Report from Guardian
In Brief – Apple has appealed the 2025 decision of the UK’s Competition Appeal Tribunal (CAT) that the iPhone giant violated competition law by imposing excessive App Store commissions on developers, leading to overcharges being passed on to consumers. The CAT decision requires Apple to pay damages to about 20 million UK iPhone and iPad users that could total £1.5 billion. The competition tribunal ruled that Apple abused its market power and that its 30% commission on in-app purchases was unfair. The panel determined that Apple should have charged commissions of 17.5% on app sales 10% on in-app purchases, with half the overcharges being passed to consumers. The company said it strongly disagrees with the original ruling over the App Store fees and that the tribunal took a flawed view of the “thriving and competitive app economy” where Apple faces “vigorous competition”. If the appeal fails, anyone in the UK who made App Store purchases between 2015 and 2024 could be eligible for compensation.
Context – Epic Games spearheaded a global app developer legal campaign to force Apple and Google to drastically lower commissions on in-app purchases. Apple largely won the first legal battle US court in 2021. It’s “walled garden” model that appealed to customers on security, privacy, and user experience came out on the right side of federal antitrust law. But things have gone downhill for the two mobile ecosystem giants since. Google lost to Epic in US court despite a much more open regime. And while Epic’s federal antirust complaints against Apple failed, they prevailed on a complaint involving California’s Unfair Competition Law and won an order allowing app developers to appeal to users to circumvent Apple’s fees. Apple, Epic and that federal judge are continuing legal proceedings to determine the right fee levels, with a federal appeals court ruling that zero fees are too little. The iPhone giant is facing similar rulings to open their walled garden and lower fees in the EU, Japan, South Korea and Australia, as is Google. Competition between Apple and Android has proven nearly meaningless.