 30% –  on apps and in-app purchases of digital content (e.g., games, news apps, streaming apps, etc.). On top of these charges, developers are also expected to pay an annual “program fee”, usually USD $99.

Ennis claims that Apple’s charges to app developers are excessive, and only possible due to its monopoly on the distribution of apps onto iPhones and iPads. The charges are unfair in their own right, and constitute abusive pricing. They harm app developers and also app buyers.

How Apple created its own monopoly on software distribution through the App Store

Ennis’s lawyers Geradin Partners say that the App Store is effectively inescapable, as Apple has effectively blocked all alternative means of app distribution, including from alternative app stores or through direct downloads.

Ennis argues, “Apple has a dominant position in the  market for app distribution on iOS devices, since the App Store is the only available channel for distributing apps to iOS device users.”  That Apple has a dominant position on this market has been confirmed by several competition authorities.

The impact on the UK’s digital economy

“The fact that users and developers are completely locked into the iOS system and the App Store gives Apple monopoly power, which Apple leverages to charge excessive fees on app developers. The UK tech industry is being forced to pay an unjustified 30% premium on the price of the app as well as in-app purchases – money that could be reinvested in the UK’s digital economy,” said Ennis.

Economic analysis by Dr Ennis’s experts at Compass Lexecon shows that Apple’s market dominance has given it extraordinary and excessive profits at the expense of the value provided by app developers. A report to the US House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law states that Apple’s net revenue from the App Store alone was estimated to have been about USD $15bn in 2020, rising to USD $18.8bn in 2022. According to the same report, Apple’s former Senior Director of App Store Review confirmed running costs for the App Store were less than USD $100m a year.

The opt-out collective proceeding lawsuit is being brought on behalf of approximately 1,566 app developers in the UK by Geradin Partners, a law firm with market leading expertise in competition law and technology across the UK and Europe.

Founding Partner Damien Geradin said: “This case is about Apple’s exploiting App Store monopoly. The wealthiest company in the world is sucking the blood out of UK-based developers, imposing a sky-high fee that bears no relationship with the cost of running to App Store. This Creator tax is pure profit for Apple. This is money that could be better spent on R&D.”

Geradin states that “[A]pps contribute significantly to the value of iOS devices; without them, customers would not be willing to pay as much for them, or would not buy them at all. The commission is set at a level that does not recognise or reflect that significant contribution. It merely reflects Apple’s bottleneck power.”

Apple’s App Store has come under increasing scrutiny in recent years: the Digital Markets, Competition and Consumers Bill is making its way through Parliament and the UK’s Competition and Markets Authority is currently reviewing evidence submitted to an investigation of the App Store which began in 2021. Announcing the launch of its case, the CMA cited complaints from developers about the 30% commission charged by Apple on the sale of apps, as well as on “in app” transactions.

Professor Ennis’ case could mean app developers obtaining justice alongside consumers, where the case of Dr Rachael Kent v Apple is awaiting trial at the Competition Appeal Tribunal to decide if UK consumers should receive damages of £1.5bn.

Notes to Eds

Sean Ennis and Damien Geradin are available for interview. To arrange interviews please contact:

Valerie Oladeinde




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