Apple dominates market with ‘total shutout’ of rivals, UK court hears | Apple

Apple is accused of dominating the tech market by “totally shutting out” rivals as it faces charges of overcharging UK App Store customers, a court has heard.

The suit alleges that the tech company is abusing its dominant position in the app market and that its 30% commission is a violation of European and UK competition laws.

The claim was brought against the company by Dr Rachel Kent, an academic at King’s College London, on behalf of herself and approximately 19.6 million other iPhone and iPad users in the UK. This is the first of many cases against big tech companies scheduled to go to the Competition Appeal Tribunal over the next few months.

In his opening statement, Mark Hoskins K.S. stated on behalf of the plaintiffs that there was no dispute as to the “fundamental facts in this case” and that by all definitions Apple was the dominant entity in the technology market. They argued that the company was using its dominance to “prevent competitors from entering the competitive market,” which they called a “total shutdown.”

Kent claims the App Store generated $15bn (£12bn) in revenue last year while spending £100m on operating costs, and that users are overpaying because they have no other choice.

She said: “The App Store has been a great gateway to a range of exciting and innovative services that millions of us find useful, including me. But 13 years after its launch, it has become the only gateway for millions of consumers. Apple jealously guards access to the app world and charges completely unreasonable fees for entry and use.

“This is the behavior of a monopolist and it is unacceptable. The use of apps by everyday people is constantly growing, and the last year in particular has increased our dependence on this technology. Apple has no right to charge us 30% rent for most of what we pay for on our phones – especially when Apple itself is blocking us from platforms and developers that could offer us much better deals. That’s why I’m taking this action.”

In a statement released before the trial, Apple dismissed the lawsuit, saying the allegations were “baseless” and that the company had not broken any laws.

“We believe this claim is without merit and welcome the opportunity to debate in court our unwavering commitment to consumers and the many benefits that the App Store and Apple’s valuable technology have brought to the UK’s innovation economy.

“The fees charged by the App Store are largely similar to the fees charged by all other digital marketplaces. In fact, 85% of apps on the App Store are free and developers pay nothing to Apple. And the vast majority of developers who pay Apple a commission for selling a digital product or service are entitled to a 15% commission.”

During opening arguments, the plaintiffs said Apple argued that it is impossible to measure the profitability of the App Store because the store cannot be separated from the rest of the “Apple ecosystem.”

The court will hear the rest of the plaintiffs’ opening statements tomorrow morning, with Apple set to make its own opening statements later in the afternoon. The trial is expected to last seven weeks.

The trial continues.