A competition law opt-out collective proceeding brought before the UK’s Competition Appeal Tribunal (CAT) concerning restrictions and charges imposed on app developers has succeeded in a UK first.
The CAT held that Apple, in relation to its App Store and Apple payment systems, engaged in certain exclusionary practices when dealing with app developers and was also responsible for imposing excessive and unfair charges on app developers, leading to users of Apple devices paying more than they should have to access some apps. This conduct, the CAT said, constituted abuses of a dominant market position, in breach of UK competition law.
It is the first fully litigated competition law collective proceeding in the CAT to have been successful. However, Apple has said it disagrees with the decision and will appeal.
The claim against Apple centred on restrictions that required iOS apps to be distributed exclusively through the App Store and mandated that both app purchases and in-app transactions use Apple’s payment systems, as well as the rate of commission it imposed on purchases of paid apps from its App Store and on all in-app purchases made using its payment system. The collective action was raised by King’s College London lecturer Rachel Kent on behalf of millions of UK Apple users. In 2022, the CAT granted Kent a collective proceeding order (CPO), enabling her to pursue the claims at trial. The trial hearings took place in January and February this year.
In its judgment, the CAT agreed with Kent’s arguments on how the relevant market should be defined and on infringement, ruling in favour of the mass claim.
Apple argued it had defences against the competition claims it faced. This included its assertions that they enabled efficiency gains and were “objectively necessary” for achieving legitimate objectives, and were proportionate in that regard. Those objectives included securing increased privacy, safety and security for Apple device users. However, the CAT said the defences Apple raised did not justify what it considered competition-restricting practices in this case.
"This ruling overlooks how the App Store helps developers succeed and gives consumers a safe, trusted place to discover apps and securely make payments," an Apple spokesperson said.
The CAT decision coincides with a root-and-branch review of the UK’s competition law collective proceedings regime, which is now 10 years old. The ruling also follows earlier antitrust investigations by the UK’s Competition and Markets Authority (CMA) and the European Commission, and contains analysis of issues relevant to relatively nascent legislative regimes in force in both the UK and EU – the UK’s Digital Markets, Competition and Consumers Act (DMCCA), which came into force at the start of this year, and the EU Digital Markets Act, which took effect in 2023.
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