Apple under fire: Over ₹1.58 lakh crore lawsuit alleges unfair fees and anti-competitive practices- Details

Apple is facing a massive lawsuit over its App Store fees, with users claiming unfair charges. The case highlights concerns about the company's market dominance.

A lawsuit alleging unfair App Store charges has been filed against Apple in the UK. (REUTERS)

A major lawsuit has been filed against Apple in the UK, accusing the company of exploiting its dominant market position by imposing a 30 percent commission fee on app developers via its App Store. The lawsuit, backed by around 20 million iPhone and iPad users, claims that the tech giant's practices have resulted in overcharging British consumers by up to 1.5 billion pounds ($1.8 billion), or approximately Rs. 1.58 lakh crore.

Legal Allegations Against Apple

The legal action, initiated by Dr. Rachael Kent from King's College London, targets Apple for violating UK and European competition laws. It alleges that Apple has monopolised the app distribution market by restricting iOS users to downloading apps solely from the App Store and charging developers hefty commissions on their sales, Reuters reported. The lawsuit covers 19.6 million UK users who may have overpaid for apps or in-app purchases between October 2015 and November 2024. According to UK law, these users are automatically included in the claim unless they choose to opt-out.

Kent argues that the App Store, originally intended to provide a platform for app distribution, has become the only option available to millions of iOS users. The lawsuit accuses Apple of preventing the emergence of alternative platforms that could potentially offer better deals for consumers. Kent claims that Apple's monopoly restricts competition, ultimately harming users.

Apple's Response

In response, Apple has rejected the allegations, calling the lawsuit unfounded. The company insists that its commission rates are comparable to other digital platforms. It also points out that 85 percent of apps are free, and many developers benefit from a reduced commission rate of 15 percent.

The trial is underway at the Competition Appeal Tribunal and is expected to last for seven weeks. This case is part of a series of ongoing legal challenges Apple faces globally over its App Store policies. According to a Reuters report, Apple is also involved in a separate £785 million lawsuit in the UK concerning developer fees and was recently fined €500 million ($538 million) by the European Commission for similar issues.

Apple's Monopoly 

Kent, who has brought the case, claims that Apple's actions have generated “exorbitant profits” by excluding competition in the app distribution market. She argues that Apple's monopoly enables it to impose restrictive terms on developers and charge excessive fees, which consumers ultimately pay.

Apple, on the other hand, maintains that the fees reflect the substantial benefits that developers gain through the iOS ecosystem. The company's lawyer, Marie Demetriou, stated that Kent's case overlooks Apple's intellectual property rights, framing the claims as an attempt to seize property rights under the guise of competition. The trial is expected to feature testimony from Apple's chief financial officer, Kevan Parekh, later this week.