Tech and Telecom

Apple Faces Yet Another Billion Dollar Lawsuit Over ‘Apple Tax’ in UK

Apple’s attempt to dismiss a nearly $1 billion lawsuit brought by 1,500 UK-based developers was unsuccessful, as a UK court ruled today that the trial can proceed, likely next year.

The lawsuit claims Apple imposed unfairly high commission fees, up to 30%, on app and content purchases, which is also known as “Apple tax.” The developers argue that Apple is exploiting its dominant market position in app distribution on iPhones and other Apple devices, seeking damages as a result.

In a January hearing, Apple’s attorney contended that UK developers could not file a claim unless the charges were incurred through the UK App Store. However, the judge refuted this, stating that:

Apple’s overcharging of commission to app developers based in the UK in relation to commerce transacted on non-UK storefronts did amount to conduct implemented in the UK.

This isn’t the first instance of Apple facing such allegations. In the European Union, the company is now required to permit alternative app stores and allow developers to process payments outside of the App Store. This has forced the Cupertino giant to allow developers on the App Store to introduce their own payment methods outside of the store that circumvent the hefty Apple tax.

However, Apple is still taking a cut from its developers in the form of commission that amounts to  12 to 27%, which is only a tiny reduction compared to the original 15-30% format. Additionally, multiple tech giants including Microsoft, Meta, and X have criticized Apple saying that it does not allow developers to include “even the most basic information” to let its customers know about alternative payment methods. These developers cannot properly tell customers that there are cheaper payment methods available on their websites.

Published by
Aasil Ahmed