Tech giant Apple is facing a billion-pound legal claim over allegations it broke UK competition laws by limiting the ways in which customers can pay at the App store checkout.
The company has been accused of overcharging 19million people – in a move that could result in payouts for iPhone, iPad and Apple customers in Britain.
Claimants argue the company deliberately blocked competition from rival payment companies, in turn forcing people to use its own payment processing system, generating “excessive” profits for itself in the process.
The claim, which is being brought on behalf of potentially millions of Apple users in the UK, has been filed in the competition appeal tribunal.
It calls for Apple to repay UK customers. It argues have been overcharged because of the company’s practices, with damages of up to £1.5billion being sought.
It says as many as 19.6million UK users could be eligible for compensation.
The claim argues that Apple‘s policy of forcing developers to use its payment systems for in-app purchases and taking up to 30% commission on those transactions is unfair.
Apple is the subject of a court case in the US brought by the Fortnite maker Epic Games, which has accused the iPhone maker of using the App Store and the 15% to 30% commission it takes on in-app purchases as a way of stifling competition.
The UK collective action has been brought by Dr Rachael Kent, a lecturer at King’s College, London, who claims that because the App Store is the only way to get apps on to an iPhone or iPad, it is acting like a monopoly.
“The App Store was a brilliant gateway for a range of interesting and innovative services that millions of us find useful, myself included,” she said. “But 13 years after its launch, it has become the only gateway for millions of consumers.
“Apple guards access to the world of apps jealously, and charges entry and usage fees that are completely unjustified.
“This is the behaviour of a monopolist and is unacceptable.”
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The claim says any UK user of an iPhone or iPad who purchased paid apps, paid subscriptions or made any other in-app purchases within the UK version of the App Store since 1 October 2015 could be entitled to compensation over the firm’s “anti-competitive practices”.
Apple has not yet commented on the new UK legal action.
Ernest Doku, mobiles expert at Uswitch.com, comments: “Consumers worldwide spent more than £78 billion on apps last year, with almost two thirds of that going to downloads from Apple’s App store.
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“If this legal action is successful, it could mean billions of pounds of damages being returned to UK iPhone users who have paid for apps since 2015.
“This lawsuit is still at a very early stage, but Apple points out that the 30% cut it takes from developers is similar to other app stores.
“If you’re an Apple user, you don’t have any choice about where you download your apps so it’s unlikely you will see any changes in the short term, and it could be a long time before this legal action is resolved.”