UK court rules Apple overcharged app developers, company aruges verdict ‘takes a flawed view of.....’

A London Tribunal has ruled that Apple misused its dominant position by charging app developers unfair commissions, says news agency Reuters. As per the report, the Competition Appeal Tribunal (CAT) ruled against Apple after a trial of the lawsuit.

The tribunal said that Apple abused its dominant position from October 2015 till December 2020 by shutting out competition in the app distribution market and by "charging excessive and unfair prices" as commission to developers.In its ruling, the CAT said that the developers were overcharged by the difference between a 17.5% commission for app purchases and the commission Apple charged was usually 30%. The CAT also ruled that app developers passed on 50% of the overcharge to consumers.

What Apple says and what the ruling means

The case, filed on behalf of millions of iPhone and iPad users in the United Kingdom, is valued at around 1.5 billion pounds ($2 billion). The ruling could leave the US tech company on the hook for hundreds of millions of pounds in damages. Apple said that it will appeal the verdict, arguing it "takes a flawed view of the thriving and competitive app economy". A hearing is scheduled for the next month to decide how damages are calculated and Apple's application for permission to appeal.

"This ruling overlooks how the App Store helps developers succeed and gives consumers a safe, trusted place to discover apps and securely make payments," said an Apple spokesperson as quoted in Reuters report.The Reuters report quotes Rachael Kent, the British academic who brought the case, saying Apple had made "exorbitant profits" by excluding all competition for the distribution of apps and in-app purchases.At the start of the trial in January this year, her lawyers argued that Apple's "100% monopoly position" allowed it to impose restrictive terms and excessive commissions on app developers, which Apple denied.