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The first trial stemming from a surprise UK lawsuit against Big Tech is expected to begin on Monday as Apple faces a £1.5bn legal action charging “excessive and unfair” fees for software downloaded from its app store.
Despite the last-minute settlement, the iPhone maker will begin legal proceedings at the UK's Competition Appeal Court over allegations of abusing its dominant market position to charge commissions of up to 30 percent for purchases on the App Store.
A seven-week trial, where Apple's new chief financial officer Kevan Parekh it's to prove, it's the latest in a growing list of legal challenges facing Big Tech companies around the world.
In the US, the Department of Justice has bring the case against Apple arguing that its App Store rules have stifled competition. However, Apple evolved a lot unharmed from the legal battle over the App Store with Fortnite The creator of Epic Games that started in 2020 and ended at the beginning of last year.
Antitrust lawyers and the debt financing industry that support such cases will be reviewing the CAT proceedings as they try to gauge the chances of success in several other antitrust cases against technology groups including Alphabet, Microsoft and Meta.
The lawsuit against Apple, brought on behalf of millions of UK consumers, comes after a major setback last month in two other class action lawsuits.
Telecoms user BT he fought charge that it is too expensive for landline customers, while Mastercard stable dispute over £200mn card payments – a tiny fraction of the £14bn claims were initially sought.
A series of claims have been made, many of them against technology companies, under a UK law introduced ten years ago that allows for more legal action for infringements of competition law.
However, the lawsuits were dismissed by lengthy procedural arguments, and the case against Apple is the first in this category to go to trial.
The plaintiffs, led by “class representative” Rachael Kent, a lecturer at King's College London, say Apple has created a monopoly by forcing developers who make software for devices like iPhones and iPads to distribute their apps using the company's app store.
They are seeking £1.5bn from Apple, arguing that “excessive and unfair commissions” charged to developers are passed on to consumers who download software and buy content or digital services within the apps.
The plaintiffs' lawyers, led by Mark Hoskins KC and Tim Ward KC, are expected to say that Apple has received “shocking” profits, as the commissions are much larger than they would have been if the software had been made available to third-party competitors. in the App Store.
While Apple's iOS faces competition from Google and its Android mobile operating system, it claims to have established sales power within an “ecosystem” of devices and software.
Apple said the lawsuit was “unmerited”. “The commission charged by the App Store is significantly higher than that charged by all other digital marketplaces,” it said when the case was first launched in 2022.
Most apps are offered for free, no subscription is required, Apple added, and “most” developers qualify for a 15 percent commission discount, under rules introduced in 2020 for small businesses with apps that bring in less than $1 million a year.
Apple is expected to argue that the plaintiffs defined the market too narrowly as it only includes iOS apps and is not relevant to the broader market for transactions and digital devices.
As it did when it faced similar complaints about App Store policies from Epic Games and music app Spotify, Apple is likely to argue that its commission is justified by the extensive investment it is making in its platform, including not only payment processing but tools to develop, security. review, marketing and management.