Apple $1.5 billion class action lawsuit begins in UK court

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The first trial stemming from a British class action antitrust case against Big Tech is set to begin on Monday, as Apple faces a 1.5 billion lawsuit alleging it charges excessive and unfair fees for software downloaded from its App Store.

If no final agreement is reached, the iPhone maker will begin a legal showdown at Britain's Competition Appeal Tribunal over claims it abused its dominant market position to charge up to 30% commission on purchases on the App Store marketplace.

The seven-week trial, in which Apple's newly appointed Chief Financial Officer Kevan Parekh is expected to testify, is the latest in a growing list of legal challenges facing tech giants around the world.

In the United States, the Justice Department filed a lawsuit against Apple, claiming that App Store rules stifled competition. But Apple was largely unscathed from its legal battle over the App Store with Fortnite creator Epic Games, which began in 2020 and ended early last year.

The antitrust lawyers and litigation funding industry behind these cases will be closely examining the CAT proceedings to gauge the chances of success of several other antitrust lawsuits against technology groups including Alphabet, Microsoft and Meta.

The lawsuit filed against Apple on behalf of millions of UK consumers follows major setbacks over two other class action lawsuits last month.

Telecommunications company BT fought a lawsuit alleging it overcharged landline customers, while Mastercard settled a card fees dispute for $200 million, a small portion of the $14 billion the claimants had originally sought.

A series of lawsuits have been brought against technology companies under a British law enacted a decade ago to allow large-scale legal action for alleged breaches of competition law.

However, the lawsuit was stymied by lengthy procedural disputes, and the lawsuit against Apple was the first in the industry to be sent to trial.

The claimants, led by Rachael Kent, a lecturer and class representative at Kings College London, said Apple created a monopoly by forcing developers who make software for devices such as the iPhone and iPad to distribute their apps using the company's own app store.

They are demanding $1.5 billion from Apple, claiming that excessive and unfair fees charged to developers are passed on to consumers who download software and purchase content or digital services within the apps.

The claimants' lawyers, led by Mark Hoskins KC and Tim Ward KC, are expected to say Apple has made huge profits. This is because the commissions are much higher than they would be if the software were also made available to third-party competitors. App Store.

Although Apple's iOS faces competition from Google and its mobile operating system, Android, the claimants argue that Apple's iOS has established market dominance within the device and software ecosystem.

Apple said the lawsuit was without merit. The fees charged by the App Store are in line with those charged by all other digital marketplaces, the App Store said when it first launched in 2022.

Apple added that most apps are available for free and have no fees, and that the majority of developers are eligible for a 15% discounted fee under rules introduced in 2020 for small businesses whose apps generate less than $1 million in annual revenue.

Apple is expected to argue that the claimants have defined the market too narrowly to include only iOS apps and are not dominant in the broader market for digital transactions and devices.

Apple will likely say the fees are justified due to its extensive investments in the platform, including developer tools and security, as well as payment processing, as it did with similar complaints about the App Store policies of Epic Games and music app Spotify. Reviews, marketing, curation.

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