Apple Faces UK Class Action for App Store Overcharging (bloomberg.com) 35
Apple is facing a London lawsuit over claims it overcharged nearly 20 million U.K. customers for App Store purchases, yet another legal headache for the tech giant fighting lawsuits across the world. Bloomberg reports: Apple's 30% fee is "excessive" and "unlawful" the claimants said in a press release Tuesday. The claim, filed at London's Competition Appeal Tribunal on Monday, calls for the U.S. firm to compensate U.K. iPhone and iPad users for years of alleged overcharging. They estimate that Apple could face paying out in excess of 1.5 billion pounds ($2.1 billion). "Apple is abusing its dominance in the app store market, which in turn impacts U.K. consumers," Rachael Kent, the lead claimant in the case and a professor at King's College London. She teaches the ways in which consumers interact and depend upon digital platforms.
The legal challenges come as Apple faces a backlash -- with billions of dollars in revenue on the line -- from global regulators and some developers who say its fees and other policies are unjust and self-serving. Last month, the European Commission sent a statement of objections to the firm, laying out how it thinks Apple abused its power as the "gatekeeper" for music-streaming apps on its store. The suit alleges that Apple deliberately shuts out potential competition and forces ordinary users to use its own payment processing system, generating unlawfully excessive levels of profit for the company. The claimants say any U.K. user of an iPhone or iPad who purchased paid apps, subscriptions or made other in-app purchases since October 2015 is entitled to compensation. "We believe this lawsuit is meritless and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the U.K.'s innovation economy," Apple said in an emailed statement. "The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces," Apple said. "In fact, 84% of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15%."
The legal challenges come as Apple faces a backlash -- with billions of dollars in revenue on the line -- from global regulators and some developers who say its fees and other policies are unjust and self-serving. Last month, the European Commission sent a statement of objections to the firm, laying out how it thinks Apple abused its power as the "gatekeeper" for music-streaming apps on its store. The suit alleges that Apple deliberately shuts out potential competition and forces ordinary users to use its own payment processing system, generating unlawfully excessive levels of profit for the company. The claimants say any U.K. user of an iPhone or iPad who purchased paid apps, subscriptions or made other in-app purchases since October 2015 is entitled to compensation. "We believe this lawsuit is meritless and welcome the opportunity to discuss with the court our unwavering commitment to consumers and the many benefits the App Store has delivered to the U.K.'s innovation economy," Apple said in an emailed statement. "The commission charged by the App Store is very much in the mainstream of those charged by all other digital marketplaces," Apple said. "In fact, 84% of apps on the App Store are free and developers pay Apple nothing. And for the vast majority of developers who do pay Apple a commission because they are selling a digital good or service, they are eligible for a commission rate of 15%."
As usual, B.S. Apple spin (Score:3)
In fact, 84% of apps on the App Store are free and developers pay Apple nothing
I don't call a yearly developer fee (small as it might be) "nothing". Especially when Apple takes a cut from those developers that do sell apps or have IAPs.
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Ad-supported apps with no in-app payments don't give any money to Apple.
Of course, developers do want to get their smurfberries so well, is it really overcharging? Are we going to see a 30% drop in prices across the board, or are developers merely going to take the extra money and run?
The 30% also includes more than just hosting - it includes tech support on installation, refunds, billing, and other things (do you really want to an
Re: As usual, B.S. Apple spin (Score:2)
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Why does apple still need that $99 yearly fee, this isnt 1997.
Stop being assholes, and make it free.
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Why does apple still need that $99 yearly fee, this isnt 1997. Stop being assholes, and make it free.
I can understand for totally free apps (no IAP); but for anything that is sold (either sold apps, or free with IAP), there's no logical reasoning to also require a yearly fee.
Re: As usual, B.S. Apple spin (Score:1)
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You know full well they're talking about the $99 yearly fee to actually publish anything on the App Store (unless you're a registered nonprofit or something). Talking about the free tier where you can't publish on the App Store doesn't even make sense in this context because of the quote.
Re: As usual, B.S. Apple spin (Score:1)
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You think that the downloads come from actual clouds?
Re: 1% (Score:2)
No shit, Sherlock. They're not going to setup an instance of whatever every company runs in order to host their streaming content. To go do would make as much sense as plugging in a WoW server at Apple.
App downloads and in-app content can be hosted. That's explained on the developer site. Updates and in-app purchases are hosted by Apple.
https://developer.apple.com/ap... [apple.com]
Re: 1% (Score:2)
Do you need somebody to read the second paragraph of my post for you?
Legal headache? Ha! (Score:1)
If you're a lawyer, there is no such thing as a legal headache. They actually call it a paycheck.
Isn't this in-line with other stores? (Score:3)
I know everyone loves to hate on Apple, but this is an industry wide thing.
Apple App Store: 30 percent standard commission on in-app purchases of digital goods (15% for "small businesses/indie developers" with less than 1 million in sales); sales of physical products are exempt. Subscription commission falls to 15 percent after one year.
Google Play: 30 percent standard commission on in-app purchases of digital goods (15% on the first 1 million in sales then rate goes up); sales of physical products are exempt. Subscription commission falls to 15 percent after one year.
Galaxy Store: 30 percent standard commission on in-app purchases, but it is reportedly negotiable.
Amazon App Store: 30 percent standard commission on in-app purchases, 20% on streaming video services
Microsoft Store: 30 percent standard commission on all games, in-game purchases, purchases from business and education stores, or purchases on Windows devices; 15 percent on everything else.
Steam: Steam takes 30 percent of all sales made for the first $10 million sold. That cut becomes 25 percent when a developer sells between $10 million and $50 million. For every sale after the first $50 million, Steam only takes a 20 percent cut.
Epic: Epic takes 12 percent of the revenue from all games sold, giving developers 88 percent. Epic CEO Tim Sweeney tweeted that of the 12 percent Epic collects, the company nets about 5 percent as profit.
PlayStation: Sony is reported to take a 30 percent cut from games sold in the PlayStation Store, though the split isn’t publicly disclosed.
Xbox: Microsoft takes a 30 percent cut from all games and in-game purchases sold through the console’s store under its standard developer agreement.
Nintendo: Nintendo takes a 30 percent cut from all games and in-game purchases sold through the console’s store under its standard developer agreement.
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no no noooo dont say that!! we only support "APPLE BAD" around here.
Re: Isn't this in-line with other stores? (Score:2)
EU/UK vs American Tech Companies (Score:2)
It seems that the EU/UK just spins their wheel of big American Tech Companies and "finds" something to sue/fine them over every six months or so. They get a payment and business as usual continues.