What is the claim about?

The claim is about Apple’s conduct in the market for the distribution of third-party apps via the App Store. The claim alleges that Apple holds a dominant position in the iOS app distribution market, and that it has abused its dominant position by charging excessive and unfair commissions on the purchases of apps and in-app purchases.

Economic analysis by Dr Ennis’ 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.

Apps contribute significantly to the value of iOS devices; without them, customers would not be willing to pay as much for the devices, or would not buy them at all. The commission is unfair because it is set at a level that does not recognise or reflect that significant contribution. It merely reflects Apple’s bottleneck power.

Dr Ennis’ case is that Apple’s abuse has caused substantial loss to UK-based app developers that received revenue from the sale of their apps via the App Store (or through transactions within their apps). Had Apple acted lawfully, it would have charged a commission that was considerably lower. Furthermore, the losses to app developers are ongoing and will continue to mount until Apple accepts its liability, pays compensation to the app developers, and adjusts its behaviour. Such compensation should reflect the higher revenues that UK-based app developers would have earned if Apple had not acted in breach of competition law.

Who is included in the claim and what does opt-in/opt-out mean?

If you are a UK domiciled third-party app developer and received revenue from the sale of your app via the App Store, or from transactions within your app, then you could benefit from this claim against Apple.

These app developers will be in the class and potentially eligible for compensation in due course if (1) the Competition Appeal Tribunal gives permission for this case to proceed and (2) you do not actively opt out of the claim.

The ‘opt-out’ procedure is often used in class actions. In this case, it simply means that you’ll automatically be included in this claim if you are an affected app developer, unless you state you’d prefer not to be involved, and opt-out. Should you want to opt-out, you will not need to let us know until we are given permission to proceed by the Competition Appeal Tribunal.

What do I need to do now?

Right now, nothing.  While it will help us keep you up to date with the process by registering on the site, there is no requirement for you to participate at this point.  We are currently asking the Competition Appeal Tribunal for permission to bring this claim. Once we get the permission we will let you know about next steps and when you will need to let us know about your business so we can assess what losses you may have suffered.

Who is the claim against and what have they done?

The claim is against the various companies that form part of the Apple group of companies. Depending on the territory of the end-user, these companies act as the agents for the marketing and end-user downloads of apps developed by UK domiciled developers or are otherwise connected to the UK developer’s sale of apps on the app store. Apple has a 100% monopoly in the distribution of third-party apps to iOS device users.

We allege that Apple has breached competition law, which prohibits companies from abusing a dominant position. Apple does this by charging a 30% commission for app sales and in-app purchases that allows it to enjoy an extraordinary and excessive profit margin at the expense of app developers.

Our assessment of Apple’s App Store practices and excessive prices are consistent with concerns raised by various other authorities, including the UK Competition and Markets Authority, the European Commission, the US House of Representatives Antitrust Subcommittee, and the US District Court for the Northern District of California.

Absent Apple’s abuse of its dominant position, our analysis has found that app developers would have paid a much lower commission, if any. Compensation should also reflect the increased revenues which you could have earned if Apple had not acted in breach of competition law.

Who is bringing this claim?

Sean Ennis is the proposed class representative. He is currently the director of the Centre for Competition Policy and Professor of Competition Policy at Norwich Business School. Prior to these roles, he spent more than 15 years as a Senior Economist in the Competition Division of the OECD. Sean is championing the cause for UK app developers who should have earned more from the sales of their apps and in-app purchases over recent years.

Geradin Partners is working with Dr Ennis to bring this claim. Geradin Partners is a specialist law firm with market leading expertise in competition law and technology across the UK and Europe.

What is the role of the class representative?

Should Dr Ennis be authorised to act as the class representative for this claim, he will be responsible for, amongst other things, communicating with the class and issuing formal notices to the class members. Dr Ennis will make decisions on the conduct of the claim and, in particular, will evaluate any offer of settlement that Apple may make and decide whether to present it to the Competition Appeal Tribunal for their approval.

How do I pay for this claim and am I at risk of paying Apple’s legal costs should the claim not succeed?

You do not need to pay anything for this claim. This is a funded claim which means that you will not need to pay for any legal fees to be included in this claim and instead a third party is paying for these costs. The funder, Harbour, has committed to fund all elements of the claim. You will also not be at risk of having to pay for Apple’s legal costs should the claim not succeed, as the funder has obtained ‘after the event’ insurance to cover any adverse costs risk.

How much money should I expect to receive and when?

Compensation will be for losses as a result of Apple’s anti-competitive conduct. Our experts estimate that the value of the claim is £785 million. The precise value of the claim will become known once our experts are able to analyse data which Apple will be obliged to provide at a later stage of the claim.

Affected app developers will be entitled to a share of compensation, but please note that recovery is not guaranteed. Should Dr Ennis be certified to act as the class representative, he will need to prove his case at trial unless the case settles.

It could take a few years for the claim to reach a resolution. It may be that the claim will settle without having to go to trial in which case compensation could be available sooner.

What are collective proceedings?

Collective proceedings are commonly referred to as a class action, class claim, a group claim or a group action. This is a form of court or tribunal procedure which enables a class representative to bring proceedings on behalf of numerous people affected by an infringement of EU or UK competition law.

Before the claim can proceed, the Competition Appeal Tribunal must make a collective proceedings order (CPO) which authorises the class representative to act on behalf of the class while also certifying the claims as eligible to be included in the collective proceedings. Once the CPO is made, the class representative will have to prove his case at trial.

What is the Competition Appeal Tribunal?

This claim has been filed at the Competition Appeal Tribunal. The Tribunal is a specialist judicial body that is based in London but covers the whole of the UK and hears certain competition law and regulatory disputes. It has cross-disciplinary expertise in law, economics, business and accountancy. The Tribunal publishes its Rules and Guidance, together with information about what it does, on its website www.catribunal.org.uk.

What stage has the claim reached?

An application was made to the Competition Appeal Tribunal on 25 July 2023 for a CPO. The Tribunal will decide whether to give permission for the claim to proceed as a collective action and whether the class representative is suitable to bring the claim. Please check this website for any further updates and in particular to see whether the claim has been given permission to proceed.

How can I stay updated on the progress of this claim?

You will receive updates about the progress of this claim when you sign up to follow the case using the Register button above.  In addition, you can track the updates of the claim via this website and via social media channels.

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